SEIB: break even - costs and spreadsheets

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The break even point is the point at which your total costs equal total revenue. Beyond this point your venture begins to make a profit/surplus. In this video, Mark explains how to calculate your break-even point. Once you have devised a pricing strategy, you can use this approach to test how much business you need to do to before making a profit.

Access a pfd transcript of this video here

In this video, Mark walks through a simple example of a cash-flow forecast. Keeping on top of your cash flow is critical for any business. It helps you adapt to changing circumstances such as price fluctuations and be ready for opportunities.

Break-even and cash-flow

Your break-even analysis will be closely linked to the price you set. This will help you anticipate how much business you need to do before you are in profit. Your cash-flow will help you ensure you maintain a healthy bank balance as you trade. It may also be useful when applying for loans.