You need to know your break-even point to get on the road to profitability.  The information needed to produce your break-even are your fixed costs and your variable costs and the selling price of your product.

  • Fixed Costs are rent, salaries, utilities or any expense that you pay even if you have no sales.
  • Variable Costs are those cost directly related to each sales like commissions, materials, labor to create your product or service.

The break-even point of any business is the point where all income covers both the variable and fixed costs.  From that point forward, a portion of each sale is profit.

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