![]() how far sales can decline before you start to make a loss.Identifying your break-even point will help you to work out: ![]() Your business could turn over a lot of money, but still operate at a loss. Knowing your break-even point can help you make a decision about your selling prices, set a sales budget and prepare your business plan. At this point there is no profit or loss-in other words, you 'break even'. ![]() This is the point where your total revenue (sales or turnover) equals total costs. You need to know what your break-even point is to build a profitable business. Find out about pricing products and services. The sales price of your goods or services is a key factor in calculating your turnover. Any income leftover will be your profit and contribute towards your profit goal. Income from sales will go into covering your variable costs (materials and direct labour) and fixed costs (overheads). ![]()
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