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Article | 2-minute read

Calculating your business’ break-even point

Business planning

Given changing business scenarios and market conditions, it’s important to know your businesses’ break-even point to help you decide pricing strategies, set budgets and readjust your business plan. This will help you make sure that the business moves forward with a clear understanding of incomings and outgoings.

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. You may want to allow for a few weeks holiday.

 

Next steps

 

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How to forecast profit and loss

Different events can change your idea of how much money your business will make over the next year. Likewise, your view of the business expenses you will incur during the coming 12 months may have varied. Use our profit and loss template to help forecast for the year ahead.

Keep reading

 

 

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