- You know how many units of a product needs to be sold to break even. In this way you know how to set sales targets for your sales team;
- You will always try to find ways to increase your business productivity to decrease the business total cost;
- You will know how many more units you need to sell if your business overheads increase;
- You will try to lower your business direct costs (buying cheaper and finding alternative suppliers);
- You can calculate if your business will need extra working capital to hold any temporary losses;
- It will help you to make smarter business decisions;
- You will also calculate for each different product or services how much will be each individual marginal contribution (price – total cost of sales)
Now, follow my case study above and calculate your business break-even point. If you have any questions, please send me an email [email protected]
