How to Do a Break-Even Analysis to See If Your Business Idea Could Work

If you’re pondering starting a business and whether it can be profitable, this is a must-read.

I recently have been going through the exhilarating (and frequently late-night-filled!) experience of launching my own e-commerce business (a blog + shop to get jiggy with the best decade… the 1990s, that is!).

Not surprisingly there’s a lot of steps to figuring out if a business is viable and then actually launching it.

I’ve learned one of the most helpful nuts-and-bolts tools you can use to predict business feasibility is the Break-Even Analysis.

This means you figure out how many units of your product do you have to sell to break even (i.e. not lose money). This is an incredibly empowering knowledge to have, because it puts things in concrete terms. Oh I have to sell just 6 shirts this month to not lose moolah? I can totally do that! And then anything after that break-even number of units is profit 🙂

I’m going to later write/vlog about my process choosing an e-commerce platform a little later (spoiler alert: I went with Shopify, largely in part to their 14-day free trial test-run and their awesome FREE blog resource… my thinking: if they’re willing to offer really good advice for free to people who aren’t yet their customer, how great must they treat their actual customer?!).

In the mean-time, I highly recommend you perform a little Break-Even Analysis as instructed by the Shopify’s How to Perform a Break-Even Analysis. They even give you the pre-made google-spreadsheet with the equations already plugged in!

Mine took me 11 minutes, so hop to it bossery!

SIGNOFF_LucyRoss

Lucy Ross

Lucy is the former Like a Boss Girls EIC & founder of Hello Lucy Design, a web management & design business. She has worked for the BBC in London, Nickelodeon in NYC, and Jazz Aspen Snowmass in Colorado. She is three-time Co-Director of NYU's Fusion Film Festival honoring women in media.

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