Figuring out break-even

[bfor]

I found a formula for calculating break-even that uses units of product as the break even point. It is uses fixed cost and variable costs less unit price. Is there an easier way?

[tj]

You might want to give this one a try. It requires you to know your profit margins really well. The profit margin, (gross profit / revenue) is the contribution value or CV part of the formula. Take your fixed cost and divide it by the CV or margin. For example, if your monthly fixed cost is 12,000 and the CV is 40%, the break even is 12000 / .4 = 30,000. You need to make 30,000 that month to break even. If you know what your average sale is, you can figure out roughly how many customers you need to break even. This works with your average days sales also to determine how many days it will take to break even. This seems to work pretty good for me. For smaller businesses that are service only with no products or gross margins to figure out, the break even is simply the fixed cost each month.