Vyavsay School
← Glossary

Break-even

The level of sales at which a business covers all its costs — no profit, no loss.

Each sale leaves something over after its own costs — the margin. Break-even is the number of sales whose margins add up to your fixed costs: rent, salaries, electricity. Below it you lose money each month; above it, you start to make some.

Knowing your break-even turns a vague target into a daily one: how many orders, plates or hours it takes before the day is paying for itself.

Learn it in a lesson

See also: Cash flow