Do you know what the breakeven position is in your business?
Jun 23, 2020
Do you know what the breakeven position is in your business? Do you even know what that is?
If you don’t know (and it’s totally ok if you don’t), breakeven is when your sales and costs are the same ie zero profit. This is taken after tax to ensure this doesn’t get forgotten.
Start with working out your fixed costs. These are the items that, if you didn’t have any income, would still exist. This might be your website, insurance, accounting costs, employees, office space costs, tech (G suite, zoom etc) or manufacturing costs. Also, anything that you are paying on a payment plan to ease the payments. Anything that you can’t just turn off if your business stopped for a period.
Then look at the variable costs. This could include paying yourself although I think you should be aiming for a minimum fixed cost each month to pay yourself. So put in how much you need to live in this...
