Among the most important figures for your business is cash flow.
Don't confuse making a profit with cash flow. You might be making a profit, but if you run out of cash to pay your bills, your business can't operate.
You can be making what seems healthy revenue but in fact making a loss; work out the break-even point so you know how much you have to sell to cover your costs. The break-even point is calculated using break-even analysis.
The break-even point calculates the level of sales or services required to pay for all the overheads of the business, and at least come out even. This should be calculated over a 6 and 12- month period.
Consult your accountant or business adviser to seek help in preparing the Break-even analysis for your small business.
Tips to assist in your break-even calculations: