In this guide, you’ll learn the key considerations, work through a practical example and find useful next steps. Take your time and use the free worksheets to put ideas into practice.
What you’ll take away
- Identify fixed costs
- Identify variable costs
- Calculate break-even
Identify fixed costs
List rent, subscriptions, insurance and other costs that occur even with no sales.
Identify variable costs
Include materials, fees, delivery and time needed for each sale.
Calculate break-even
Estimate the number of sales needed to cover total costs; then add a buffer.
Review actual results
Compare forecast and real margins each month.
What to gather
- Fixed monthly costs
- Cost per sale
- Realistic sales assumptions
Putting your learning into practice
Use the guidance above to identify the information you need and the questions to investigate. Consider:
- Identify fixed costs.
- Identify variable costs.
- Calculate break-even.
- Review actual results.
This is general financial education, not a personal recommendation, an assessment of suitability or an invitation to buy or arrange a financial product. Check current official information and obtain appropriate professional advice for individual circumstances.
Further help
For up-to-date rules and support, see this UK guidance resource. Check which rules apply in your part of the UK.
Keep learning
Use a worksheet to explore your own figures, or browse another topic in the guide library.
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