Use this break-even analysis template to calculate the number of sales needed to become profitable. Thus, Enter the product’s selling price at the top of the template, and then add the fixed and variable costs. Once you enter those values, the built-in formulas will calculate the total variable cost, the contribution margin, and break-even units and sales values.
Break Even Analysis Excel Template
It is a financial calculation that weighs the costs of a new business, service or product against the unit sell price to determine the point at which you will break even. In other words, it reveals the point at which you will have sold enough units to cover all of your costs
KEY TAKEAWAYS:
- Firstly, It tells you how many units of a product must be sold to cover the fixed and variable costs of production.
- Secondly, The break-even point is consider a measure of the margin of safety.
- Thirdly, Break-even analysis is used broadly, from stock and options trading to corporate budgeting for various projects.
Break Even Analysis Formula
Moreover, When conducting a break even analysis, your projections are only going to be accurate if you’re taking all of your costs into account.
You don’t need to only consider direct product manufacturing costs, which is a common mistake some businesses make. You also want to consider any of the following that are applicable to you:
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The cost of warehouse storage
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Costs associated with distribution and shipping to customers
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Product packaging, including branded boxes, packing materials, price tags, and brand tags
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Ongoing business fees associated with licenses and permits
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Taxes
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Costs of needed to run your business, including a fee for your accountant, SaaS software, and the eCommerce solution you use
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Your salary, any team member’s salaries, and fees for third-party contractors
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Costs associated with marketing
Break Even Point Analysis
Staying on top of your business’s financial status is an essential part of immediate and long-term success. Your break even analysis can be a useful tool at all stages of your business. It includes before you even officially launch. Ensuring that your product contribution margins are high enough to yield a profit is crucial. The break even analysis can help with that.
