Our break-even calculator is an Excel spreadsheet. Download our break-even calculator (Excel, 45KB), and open it in Microsoft Excel or a compatible program. The spreadsheet will open directly to the main tab (Break-even). A second tab (Help) is available should you need any assistance.
Enter your desired financial return in the first cell (E7). Note that this figure is for the entire year. For example, if you want to bring in $250,000 after expenses, enter $250,000 in this cell.
Enter the cost of your overheads for the year. This includes your fixed costs such as rent, Internet access, utilities, equipment leases and non-production payroll. At this point, the break-even calculator will display the gross margin required.
Enter your current, or best guess, price per unit (in cell E15).
Enter your costs for both labour and materials. Pay attention to the calculations the spreadsheet makes at this point. Consider:
- How your costs and gross margin per unit relate to your pricing?
- Whether your margin is too small or too much?
At this point, don’t adjust them just yet. You’ll want to first establish your baseline using your existing prices and costs.
Enter the number of weeks per year you intend to work (in cell E29). If you regularly shut down for two weeks in July and another two weeks in December, you would enter 48 weeks here. Factor in any holidays as well.
Analyse the figures in the ‘Results’ section. Here you’ll see the total number of units you’ll need to sell for the year in order to reach your desired financial return. You’ll also see the number of sales required in dollars, as well as the number of units you’ll need to sell each week to stay on track.
Make appropriate changes to any of the input boxes if you feel you need to.
Now that you have your baseline, print out your results. You’ll likely want to refer back to these figures as you experiment with different scenarios.