Break-even and minimum sales template for small businesses

This downloadable worksheet outlines how to calculate your break-even and minimum sales
points. These calculations are essential for business owners to understand as both indicators
influence your prices, number of sales, your budget and your business operations.

This worksheet provides examples and calculations to work out your break-even point and the
minimum sales your business needs to make to cover expenses and make a profit.

Contents

Break-even analysis
Minimum sales

Instructions

Stay in control of your business finances. Use our financial statements templates to know your:

- break-even point in dollars and units

- minimum sales requirement to cover your fixed costs plus your profit goal.

Using this document:

* Refer to the instructions in each template to help you complete each one.
* Modify the spreadsheet according to your requirements.
* Add extra rows for new items in each financial statement as required.
* Print workbook in A3 for ease of reading.

Colour code

Contents
Break-even analysis
Break-even analysis chart
Minimum sales

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all businesses

plates to know your:

plete each one.

s required.
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for the information or advice which is provided herein.

hange of its information. The copyright in this publication is

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Break-even analysis

Your break-even is the point where total revenue made (sales or turnover) equals total costs.
At this point there is no profit or loss — you 'break even'.

Understanding your break-even point allows you to work out:

* how profitable your product or service is
* how far sales can decline before you start to make a loss
* how many units you need to sell before you make a profit
* how reducing price or volume of sales will impact your profit
* how much of an increase in price or volume of sales you will need to make up for an
increase in fixed costs.
Instructions
Use this worksheet to calculate your break-even point
1. Add in your figures for sales, variable costs (per unit) and fixed costs - use the grey cells.
2. Auto-calculated cells (result cells) are highlighted in blue. Your figures will also automatically generate the:
* unit contribution margin and variable costs per unit charts
* break-even results (in dollars and units)
* sales volume analysis table.
3. Use the chart provided in the break-even analysis chart worksheet to analyse your figures.

Sales
Sales price per unit $15.00
Sales volume per period (units) 22,000 Unit contribution margin
Total sales $330,000.00

Variable costs
Commission per unit $2.00
Direct material per unit $2.50
Shipping per unit $1.10 $7.40 $7.60 Variable costs per unit
49% 51%
Supplies per unit $0.80 Unit contribution margin

Other variable costs per unit $1.20

Variable costs per unit $7.60
Total variable costs $167,200.00

Unit contribution margin $7.40

Gross margin ($) $162,800.00
Gross margin (%) 49.33%

Fixed costs per period

Administrative costs $12,000.00
Insurance and accounting $5,000.00 Variable costs per unit
Utilities $3,000.00
Rent $12,000.00 $1.20
$2.00
Other fixed costs $5,000.00 $0.80 16%
26%
Commission per unit
11%
Total fixed costs per period $37,000.00 Direct material per unit
Shipping per unit
$1.10 Supplies per unit
Net profit (loss) $125,800.00 14%
$2.50 Other variable costs per unit
33%

Results:
Break-even point ($): $75,000.00

Break-even point (units): 5,000

Sales volume analysis:
Sales volume per period (units) 0 2,200 4,400 6,600 8,800 11,000 13,200 15,400 17,600 19,800 22,000
Sales price per unit $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00
Fixed costs $37,000.00 $37,000.00 $37,000.00 $37,000.00 $37,000.00 $37,000.00 $37,000.00 $37,000.00 $37,000.00 $37,000.00 $37,000.00
Variable costs $0.00 $16,720.00 $33,440.00 $50,160.00 $66,880.00 $83,600.00 $100,320.00 $117,040.00 $133,760.00 $150,480.00 $167,200.00
Total costs $37,000.00 $53,720.00 $70,440.00 $87,160.00 $103,880.00 $120,600.00 $137,320.00 $154,040.00 $170,760.00 $187,480.00 $204,200.00
Total sales $0.00 $33,000.00 $66,000.00 $99,000.00 $132,000.00 $165,000.00 $198,000.00 $231,000.00 $264,000.00 $297,000.00 $330,000.00
Net profit (loss) ($37,000.00) ($20,720.00) ($4,440.00) $11,840.00 $28,120.00 $44,400.00 $60,680.00 $76,960.00 $93,240.00 $109,520.00 $125,800.00
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Minimum sales requirement
Minimum sales requirement is the point where both your fixed costs and your profit goal are
covered by your gross profit.

To work out your minimum sales requirement, calculate how much of your product or service
you need to sell to cover fixed costs, your salary and desired profit.

Instructions
Use this worksheet to calculate your minimum sales.
1. Add your desired profit goal into the grey cell.
2. Your fixed costs are auto-populated from the break-even analysis worksheet.
3. Add your desired gross profit margin into the green cell.
4. Sales price is auto-populated from the break-even analysis worksheet.
5. Auto-calculated cells (result cells) are highlighted in blue.
6. Results for minimum sales in dollars and units is provided.

Profit goal
Profit goal $50,000.00

Fixed costs per period

Administrative costs $12,000.00
Insurance and accounting $5,000.00
Utilities $3,000.00
Rent $12,000.00
Other fixed costs $5,000.00
Total fixed costs per period

Gross profit margin

Gross profit margin (%) 50%

Sales
Sales price per unit $15.00

Results:
Minimum sales ($) $174,000.00

Minimum sales (units): 11,600

$37,000.00