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BUSINESS TIPS -Know your break even point

27.09.2018 by Caitlin Purkis

Find out why it is important of know what your break even point is in your business?

Your breakeven is the point when your revenue equals total costs. At this point there is no profit or loss in your business.

As a business owner, it can be hard to juggle the many different roles you have to play and monitoring the profit of your business can be put on the back burner.

When you understand your break even point you can determine:

  • How profitable a product or service line is
  • How far sales can decline before you start to incur a loss
  • How many units you need to sell before you make a profit.

The process of determining the break even point is a good time for businesses to assess their true costs of doing business and their sale prices.

If the amount of sales your business needs to break even is more than what you can realistically achieve in a year, then you know that your products or services might not be priced well. Or this is an indication that you need to reduce other running costs.

If you haven’t calculated your breakeven point and need help. Give us a call 07 49725177. We’ll set up an appointment and work this exercise together.

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Topics Business Improvement

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