Comments on: Break-even Analysis

By: Bill

Bill — Tue, 03 Jan 2012 13:33:45 +0000

I run a internet startup and was thrilled to hear the analogy of burn rate. I’m not trying to convert everything to a post internet term and create a new age bplan

Your explanations are very helpful

By: The Down and Dirty Business Plan | Personal Concierge Info

The Down and Dirty Business Plan | Personal Concierge Info — Thu, 21 Jul 2011 18:33:25 +0000

[...] in a month to break even and how many hours that is equivalent to. Learn more with Bplans’ Break-Even Analysis or here is a free [...]

By: Luke

Luke — Wed, 27 Oct 2010 19:08:17 +0000

If I receive a loan to purchase inventory, how do I factor the loan figure into my variable per unit cost? If I express my per unit cost as a variable cost and my principle loan amount as a fixed cost, am I not purchasing my inventory twice? Once with the variable expense and one with the fixed expense? So confused

————————————–
The main point to keep in mind here is that the details of your loan should be kept separate from the inventory that you’ll be purchasing with that money.

If you’ve chosen the option to manage inventory in your plan, Business Plan Pro will use the Cost of Sales information from your Sales Forecast to automatically estimate Inventory Purchases based on a few other assumptions that the program will ask you about. Those Inventory Purchases are automatically added to the Accounts Payable in your plan and flow through into the Cash Flow as part of the Bill Payments as they should be.

The loan amount should be entered into the appropriate tables (Start-up Funding or Cash Flow depending on timing) and the Principal Payments for that loan should be entered into the Cash Flow table. Business Plan Pro will automatically calculate the Interest Expense on the loan and place that value at the bottom of the Profit & Loss statement for you.

For additional information, please review:
• Cost of Sales
• Inventory Detail
• FAQ: Handling of Loans, Interest and Repayment

Sean Serrels
Product Trainer/Evangelist
Palo Alto Software

By: Natalia

Natalia — Sun, 29 Aug 2010 21:10:43 +0000

Hi, Please help, how do I count a gross profit for each sale if it’s a day care center. THe wages and rent and utilities are included inthe fixed costs, does it mean I would have to show a 100% gross profit for each child? If not then I would have different number of kids and as a result I would need different number of employees, do I have to make a brake even for each number of kids or count the muximum I can have?
Thank you

By: Chelle Parmele

Chelle Parmele — Mon, 17 May 2010 23:35:00 +0000

Mo,

Have you tried using our Break-Even Calculator? http://www.bplans.com/business_calculators/break_even_analysis.cfm

That might be super useful in determining your break even for your company.

By: Mo

Mo — Mon, 17 May 2010 10:32:09 +0000

How do you calculate the break even point for a service company?

By: Pankaj Trivedi

Pankaj Trivedi — Wed, 14 Apr 2010 12:30:01 +0000

Doris, you have simplified it nicely.

-Pankaj

By: Hamida

Hamida — Fri, 12 Feb 2010 12:40:29 +0000

please i want to know why you don’t construct your total cost line when you are drawing the break even chart.

By: doris

doris — Sat, 28 Nov 2009 20:52:56 +0000

rham,
The basic formula for the break even analysis is as follow:

P(x)=A+B(X)
where P is the Per unit sales price (per unit revenue)
A is the Fixed cost and B is the Variable cost per unit.
If you basic algebra…you shoul be all set solving the equation…Good luck!

By: jookem

jookem — Sat, 12 Sep 2009 05:12:34 +0000

well gary, you would take into account the salaries(expenses) paid employees doing the services, and what you charge the clients (profit) for them.