Import From China Business

A practical guide for starting a small business

2010-2012  Copyright import-from-china-business.com

Import from China
Sell on eBay

Sandra Kell
Ontario, Canada
Baby Products
Profit This Year: $10,400

“I started with $1,000 and began importing baby products from China. I sell them on eBay, Facebook and in my local stores.  After 8 months, I am earning $400 a week.  I finally quit my day job!”

Learn How

Business Break Even

Making Smart Decisions Using Break-Even Point

When your business is growing, you are often faced with the decision of whether to invest in your business such as adding more equipment. Business Break-Even or the Break-Even Point is one of the ways that business owners use to make this critical decision.

Return from Business Break Even to Business Finances

Return from Business Break Even to Home Page

Photo Credits:  Clock and Money - Kriss Szkurlatowski

Business Break-Even Calculations & Uses

Business Break-Even is the point at which your income covers your expenses.  It is where you start making money. The Break-Even Point determines how many units you will need to produce and sell before you begin to make a profit.  Here is the formula for calculating the Break-Even Point:

Break-Even Point =
Fixed Costs/(Selling Price Per Unit - Variable Cost Per Unit)

• Break-Even Point is taking your fixed costs and dividing them by the the amount of money left over after subtracting the variable cost per unit from the selling price per unit.  
• If you are below the break even point, you are losing cash. Conversely, if you are above the break even point, you are generating cash.  
• Break Even can also be used to calculate the effect from changes in price, fixed or variable costs, or output.

Example of Business Break-Even

Break-Even Point =

$10,000 Fixed Costs / ($100 Selling Price Per Units - $10 Variable Cost Per Unit)

Break Even Point = 111 Units.  

Conclusion and application:

After you have produced and sold 111 units, you will cover the cost of your investment of $10,000.  So if you believe that 111 units are attainable within a reasonable time frame, then it is a good investment.

However, if you don’t believe that you can produce and sell 111 units within a reasonable time frame, then you should not invest in the equipment.