Using our online Break-Even Calculator
Your break-even point is the point at which you generate just enough revenue to cover all of your expenses. Creating profit means you need to generate revenue above your break-even point.
By entering a few numbers below, we can calculate either
- how many "units" you should sell each month in order to reach your break-even point, or
- the price you should charge to break even.
Here's a list of what you'll need to use this calculator:
- Total Revenue for the previous 12 months.
- Cost of Goods Sold for the previous 12 months. This should be your total costs of goods sold for your last full year of business. You can find this number on your P&L report. It includes costs of labor, materials, & field equipment.
- Monthly fixed costs. (Fixed costs include fees for rent, utilities, office supplies, professional fees, advertising, office staff, management wages, software, etc. And don't forget your owners pay!)
- Monthly variable costs. (Variable costs include the costs that fluctuate with the number of jobs you do or the number of customers you serve. These costs typically include field labor, materials and supplies, fuel, etc.)
- Unit of service. (For example, it's common to use the square foot as a unit of measure on jobs, with a mark-up on each square foot. However, price per square foot is not equally measurable on all jobs. AND it can be unreliable...one job can be large and another small. So, instead of using the square-foot method or a job as a unit sold, for lawn care, we recommend using an hour as a reliable unit of measure when it comes to calculating cost and selling price. Doing so gives you a consistent and reliable measurement of how many square feet can be serviced in an hour.)
- Either the price you charge your customers per unit OR the number of units you sell each month.
With those numbers in hand, let's jump in and calculate your break-even results.