Apr 04, 2014 19:22
For a Chief Financial Officer of a company, profitability is sure to be front-of-mind. Even if you have a great product and are generating consistent sales, many business owners and key decision makers can find themselves surprised that their business is still not making them any money.
According to the US Small Business Administration, breakeven analysis is a great tool to determine the point at which your business is generating revenue at least equal to expenses. Any additional revenue can at this point be considered profit. It is critical if you are just starting your business to identify and incorporate startup costs into this calculus, as initial upfront investments can be significant and will affect net sales revenue needed to break even.