The business world can be compared to the infamous coliseum of the Roman Empire, where the blood and sand of the weak are splattered on those famed sands for the enjoyment of the cheering audience. Well, in this case, the spectators are cheering per semester, but with the right motivation, they would move on to the best gladiator. Now, this very fact can be an issue for the newbie who just decided on venturing into a particular industry without the right backing and wherewithal to stay relevant. The constant struggle would sink them in the sands of business without adequate preparation and quality planning. However, with the right boost, they can grab onto the ledge and grow from there on into becoming top-shelf ventures. Now, for the veteran, handling the business world revolves more around staying afloat and being relevant with the constant innovation that the world keeps facing. This very fact can be daunting enough without the adequate know-how, and techniques being put in place to checkmate the volatility in business. How then does a business stay afloat? How does a veteran break-even in
In this article, we would take a look at five smart ways a veteran can break even in business, and a key factor in which to take note.
The term break-even is used as an active notifier for a point in business when a business's revenue adequately supersedes the expenses incurred during a set period. This term is commonly used in business to signify growth and adequate management of available resources. To break-even, a business must put in place the right measures needed to account for more profit when the active or running cost has been taken into consideration. Basically what this means is that a business is said to break even when the total expenses, including overhead cost and other indirect expenses, have covered for while still making considerable revenue. This point is different for each business, as several factors have to be considered, such as running cost, cost of production, startup capital or loan, and the rest. Now, to stay competitive and
break even after considering all the aforementioned can be daunting, that's why certain factors have to be considered for a veteran to reach the break-even point.
5 Smart Ways to Break Even As a Veteran
1. Adequate Pricing
A key factor to breaking even in business requires that you adequately set the pricing of your services or commodities when you have successfully figured out your break-even point. This allows you to know the constant change in pricing you might have to make to help stay within your break-even point while still catching up on profits and long term goals. For your to successfully stay in the competition, it is advisable to for long term target to be incorporated into your pricing then spread over a longer period than against trying to achieve it within a short duration. Once all long term goals have been achieved, then your pricing can now reflect only the cost of production and incurred expenses.
2. Improved strategies
The break-even point of every business necessarily doesn’t have to be the same, as the effort and funds inputted vary based on their commodity or services. This very fact influences the way every business approaches reaching their break-even point, as their characteristic of the business. So when trying to achieve a set break-even point, it is imperative to set targets based on what works best for your business and allowing the space for flexibility.
This could require that you increase production to counter for the set break-even point or cut down on the overhead cost to achieve that optimal point. However, it is important to note that several strategies work based on the business applied to, as different business models require different business strategies.
3. Expenses Management
Another way to hit the set breakpoint is for better management of your finances which ultimately boils down to how you handle your expenses. This can be a deciding factor as you work towards hitting targets because the biggest issues most businesses face is recurring expenses and improper management of funds.
This in itself can set your finances back, as you continual rack in more expenses and overhead cost in your business.
4. Increased Production
Since the reason you are trying to break even is to take your business away from the red side of the ledger, then more active participation needs to be inputted to help push you to that point. The active participation you might need requires that you increase your production output for your business to cover up for any other drag back from expenses and overhead costs. Over time, the cost of production would be covered for by the profit, and that will handle the possibilities of your pushing your business towards the break-even point.
5. Marketing and Sales
For your business to grow, it needs to reach out to the possible consumers of your goods or services, and that can only be done by applying marketing strategies such as Ads and promotional marketing. Now, it has to be noted that these processes cost money which could have been further inputted into your business. However, since these marketing strategies are needed for your business to grow, it is imperative for you to set a budget for promotional marketing, which would be incorporated into your expenses or overhead cost. This cost after a set period would then be recovered when the input or profit acquired from the marketing promotion is calculated and put aside. This way, there can be a smooth running of your
business while still maintaining the set break-even point.
In conclusion, it should be noted that maintaining a set break-even point can be a deciding factor in how your business grows, as most potential investors usually require knowing your break-even point. The adequate application of all these tips can help you get the desired change you need to achieve the set break-even point.