Break Even for Product Based Businesses
In a product business, you've got a more complicated calculation than service businesses. You probably know that, but the starting point for everyone is knowing how much money you need to pay your personal bills.
Starting off, looking at your home budget, how much money do you need to pay or contribute to the household costs? Rent, mortgage, fire, electricity, utilities. Internet, motor vehicles if they're not in the business, holidays, entertainment, food, that's an important one, and kid school fees, kids' clothing, extra curricular activities, holidays. Everything that you would normally spend at home, you need to work out what that is. If that's split amongst different members of the family, what your contribution needs to be for that.
If you're already drawing a particular set amount out of your business as a salary wage or drawings, depending on your business structure, that's great. But just double check that you have got the right number for the purposes of your household,...
Find out where the pressure is in your business
The Business Barometer will measure your business finances across three critical areas: Core Concepts, Focused Management and Planned Growth.