If you want to stay afloat in your business, understand break even and how it can help. Every industry needs this key number for different reasons but regardless of what kind of company or size you are you should have a grasp on these fundamentals!
Understanding and using break even and applying is neglected by many business owners. That’s a shame, it’s powerful and in helping you make profit, and better business decisions
In this week’s podcast I will
Firstly, explain what break-even is
Secondly, why it’s so powerful, not only for your bank balance, but also for your mental well being.
So, what is break-even? In very simple terms, it’s the point at which your total income equals your total costs. Once you hit this magical number, you no longer make a loss on every sale and start making profit! It’s an important marker to know for any business owner. It tells you when you reach profitability and how much money you need to bring in before you start making a profit.
Break-even analysis can also help with forecasting future sales and budgeting.
If that wasn’t reason enough to love it, break-even is like your personal financial advisor giving you the thumbs up or down on whether a new project or product is worth pursuing. You don’t have to be a maths genius to use it – I have a free online calculator that does all the hard work for you. Why not try out break even today and see how empowering it can be for your business decisions?
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