Market research and framing the business idea

2. Determining the breakeven point

We have already mentioned above that you somehow have to determine whether or from when a business is worthwhile at all. The break-even point is important for this. Strictly speaking, we have already talked about this. But here are again the formulas with which you can calculate the break-even point:

Selling price × QUANTITY = fixed costs + (QUANTITY × variable costs)

(Quantity is the sales quantity searched for here.)

Alternatively, you can calculate the break-even point in this way:

break-even point = fixed costs / unit contribution margin

(The unit contribution margin is the difference between the sales price and the variable costs.)