How to calculate your break-even point
It’s important to know what your break-even point will be when you start up a business. This is where your costs equal your income so you neither make a profit or a loss.
Read on for what to consider, and then download our template to simplify your calculations.Download template
Enter your desired financial return and your estimated overheads for the upcoming year. The template will automatically calculate the gross margin required.
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, the total sales needed and the number of sales per week to achieve this.
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 and the gross margin per unit
Input the number of weeks you can work during the year - this may be 52 weeks or you may want to allow for a few weeks holiday.