Do you know your break -even point?

The break-even point is an important stat for a business, in simple terms, it’s the point where revenue and total costs are the same. This can be measured daily, weekly, monthly or over whatever period suits your business, but whatever time-period you use, this number is the minimum amount your business needs to make for that time period so as not to make a loss. On the flip side, anything above the break-even point is profit.

Knowing this figure allows you to look at your business and analyse your costs and selling prices and see if there are ways to increase your profits or pull yourself out of a loss making period.
For new businesses it will allow you to predict when you’ll start making a profit once you’ve covered all your startup costs.

For most businesses you’ll want to dive deeper than this, for example you can work out the amount of products you need to sell to break even, or what margin you’ll need to sell at to break even but this varies for every business so we won’t go into too much detail on here.