How do you calculate Break Even Point?
With a few days to the end of the application period for the fifth cycle of the Tony Elumelu Foundation Entrepreneurship Program, many prospective applicants are still finding it difficult to get around the financials.
The most challenging aspect of these financials is how to calculate Break Even Point.
Fortunately, the Tony Elumelu Foundation has recognized this Challenge and has put together a one-minute video.
The video educates African entrepreneurs and indeed all applicants for the Tony Elumelu Foundation Entrepreneurship Program on how to calculate Break Even Point.
If you’re still confused about how to calculate your Break Even Point, then watch the video here
The video is facilitated by Samuel Nwanze, Chief Investment Officer at Heirs Holdings.
In case you’re unable to watch the video, here’s is a transcript of the video that illustrates how to calculate Break Even Point.
“Let’s use the example of a bag producer. Take for example that your fixed cost is $10,000 in a month.
And your unit selling price is $25 for a single bag. And your unit variable cost is $13.5.
The formula for determining the Break Even Point is: your fixed cost divided by the difference between your unit selling price and your unit variable cost.
In this example, it means your Break Even Point is 870.
What that means is that you need to produce at least 870 units of bags and sell them at a minimum price of $25”.
Hope that helps.
If you’re still yet to submit your application for the Tony Elumelu Entrepreneurship Program, then hurry and do so on or before March 1, 2019.
Good luck as Apply for the Tony Elumelu Foundation Entrepreneurship Program.
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