How Small Businesses Can Reach Break Even

For every small business owner, understanding your break-even point is essential. It's the number that shows how much you need to sell before you start making a profit. Once you cross that line, every additional sale contributes directly to your bottom line.

A Simple Example of Break-Even for Services

Let's look at a consulting business to make this clear.

• Fixed costs (rent, software, insurance): $4,000 per month
• Price per session: $200
• Variable costs (materials, travel, admin support): $50 per session

The formula is:

Break-Even Point = Fixed Costs ÷ (Sales Price – Variable Costs)

4,000 ÷ (200 – 50) = 26.6

This means you need to deliver 27 sessions per month just to break even. Anything above that is profit.

Why Your Break-Even Point Matters

Knowing your break-even point gives you clarity and helps you make better business decisions:

• ✅ Price with confidence – ensuring your fees cover all costs
• ✅ Set realistic sales targets that align with your overheads
• ✅ Plan ahead for growth – identify when it's time to expand, hire, or invest in new tools

For small business owners, this isn't just a number. It's a financial planning tool that gives you control over your business and a clear view of what success looks like.

Getting Accurate Numbers

Of course, your break-even calculation is only as good as the numbers you put into it. That's why clear, reliable bookkeeping is essential. Accurate financial records allow you to:

• Track fixed and variable costs correctly
• Understand real profit margins
• Make smarter, data-driven business decisions

At CSCG, we ensure your books are accurate and up-to-date so you can calculate your break-even point with confidence and focus on running your business.