Breakeven point

Wikipedia, the free, on-line encyclopedia, describes the breakeven point for a given business as:

the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has 'broken even'.

Breakeven point analysis is a useful tool for entrepreneurs in a number of ways. First, it can tell us, in the absense of other data, how much we will have to invest in a business to make it profitable. Second, if we're trying to decide among a different businesses which will be the most promising for us, we can redo the analysis for each potential business. Third, if we're trying to decide how much to charge, we can use the analysis to compare profitability at various price points.

If you want to read more about it, read the entire Wikipedia article and follow its links and references. And google breakeven point, there's a ton of stuff on it.

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Entrepreneurship informs all my professional activities. For entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for entrepreneurial writing to www.kearneymusicschoolmurders.blotspot.com