In this article series, we estimated the total money going out of (a.k.a expenses) and compiled sources of money coming in (a.k.a revenue) your business on a monthly basis. Now it’s time to bring the pieces together.

Think of your business as a jigsaw puzzle . . . I love jigsaw puzzles. Everyone does them a different way; I look at the picture on the box to understand the end goal. And I recommend the same for your financial picture. To achieve financial breakeven (or profitability), you must assemble the pieces so they fit together. In other words, your price per unit x number of units sold x number of customers must cover your monthly spending.

Here is a easy to follow example:

• If you spend $5,000 per month, then that’s what you have to bring in.
• If you charge $50 per unit for your product or service, that means 100 customers must purchase to hit that $5,000. ($50 x 100 = $5,000)

The fun thing is, you can play with the pricing to get the pieces to fit better. Let’s say for instance, you raised your price to $62.50 per unit. Now you’d only need 80 customers to hit that same $5,000.

Neat, huh?

Be careful though. When adjusting your prices, you gotta strike a balance between your revenue target and what people are willing to pay. Over pricing your products and services could men less people buy. And if you underprice them, you may have so many people buy that you can’t efficiently deliver.

Understanding your financial breakeven point is a powerful tool for business growth. It provides a clear target to aim for and helps you make informed decisions about pricing, sales strategies, and resource allocation.

We know that math can be scary, but don’t let the numbers intimidate you. Becoming profitable is less about the numbers and more about the strategy. The Growmetix ‘Do the Math’ video series will help you break down this strategy step-by-step. If you want weekly bite-sized lessons sent straight to your imbox, sign up for our FREE crash course today.