Break-Even Analysis with Retail POS
What Is Break-Even Point?
There are many start-up companies in progress. They need a break-even analysis before they move on to a business plan. The first and foremost question of a new start-up owner is, “when will I break even?” Retail POS by CISePOS gives businesses and start-ups an advantage of calculating the break-even points.
Not only start-ups but even the existing businesses want to calculate break-even points of different products. It is time taking if you calculate your break-even for hundreds of products. A retail POS offers you excellent analysis and reports for every product.
Retail POS saves your time with an easy-to-use interface. All you need is an online application in this digital world to manage your workload and invest your time in your business more efficiently.
How To Find Your Break-Even Point? Retail POS For Break-Even Analysis:
Break-even points can be calculated using manual methods or using a spreadsheet. The break-even analysis helps a business to know whether their prices are too low or are they too high?
One of the best methods to calculate your break-even is investing in a retail POS by CISePOS. It helps you with many other analyses. It helps you grow your business with many types of analysis.
Moreover, a retail POS eases other tasks such as inventory management, sales reports, FBR taxation, and other analysis which are time-consuming. A retail POS helps you manage your time efficiently.
There are different methods used to find break-even analysis manually. One is calculated on the number of units of product sold and the other on points in sales dollars. Here is how to find a break-even point using manual methods:
Calculate A Break-Even Using Units Sold
The Break-even point for units sold can be calculated by dividing fixed costs by the difference between revenue and variable cost.
Fixed costs are those which are not changed over some time. Revenue costs are the profit on the items and variable costs are those cost which is paid to laborers or machine maintenance.
- Break-Even Point (Units) = Fixed Costs ÷ (Revenue per Unit – Variable Cost per Unit.
Calculate A Break-Even Using Sales Reports
Sales reports can help you get a break-even analysis. The Break-even point can be calculated by dividing fixed cost by the contributional margin. Contributional margin is the difference between the price of the product and the fixed price.
- Break-Even Point (sales dollars) = Fixed Costs ÷ Contribution Margin
- Contribution Margin = Price of Product – Variable Costs
A retail POS helps you calculate accurate break-even points. It also helps you with other analyses on the same database.
Terms To Classify Your Costs For Break-Even Analysis
There are some terms that you might want to know for your better business understanding and calculations. It will help you with a better analysis of your business and plan productively for the ultimate growth.
Fixed Cost: fixed costs are not affected by the number of products or services sold. It is the cost of internet, electricity bills, rents, and other services such as software charges that you have to pay every month.
Contributional margin: It is the cost that you earn from the items or services sold. For example, if you buy an item for Rs. 100 and sell it for Rs. 150. Then this Rs. 50 can be used to cover the fixed costs. It is called the Contributional margin.
Profit earnest following your break-even: when your fixed and variable costs become equal to sales then you can break even. More sales from this point will count as profit.
How Retail POS by CISePOS Ease Your Business
Retail POS will help you find accurate results that will help your business to grow. CISePOS is specially designed for businesses. It helps you to add different categories of items and products and their prices.
It will generate sell invoices as well. It will automate your tasks through an automated calculation of sales. It will generate charts for different analyses. It will generate balance sheets and profit-loss sheets.
CISePOS brings you an easy-to-use Point of Sales software that manages your daily business calculations and management. IT reduces your workload and helps you process an efficient and automated business.
You can register for a free retail POS demo.
For complete implementation, you can contact our POS experts and consultants for training.