Break-Even Sales: The Number Owners Avoid
Break-even is the minimum sales needed to cover your costs. It gives you a clear baseline for better decisions.
Who This Is For
- You feel busy but still unsure about cash.
- You do not know your minimum monthly sales target.
- You make spending decisions without a clear baseline.
What To Do This Month
- Review your fixed monthly costs.
- Estimate the gross margin earned from your sales.
- Use the break-even tool to calculate your minimum sales target.
FAQ
What if costs change monthly?
Use a consistent estimate and update it when major costs change.
Should owner pay be included?
Include a reasonable owner pay amount if the business must support it sustainably.
Why can cash still be tight above break-even?
Because customer collections and payment timing still affect the bank balance.
How often should I review it?
Review it during your monthly Money Day and whenever major costs or margins change.
What tool helps?
A simple break-even calculator using reliable accounting numbers.