How to calculate your break-even point
Key points in this article
- Your required annual return
- The available time you have to work
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.
Enter your desired financial return and your estimated overheads for the upcoming year. The template will automatically calculate the gross margin required.Download template
What’s your ideal financial return for the upcoming year?
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
- total sales needed
- 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
- 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.