How do you calculate the Break-even point of a Service Business?
I’m glad to hear that you’re using Business Plan Pro 2007 but sad to hear that you’re having problems with it calculating your Break Even point. One thing that you might try in Business Plan Pro is to reset the default formulas in the Break Even table so that it is pulling the correct data from your Sales Forecast and Profit and Loss to calculate the break even point. You can reset the default formulas by right clicking in the Break Even table and choosing Formula Reset > Table. If you’re still having problems with it calculating a negative break even point, you might have an unusual forecast like a partial year for the first year in the plan. In that case, you’ll be better served by doing your own Break Even point. It’s usually calculated by taking the following: Fixed Cost ÷ (1-(Unit variable Costs/Unit Price)) Where: • Unit Price – The price that you charge per unit. Take into account sales discounts and special offers. For non-unit based businesses, make the per-unit revenue $1 and
