Break-Even Point

The break-even point is the time at which your business revenue will equal total expenses -- the point at which there is neither a profit nor loss. A breakeven analysis is used to determine when your business will be able to cover all your expenses. To calculate your break-even point, forecast your expected fixed costs (usually include overhead expenses like rent or payroll) and variable costs (expenses that can shift like inventory or shipping), and compare to your expected total revenue over time.