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Break Even point explained in 2 minutes or less

Updated: Jan 4

Do you know your Break Even point? If you don't, chances are you're going around in circles.

It's a quick concept that could save you thousands, check it out.

(If you need help working it out, flick me an email and I'll set you up with a calculator I made to work it out quickly and easily)

Transcript for those who prefer their learning to be motionless and on a page:

Hi, I'm Jake from upper limit business and mindset coaching. And today on here's the thing about breakeven explained in two minutes or less, we're going to talk about a few concepts around breakeven points in businesses, particularly what I would call the two minute noodles point to two minute noodles point, and lifestyle breakeven. So let's start the clock. So what is a breakeven point? First thing we need to understand in the business is that we sort of have two equations playing off against one another. On one side of the ledger, we've got the things we sell minus what they cost us to sell. So if we think about you sell 100 bucks worth of T-shirts, it might cost you $70 To sell them. So you've got 30 bucks left over. That's on one hand. The other side of the ledger we're trying to balance up there is that 30 bucks is that more than what it costs us to run the business each month? Okay, so if you had $30 in expenses for your, for your rent for your wages for your employees, and you have 30 bucks in income from sales after you pay for that stock or service, you'd have no money left over. So that's our breakeven point. Now, if we can tip those scales a little bit and say, All right, well, we need to have a little bit more profit. And suddenly, we sell the T shirts for $105. Well, 105 minus the $70 it costs us, we've got 35 there now, and it only costs us 30 each month. So that's sort of the difference between what a breakeven is, we'd have five bucks a month in that scenario. So if we think about two kinds of breakeven, the first would be what I call two minute noodles, breakeven, which is the one I just talked about, where basically, you're trying to get to the point where you can afford to live on two minute noodles, and keep the doors open. That's the first first one we need to look at. The next would be what's your lifestyle breakeven. So if you need to live on five bucks a month, awesome, that's your lifestyle break. But maybe for you, that's 50 bucks a month, it's 500. It's 5000. Only you can define that. How do we get better in that area? Basically, again, that first thing is looking at it actually understanding so to two parts of the factor one would be your profit side of the scale is how to get your profit up? The other would be how to get your expenses down? Now quite often getting profit up a little bit and expenses down a little bit is enough to tip the scales. But this is quite often something that you need to do across time, but deliberate action is the key in this space. Thanks for joining me today on explained in two minutes or less, which is actually called here's the thing about I'm Jake from upper limit business and mindset coaching. Have a great day, onwards and upwards.


Thank you for taking the time to read and for investing in better thinking.

If you would like to discuss any of the concepts further you can do so by emailing or by clicking here to book a call.

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Until then, Onward & upward, Jake

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