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How to calculate your break-even point

Key points in this article

  • Your required annual return
  • The available time you have to work

It’s important to know what your break-even point will be when you start up a business. This is where your costs equal your income so you neither make a profit or a loss.

Results

The results box will automatically be generated after you’ve inputted everything. It will tell you the:

  • number of units you have to sell to reach your target
  • total sales needed
  • number of sales per week to achieve this.

Sales

In the sales section, input the price of each unit you’ll sell. Also enter the cost per unit for labour and raw materials. The template will calculate the:

  • total cost per unit
  • gross margin per unit.

Available time

Input the number of weeks you can work during the year – this may be 52 weeks or you may want to allow for a few weeks holiday.

Next steps

How many weeks do you intend to work during the year? Use our break-even calculator to find out how much you need to sell to achieve your target financial return.

You can also find out your estimated overheads for the upcoming year. The template will automatically calculate the gross margin required.

Download template

 

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ANZ tools, templates and checklists are only some of many ways to analyse a business or industry to assist your planning and business decision making. You should seek the assistance of your business advisor or accountant when either planning for or analysing your business' performance. To the extent permitted by law, ANZ makes no warranty and has no liability, in respect of your use of and reliance on these tools.