Uncommon Fruit

Running a small business is not for the faint-hearted. It requires a lot of stamina, determination, and knowledge. One of the vital skills you need is to know how to perform a break even analysis. Not sure how to perform one? Don't worry; we'll take you through the process step-by-step. What Does Break Even Point Mean? This is the point in your business where your costs and revenue are equal. When you discover what that figure is, it's time to evaluate all elements of your business. This includes the cost of labor and materials and possibly rent, if you don't own your own building. This is also a good time to examine your pricing structure to determine if your prices are too low. If your prices are too low or your costs too high to reach a break-even point in a reasonable amount of time, then your business is in danger of being unsustainable. The Formula for the Break Even Analysis There is no one formula for this—in fact, there are a few ba