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Before you open a new branch, take on a product line or raise rent, know how much you must sell just to cover costs. Every sale after that is profit.
Break-even units = fixed costs / (price per unit - variable cost per unit). Break-even sales = break-even units x price. Fixed costs stay the same whatever you sell, such as rent and salaries; variable cost is what each unit costs you.
Example: fixed costs of 5,000 a month, a price of 25 and a cost of 15 per unit. Each unit contributes 10, so you need 5,000 / 10 = 500 units, or 12,500 in sales, to break even.
Run the numbers before you:
Up Stock shows profit day by day from the real cost of the stock you sold, so you know when the month has covered its costs.
Costs you pay whether you sell or not: rent, salaries, loan payments, insurance and subscriptions.
Use your average price and average cost per unit, or work out the break-even in sales using your average margin.
Because your price is not above your variable cost, so each sale loses money or makes nothing. Raise the price or lower the cost first.
It lowers what each unit contributes, so you need more units. The discount calculator shows exactly how many more.
Sale price, margin left and sales needed to keep profit
Cost, price, markup and margin from any two
What holding stock costs you each year and month