How Many Coffees Do I Need to Sell to Not Go Broke?
When I opened my small coffee cart, I had $1000 fixed costs per month (rent, machine). Each coffee cost me $1.5 and I sold for $4. How many coffees to just break even? I had no idea, I just hoped people would come. First month I sold 300 and lost money.
The Scary Question Every Business Owner Avoids
Break-even point is the number of sales you MUST make to not lose money. If you don't know it, you are gambling. Most freelancers don't know it either: how many hours must I bill to cover my costs?
Simple Math + Free Break-Even Calculator
Break-Even = Fixed Costs / (Selling Price - Variable Cost)
My example: $1000 / ($4 - $1.5) = 400 coffees. I needed 400 sales, I only did 300. Now I knew my target.
I use a free break-even calculator tool now. Enter fixed costs and price, it tells me my magic number. It's completely free and works on my phone while I'm at the cart. No more guessing.
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