Breakeven analysis

To
To be
be profitable
profitable in
in business,
business, itit is
is important
important to
to know
know what
what your
your breakeven
breakeven point
point is.
is. This
This What to do
is
is the
the point atat which
which total
total revenue
revenue equals
equals total
total costs
costs or
or expenses;
expenses; there
there is
is no
no profit
profit or
or
loss
loss -- in
in other
other words,
words, you
you 'break
'break even'.
even'. 1.
1. Open
Open the
the 'Breakeven
'Breakeven
analysis' spreadsheet.
analysis' spreadsheet
By
By understanding
understanding where
where your
your breakeven
breakeven point
point is,
is, you
you are
are able
able to
to work
work out:
out:
2.
2. Enter
Enter the
the sales
sales price
price per
per
• the
the profitability
profitability of
of your
your product
product line(s)
line(s) product
product and
and the
the unit
unit selling
selling
• how
how far
far sales
sales can
can decline
decline before
before you
you start
start to
to make
make aa loss
loss price
price per
per product/servic.
product/servic.
• what
what sales
sales volume is is required
required toto make
make aa profit
profit
• what
what effect
effect reducing price or volume of sales will have on your profits 3.
3. Enter
Enter fixed
fixed costs
costs and
and note
note
down
down the
the results.
results.

Developed by the Small Business Development Corporation smallbusiness.wa.gov.au

even
even
et.
eet

price
price per
per
tt selling
selling
rvic.
ervic.

s and note
 Breakeven analysis
Profit margin

What is the average price of each unit you sell? $0.00

What is the cost of producing each unit? $0.00

Gross profit margin #DIV/0!

Sales

What are your fixed costs $0.00 per week/month or year

Dollar amount you need to breakeven #DIV/0!

Number of units you need to sell to breakeven #DIV/0!

Developed by the Small Business Development Corporation smallbusiness.wa.gov.au

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