Ever Wondered If That Job Offer Was Worth It?
Do You Know Your Break-Even Rate?
All Successful Businesses Know What Their Break-Even Point Is on Sales. They ask themselves questions like:
- What is my required sales volume to break even
- What is my break-even quantity
- What is my break-even point in dollars
For example, you need $6,000 to cover your fixed and variable costs and reach your break-even point in sales. You determine the break-even point in sales by finding the contribution margin ratio. Then use the break-even formula:
- Break-even Point Per Unit = Fixed Costs / (Sales Price Per Unit – Variable Costs Per Unit)
If this approach is good enough for business, then you should learn to treat yourself like a business and determine your own break-even point when selling your labor.