Strategic Results

Strategic Results
661 17th Street
Manhattan Beach, CA 90266
ph: 310.545.7304
fax: 310.356.3111
alt: 310.567.2379
alan@strategic-results.biz

Breakeven

The Breakeven Analysis is a great tool to see the impact that expense management can have on the entire profitability of the business. The effect of the gross profit (MMU) is clearly identified as it shows how markdowns, the level of initial markup and pricing all affect the bottom line.

What is your Breakeven?
1. What is your required Gross Profit (MMU)?
  Minimize COGS (Cost of Goods Sold) to increase MMU. Overbuying increases COGS.
2. What are your Variable Expenses (Expenses that vary as sales increase or decrease)?
  If sales are dropping, Variable Expenses must be reduced to maintain the Contribution Margin.
3. What are your Fixed Expenses? (Expenses that don't change as sales increases or decreases).
  If you can't cut Variable Expenses enough to reach Breakeven, you must now cut Fixed Expenses.
Manage by the numbers and the profits take care of themselves.

Breakeven Analysis

Sales (Annual Sales)
- Less COGS (Cost of Goods Sold)
= Gross Profit (MMU)

Gross Profit
- Variable Expenses (Credit card fees, Advertising)
= Contribution Margin

Contribution Margin
- Fixed Expenses (Rent, Insurance, Utilities)
= Profit

When Profit = Zero, That is Breakeven

FREE Breakeven Analysis

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All inquiries are kept in the strictest of confidence.

Alan Roseman
Strategic Results
310.545.7304
alan@strategic-results.biz

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