Knowing Your Break Even

The Importance of Knowing Your Break Even

by Hannibal Chinchilla, Principal, Barca Financial Group, Barca Enterprises and AZ Web Programmers

If you are a business owner during this recession; knowing what your Break Even is paramount. Knowing how many sales per day, week, month you ought to make each month. Knowing your fix costs, your variable costs, you need to know these figures in order to cover your expenses. These figures will help you create goals and objectives on a daily basis; to be able to gauge performance, identify troublesome areas and correct them before those bills start piling up. I see a lot of businesses closing their doors lately; I wonder how many of them knew their exact break even before calling it quits. It is clear that knowing and mastering this simple business fact is so unimportant to many. Owners are always too busy to figure things out, if they do not know how, they do not seek advice or help.

Advice: know your bottom line, your break even so you can have a base line of your business position; then you can move forward to master your Profit Margin