Sign up for FREE Newsletter
Sign up for my FREE newsletter and I'll send you a copy of a special report called, "What Must Starbucks Do?" This 30 plus page report outlines the mistakes that Starbucks has made along the way. We used this report to make sure that we weren't making the same mistakes that they have made.

E-mail
 
Your email address will never be sold or given away for any reason.
 
 
Over 100 pages of Power
Packed Material
 
 


How Much Do You Need?
BreakEven Analysis
Breakeven analysis is a tool used to determine when a business will be able to cover all its expenses and begin to make a profit. For the startup business, it is extremely important to know your startup costs, which provide you with the information you need to generate enough sales revenue to pay the ongoing expenses related to running your business.

A startup business owner must understand that $5,000 of product sales will not cover $5,000 in monthly overhead expenses. The cost of selling $5,000 in retail goods could easily be $3,000 at the wholesale price, so the $5,000 in sales revenue only provides $2,000 in gross profit. The breakeven point is reached when revenue equals all business costs.

To calculate your breakeven point, you will need to identify your fixed and variable costs. Fixed costs are expenses that do not vary with sales volume, such as rent and administrative salaries. These expenses must be paid regardless of sales, and are often referred to as overhead costs. Variable costs fluctuate directly with sales volume, such as purchasing inventory, shipping, and manufacturing a product. The formula for determining your breakeven point requires no more than simple arithmetic.


For more information on coffee shop start-up costs, pick up a copy of "How To Start And Grow A Successful Coffee Shop".

For more information on coffee shop financing, view our coffee shop financing page.

For any questions or difficulties contact thebrewbook@gmail.com

Disclaimer
 
Home|Coaching|Free Resources|Contact
Copyright © 2009, thebrewbook.com