Your breakeven point tells you how many units you need to sell or what dollar value in sales you need to achieve to cover your costs. Once you know that, you know the point where you turn a profit.

But a breakeven point isn’t set in stone. It can become something you keep in play over time as a tool for you to think about your sales, costs and pricing in a different way.

Say you know your breakeven point and you take it at face value. Tell your team. It’s a powerful motivator for your sales people to know exactly what the numbers are to put the business in profit.

Say you don’t accept your breakeven point at face value. What can you do? Can you reduce costs to lower your breakeven point to start earning profit sooner? Look at your fixed and variable costs to judge whether you have room to move.

How does your breakeven point reflect on your pricing? Lifting your pricing might mean your numbers are into profit sooner but you might have to think about whether your market will tolerate that. Can you find a way to lift your sales volume? Look at marketing strategies, market reach and coach your team on what the sales goals really are.

If you’re not sure you really have a handle on analysing your breakeven point, we’re happy to talk through the angles which could increase your profit.