Do You Know Your Monthly Break-Even Point?
Knowing your break-even point isn’t just smart — it’s essential.
If you don’t know how much revenue you need to simply cover your costs, you’re operating in the dark. And that’s a dangerous place for your business to live.
Let’s shed some light.
What Is a Break-Even Point?
Your break-even point is the minimum amount of revenue you need each month to cover all your fixed and variable expenses — without a profit or loss.
Hit it = you survive.
Exceed it = you thrive.
Fall short = time to pivot.
Why It Matters
➡️ Cash Flow Clarity
Knowing your break-even gives you a clear monthly revenue target.
➡️ Informed Pricing
If your services are underpriced, your break-even point will show you.
➡️ Smarter Decision-Making
Plan staffing, marketing, or expansion based on real numbers — not gut feelings.
➡️ Goal Setting with Confidence
Revenue goals are no longer random; they’re grounded in facts.
How to Calculate It
Here’s a simple formula:
Break-Even Point = Fixed Costs / (1 - Variable Cost %)
For example:
If your monthly fixed costs are $5,000 and your variable costs are 30% of sales, your break-even is:
$5,000 / (1 - 0.30) = $7,143
You need to earn at least $7,143 per month to break even.
Use QuickBooks to Track It
QuickBooks can help you:
Identify fixed vs. variable expenses
Track income trends
Run Profit & Loss reports to measure performance against your break-even
Want help setting this up? That’s what DBR is here for.
FAQ
Q: What’s included in fixed costs?
A: Rent, salaries, software, insurance — anything that stays the same month to month.
Q: How often should I review my break-even point?
A: Quarterly, or anytime your expenses change significantly.
Q: Can I use this to set sales goals?
A: Yes! Break-even is the baseline, and everything above it fuels growth and profit.
Let’s keep Doing Business Right!
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