bottom line
The services you provide or products you sell are important, but the right pricing and financial management is what makes your business profitable. It’s crucial that you know the amount it takes to break even financially to keep your business going, then beyond that point is where you start making a profit.
Break-even analysis is arguably one of the most critical functions for any business. Your break-even point is the place where you’re not making any profit, but you’re also not incurring any losses; it’s where you’re covering your expenditures but hitting zero-profit.
Your break-even point will provide you with a target that tells you how much cash you need to cover costs. As such, break-even analysis is an essential calculation in the profitability of your business. Without it, you’re shooting blind, never really knowing what your critical financial targets are. With it, however, you have comprehensive goals that can help you determine what needs to change in terms of pricing and financial strategies.
Here, GrowthForce president and CEO Stephen King gives you his take. You can read his piece HERE.