How do you calculate break even for your business ?

In every business there is a certain level of sales at which costs equal profits. This is know as break-even

The formula: Don’t worry, it’s fairly simple. To conduct your breakeven analysis, take your fixed costs, divided by your price, minus your variable costs. As an equation, this is defined as:

Breakeven Point = Fixed Costs/(Unit Selling Price – Variable Costs)

This calculation will let you know how many units of a product you’ll need to sell to break even. Once you’ve reached that point, you’ve recovered all costs associated with producing your product (both variable and fixed).

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