Tool 01 · Chapter 1 — Know Your Numbers

Break-Even Calculator

The first number every owner should know — and the one most don't. Plug in your fixed costs and unit economics; see exactly how much you need to sell before the lights stay on.

Your numbers

Estimates are fine. You can refine as you go.

$
Rent, insurance, utilities, payroll for permanent staff, software, debt service.
$
Average ticket per order (restaurant), price per item (retail), avg invoice (services).
$
COGS + hourly labor allocated per unit + processing fees + packaging.
#
For margin-of-safety calculation.
You need to sell
—
units per month before a single dollar hits your pocket.
Break-even revenue
—
Contribution / unit
—
Margin of safety
—

Revenue vs total cost

Where the lines cross is where you stop losing money. Anything past that — you keep.

Revenue Total cost Fixed cost Break-even point
From the book — chapter 1 "The most expensive month of your life is the one where you're guessing. Break-even isn't a finance-class abstraction. It's the line between owning a business and owning a job that owns you."

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