Find out exactly how many units you need to sell, or how much revenue you need to earn, before your business starts making a profit.
Your break-even point is the volume at which your revenue exactly covers your costs, no profit, no loss. Every unit you sell above it produces pure contribution margin. If the break-even number looks impossibly high for your market, your fixed costs are too high, your price is too low, your variable costs are too high, or all three. Fix that before launching, not after.
Calculate break-even before you sign any lease, take any loan, or hire anyone. Then re-calculate it after every major change. It is the single most important number in your business.
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