Plan: How to Find Your Break-Even Point
Okay, this’ll take about an hour, but it’s an hour well-spent. It’ll give you numbers so you’ll know exactly what you need to do to be successful.
Find Your Break-Even Point
- Get a whiteboard, planner, notebook, or calendar – something you can see and touch.
- Make a list of all the supplies, equipment, software, ect. you need to start your business.
- Find the lowest prices for everything you need on Craigslist, Ebay, or Half.com.
- Look for student discounts (e.g. Adobe gives 80% off to students) if you’re a student.
- Total up your start-up costs and double it.
- Establish your pricing based on your costs, your competition and what you think customers will pay.
- Subtract your cost per product/service rendered from your price (to determine your profit).
- Divide your start-up costs by your profit per product/service rendered to find out how many customers you need to break-even and become a successful business!
A business becomes “successful” as soon as it becomes profitable. Services become profitable much quicker than products. You have the highest chance of being successful if you start with a service.