I’ll be the first to admit that numbers and I are like liquid and oil, sour cream and lemonade and just about any other combination that absolutely does not mix. Although this is the case for me I can understand why they are important. You need numbers to justify why you make decisions. This goes back to my post about why you can’t make opinion/feeling-based decisions your brand needs data.

A formula a simple as break-even is what every brand needs but also something that can be applied to everyday life. When you think about it, you may think in a way of breakeven already. By definition according to Merriam Webster’s website, the point at which cost and income are equal and there is neither profit nor loss alsoa financial result reflecting neither profit nor loss.

This definition, in particular, reminds me of the way I spend money if I purchase this how and when will I recoup the cost? Here is your formula: Breakeven (units) = Fixed Costs / (Selling Price – Var. Cost). When you think of your brand this simple formula can be used in a very simple manner. You sell a swimsuit for $25, it costs $5 per unit to make which is what you pay to the wholesaler, and your swimsuits company fixed costs is $1,000. $1000/(25-5)=50 Now you know that you only need to sell 50 swimsuits in order to break even.

There are many more formulas you can use to make better decisions for your brand or company. Let me know in the comments which formulas have best helped you in decision making!

Leave a Reply

Your email address will not be published. Required fields are marked *