Break-Even Analysis

This article is from Shopify, and was republished and shared through Elksourcing with the permission of Shopify.Original link:https://www.shopify.com/blog/break-even-analysis Starting a business often carries risk. As the saying goes, “You have to spend money to make money.”While that’s not always true, there is one very effective way to lower your risk: do a break-even analysis. A break-even analysis will tell you exactly what you need to do in order to break even and make back your initial investment. If you run a business—or you’re thinking about starting one—you should know how to do a break-even analysis. It’s a crucial activity for making important business decisions. What is break-even analysis? A break-even analysis is a useful tool for determining at what point your company, or a new product or service, will be profitable. Put another way, it’s a financial calculation used to determine the number of products or services you need to sell to at…