{"id":1404,"date":"2024-01-09T20:26:32","date_gmt":"2024-01-09T20:26:32","guid":{"rendered":"https:\/\/www.cloudcontroller4hire.com\/?p=1404"},"modified":"2024-01-24T18:13:34","modified_gmt":"2024-01-24T18:13:34","slug":"finding-your-breakeven-point-where-cash-flow-meets-profitability","status":"publish","type":"post","link":"https:\/\/www.cloudcontroller4hire.com\/finding-your-breakeven-point-where-cash-flow-meets-profitability\/","title":{"rendered":"Finding Your Breakeven Point: Where Cash Flow Meets  Profitability"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1404\" class=\"elementor elementor-1404\">\n\t\t\t\t\t\t<section data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-section elementor-top-section elementor-element elementor-element-2796d6e elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2796d6e\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-66 elementor-top-column elementor-element elementor-element-8111093\" data-id=\"8111093\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-702c7f0 elementor-widget elementor-widget-image\" data-id=\"702c7f0\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.20.0 - 26-03-2024 *\/\n.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=\".svg\"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}<\/style>\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/elementor\/thumbs\/quickbooks-brand-preferred-logo-50-50-black-external-qi2loqssq6r3okwhqit1w7qjkhigr6qghixfnheccc.png\" title=\"quickbooks-brand-preferred-logo-50-50-black-external\" alt=\"quickbooks-brand-preferred-logo-50-50-black-external\" loading=\"lazy\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3e2b9ee elementor-widget elementor-widget-text-editor\" data-id=\"3e2b9ee\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.20.0 - 26-03-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><strong>What\u2019s your business breakeven point?<\/strong><\/p><p>If you\u2019re like many business owners, the term breakeven<br \/>point might be a foreign concept. However, understanding the role of breakeven point in your<br \/>organization is critical to maximize your cash flow and profitability.<br \/>In this article, we\u2019ll cover everything you need to know about breakeven point, including what it<br \/>is, how you calculate it, and ways to improve your metric.<br \/><strong>What is Breakeven Point?<\/strong><br \/>Breakeven point is the point at which your costs equal your revenue, generating a net zero profit.<br \/>This calculation is commonly used for businesses selling goods, but it can be applied to other<br \/>areas, such as investments. A majority of the breakeven point calculation relies on knowing your<br \/>costs. If you aren\u2019t already leveraging accounting software, like <a href=\"https:\/\/quickbooks.intuit.com\/ca\/\">QuickBooks Online<\/a>, now is the<br \/>time to start.<br \/>Breakeven point is an important calculation to determine how many units your business needs to<br \/>sell to avoid a loss. This calculation is also beneficial if you are trying to reach a certain profit<br \/>margin. The breakeven calculation can be more difficult to calculate if you don\u2019t sell units, as<br \/>services can be subjective.<br \/><strong>How Do You Calculate Your Breakeven Point?<\/strong><br \/>Breakeven point can be calculated a few different ways depending on the specifics of your<br \/>operations. However, most calculations involve backing into how many units you need to sell.<br \/>There are two types of costs you will need to calculate: fixed and variable. Fixed costs are<br \/>expenses that don\u2019t change each month, such as rent or insurance premiums.<br \/>On the contrary, variable costs can change based on the volume you produce. For example,<br \/>maybe it costs you $5.00 to produce each good up to 100. Once you produce over 100 goods, it<br \/>only costs you $4.50. Variable costs can include general and administrative expenses as well,<br \/>such as office supplies, wages, bank fees, meals, and travel.<br \/>Let\u2019s go through a sample problem to help you understand the breakeven calculation. ABC, Inc.<br \/>wants to know how many goods they need to sell to break even. Their fixed costs are $50,000<br \/>and variable costs are $4.00 per unit. Each unit sells for $6.00. The calculation is as follows:<\/p><p><br \/><strong>Breakeven (Units) =<\/strong> Fixed Costs \/ (Sales Price Per Unit \u2013 Variable Cost Per Unit)<br \/>25,000 Units = $50,000 \/ ($6.00 &#8211; $4.00)<\/p><p>As you can see, the company will need to sell 25,000 units to break even. Any units that are sold<br \/>above 25,000 will result in a profit, while selling below 25,000 will result in a loss. Determining<br \/>your fixed and variable costs can be done by utilizing accounting software, like QuickBooks<br \/>Online, that tracks your purchase.<\/p><p><strong>How to Lower Your Breakeven Point<\/strong><br \/>Lowering your breakeven point relies on changing the three factors in the equation: fixed costs,<br \/>sale price, and variable cost. By lowering your fixed costs, you will need to sell fewer units,<br \/>assuming your sale prices and variable costs remain unchanged. Can you renegotiate your<br \/>insurance premiums? How about lowering your rent?<br \/>Furthermore, one of the easiest ways to improve breakeven is to increase sale prices. Inflation<br \/>has been driving up prices in nearly every industry. If you haven\u2019t adjusted your prices for new<br \/>unit costs, now might be the perfect time.<br \/>Additionally, decreasing the per unit variable cost can also increase profitability and cash flow in<br \/>your organization. Can you renegotiate raw material prices with your supplier? How about<br \/>lowering your utility bills by implementing energy efficient policies? Finding ways to reduce<br \/>your costs can help you achieve your desired profitability.<br \/>Getting Started<br \/>How many units do you need to sell to break even? Whether you are looking for help calculating<br \/>your breakeven point or tailored strategies to increase profitability, BUSINESS has you covered.<br \/>Reach out today to schedule your free consultation.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-33 elementor-top-column elementor-element elementor-element-3c5c1b8\" data-id=\"3c5c1b8\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-fdd0edf elementor-widget elementor-widget-spacer\" data-id=\"fdd0edf\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.20.0 - 26-03-2024 *\/\n.elementor-column .elementor-spacer-inner{height:var(--spacer-size)}.e-con{--container-widget-width:100%}.e-con-inner>.elementor-widget-spacer,.e-con>.elementor-widget-spacer{width:var(--container-widget-width,var(--spacer-size));--align-self:var(--container-widget-align-self,initial);--flex-shrink:0}.e-con-inner>.elementor-widget-spacer>.elementor-widget-container,.e-con>.elementor-widget-spacer>.elementor-widget-container{height:100%;width:100%}.e-con-inner>.elementor-widget-spacer>.elementor-widget-container>.elementor-spacer,.e-con>.elementor-widget-spacer>.elementor-widget-container>.elementor-spacer{height:100%}.e-con-inner>.elementor-widget-spacer>.elementor-widget-container>.elementor-spacer>.elementor-spacer-inner,.e-con>.elementor-widget-spacer>.elementor-widget-container>.elementor-spacer>.elementor-spacer-inner{height:var(--container-widget-height,var(--spacer-size))}.e-con-inner>.elementor-widget-spacer.elementor-widget-empty,.e-con>.elementor-widget-spacer.elementor-widget-empty{position:relative;min-height:22px;min-width:22px}.e-con-inner>.elementor-widget-spacer.elementor-widget-empty .elementor-widget-empty-icon,.e-con>.elementor-widget-spacer.elementor-widget-empty .elementor-widget-empty-icon{position:absolute;top:0;bottom:0;left:0;right:0;margin:auto;padding:0;width:22px;height:22px}<\/style>\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-db825a6 elementor-widget elementor-widget-image\" data-id=\"db825a6\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"424\" height=\"442\" src=\"https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2023\/01\/Screenshot_8-1.png\" class=\"attachment-large size-large wp-image-319\" alt=\"\" srcset=\"https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2023\/01\/Screenshot_8-1.png 424w, https:\/\/www.cloudcontroller4hire.com\/wp-content\/uploads\/2023\/01\/Screenshot_8-1-288x300.png 288w\" sizes=\"(max-width: 424px) 100vw, 424px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>What\u2019s your business breakeven point? If you\u2019re like many business owners, the term breakevenpoint might be a foreign concept. However, understanding the role of breakeven point in yourorganization is critical to maximize your cash flow and profitability.In this article, we\u2019ll cover everything you need to know about breakeven point, including what itis, how you calculate [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v16.9 (Yoast SEO v20.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Finding Your Breakeven Point: Where Cash Flow Meets Profitability - Controller4Hire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cloudcontroller4hire.com\/finding-your-breakeven-point-where-cash-flow-meets-profitability\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Finding Your Breakeven Point: Where Cash Flow Meets Profitability\" \/>\n<meta property=\"og:description\" content=\"What\u2019s your business breakeven point? 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