Break Even Analysis - Excel - Excel by ScoreSMB

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									                          Breakeven Analysis
                               (Very simple, visual tool designed to quickly help
                               you understand your company's breakeven point)

The concept of breakeven can be confusing for many entrepreneurs, but it is an important
business concept to understand and master.


The concept of Breakeven is important because it is the point at which your Sales exceed
Expenses. Once your company has reach breakeven, each incremental sale (or a
portion of it) becomes profit. If you are expecting to fund your company with other
people's money, you can be sure they will ask you what is your breakeven point and when
will you get there. Being able to respond quickly, with confidence will be important.

Using the Breakeven Calculator is easy:
1) Review Sample Calculator…experiment by changing Sales and/or Expenses to see
what happens to the Breakeven Point.
2) Go to the Green Tab labeled "Worksheet"
3) Enter company name, preparer's name & date in Rows 1- 3
4) Input a Sales Estimate in the month that you first expect to have Sales. Few
businesses have Sales in the first month so be conservative. At this stage it is not
important to be precise, but to begin to get an idea of when Sales will begin and how you
expect them to grow over the first few months.
5) Estimate your Total Expenses for each month, including your Salary. As with your
Sales estimate, it is not important to be precise, but it is important to begin to understand
what expenditures will be required and when.
6) View the results both numerically, graphically.
7) Don't like the results…change one or more of your variables.
8) Printing is easy…page is formatted to print to a single page.




Note: All cells in this worksheet are locked, except the input fields to prevent the
accidental overriding of formulas. If you would like to edit this spreadsheet, we
encourage you to first make a copy so that you preserve the original. Then go to Tools,
Protection and select Unprotect.




                  © 2003 The One Page Business Plan Company. All Rights Reserved
      For additional information on other products or services visit www.onepagebusinessplan.com
                                                                             Monterey Fresh Fruits, Inc.
                                                                                Breakeven Analysis
                                                           Prepared by: Elizabeth Watson       Date: November 15, 2003

                   Month 1     Month 2     Month 3     Month 4      Month 5       Month 6      Month 7     Month 8       Month 9     Month 10   Month 11   Month 12   Total
Sales                     0         500         750       1,000        1,000         1,000        1,600       2,000         2,200       2,200      2,200      2,200    16,650
Expenses              1,000       1,000       1,000       1,000        1,000         1,000        1,000       1,000         1,000       1,000      1,000      1,000    12,000
Profit               (1,000)       (500)       (250)           0            0             0         600       1,000         1,200       1,200      1,200      1,200     4,650



                                                                     Breakeven vs Breakthrough

           2,500
                                                                                Breakthrough Point

           2,000


           1,500
                                                                    Breakeven                                                       Profit
   Sales




                                                                Sales = Expenses                                       Sales Exceed Expenses
           1,000
                                 Deficit Phase
                         Expenses Exceed Sales
            500


              0
              Month 1          Month 2     Month 3      Month 4        Month 5       Month 6        Month 7       Month 8       Month 9       Month 10 Month 11 Month 12

                                                                                       Sales         Expenses




                                                            © 2003 The One Page Business Plan Company. All Rights Reserved
                                                 For additional information on other products or services visit www.onepagebusinessplan.com
                                                                                          Your Company Name
                                                                                           Breakeven Analysis
                                                                                        Prepared by:      Date:

               Month 1       Month 2         Month 3        Month 4       Month 5       Month 6       Month 7       Month 8       Month 9       Month 10   Month 11   Month 12   Total
Sales                                                                                                                                                                                    0
Expenses                                                                                                                                                                                 0
Profit                   0             0               0              0             0             0             0             0             0          0          0          0           0



                                                                                    Breakeven Analysis
                                                                 Note: Breakeven occurs when the Blue line
           1                                                       (Sales) crosses the Red line (expenses


           1


           1
   Sales




           1


           0


           0


           0
           Month 1       Month 2           Month 3         Month 4        Month 5        Month 6         Month 7        Month 8         Month 9        Month 10 Month 11 Month 12

                                                                                          Sales           Expenses




                                                              © 2003 The One Page Business Plan Company. All Rights Reserved
                                                   For additional information on other products or services visit www.onepagebusinessplan.com

								
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