Strategies for Break-even Point

There are two key strategies to keep your breakeven point at a manageable level. The first is to increase the company’s overall gross margin simply put, increase your profit level on every sale. The most obvious way to accomplish this is to raise prices, but for some companies and products that is not an option. Instead they should look to either decrease variable costs or concentrate more heavily on the products with the highest gross margin. The second way to manage the breakeven point is simply to cut overhead. Nobody likes to do it, but if the company fails, then all holdings will be lost anyway. If managed early enough, a company can cut the fat without touching an ounce of the bone. Often there is plenty of unnecessary overhead to be cut without touching a single employee. How many dotcom jobs could have been saved, if companies had simply served generic coffee every morning instead of specially imported European blends? We all want our companies to be happy, comfortable places, but paying attention to our breakeven points can help alert us when it’s time to give up some of our toys and which, if any, we can afford to keep.