Starting Up A New Business - How You Can Quickly and Easily Do a Break Even Analysis

Break-even analysis is a good tool for quickly determining if an idea has any legs under it. It is not meant to be used alone as a sole decision making tool. Most business formula-tools work better when tracked over time and compared with other decision making tools, including the owner's gut instinct.

Break-even needs you to track your direct costs. Direct costs are expenses that only occur when you sell a product. Examples of direct costs are cost of products you sell and supplies. Once you subtract these costs from your income, you know how much each sale contributes to pay for your overhead (another term for indirect/fixed costs) costs. Business terminology can get confusing but hang in there.

This can also be done with percentages.

Step 1 is to subtract your direct costs from your income to get a number called Gross Profit.

Step 2 is to divide the gross profit number by your income to determine its percentage of income; e.g.

$2,000 of income minus $500 of direct costs equals $1,500 of gross profit.

$1,500 divided by $2,000 equals 75%. This means that 25 cents of every $1 of sales goes to paying direct costs (products and supplies) and that 75 cents is left over to pay for all the other expenses (indirect costs) plus your profit.

If your company has rent, advertising, utilities, and auto expenses (all indirect costs) of $1,000.

Then $1,000 divided by .75 equals $1,333 (this is the sales volume necessary to pay all your indirect costs and your profit equals zero.

The $1,333 level of sales in this case represents your break-even point.

How can you use break-even info? Using the above example, say you want to hire a helper that is going to cost you $800 per month. How much more income do you need to pay for this helper?

$800 divided by .75 equals $1,067.

You need $1,067 additional income per month to pay the $800.

Break-even analysis is a great way to set sales goals for your sales staff. The base salary you pay would be an indirect cost and any commission would be a direct cost.

Lets use the above example.

$800 for base and you are going to offer a 20% commission on all sales.

The 20% would have to be added to the direct costs (25% + 20% commission = 45%).

The new gross profit as a percent would be 100% (total sales) - 45% = 55% gross profit.

$800 base salary divided by .55 = $1,455 in additional sales to pay for their base salary and commission.

Lets say you want $5,000 per month for yourself. Add the $5000 to the indirect costs and then divide by the Gross Profit % and you now have a pretty good idea of what your sales volume needs to be to provide you with $5,000 a month income.

Let's build on the salesperson example.

$5,000 plus the indirect costs of $1,800 equals $6,800.

$6,800 divided by the gross profit % of 55% or .55 = $12,364 in monthly sales volume should provide you with $5,000 in monthly income.

Break-even analysis is a linear tool and assumes that operational relationships between sales and expenses will remain the same (as laid out in the formula). Decisions involving longer terms or with multiple variables are more difficult to predict and should be re-analyzed over time.

Bruce Hunter is the CEO of CORE Magazine CORE is the leading online source for starting up a new business Visit our free online resource center now to get free access to information on loans for small businesses

The Facts About Poor Credit Secured Loans

Poor credit secured loans cater for people who have a bad credit history or poor credit score. They may have defaulted on their mortgages or other loans, and have arrears. Such loans also cater for people with CCJs, bankruptcy judgments, etc. Such is the proliferation of lenders that there is rarely an occasion where someone's financial situation is so bad that a lender cannot be matched for a particular purpose, as long as the loan is secured.

Getting an approval is easy even if you have a history of bad credit or bankruptcy. Getting a poor credit secured loan actually quite easy if it is guaranteed by some sort of collateral, usually your home, which will be at risk if you fail to make repayments.

Lenders have begun to wake up to the fact that there are a number of potential customers who are seeking secured loans, but just simply have poor credit. Lenders and other sources who offer secured loans are realizing this and also the potential amount of business that people with poor credit have to offer. Poor credit secured loans are financial instruments that have been set up for exactly this purpose.

Poor credit secured loans can be used for various purposes. These can include home improvements or house extensions (which will increase the value of the property - this is the reason most preferred by the lender as it shores up the value of the equity). They can also be used for debt consolidation, holidays, school fees or that special occasion. Reasons for the loan are usually asked on the application form but the point is generally moot.

All loan applications are subject to quite strict criteria and a credit score specified by the loan provider. To make the loan more prompt, the lenders have now started to choose the online method of application. The Web makes the process of getting quotes easier for both borrower and lender.

Loans are secured on property, so before you make the commitment ensure that you can meet each monthly repayment without arrears for the duration of the loan agreement. As with all secured loans, if you cannot afford to meet the repayments for a reasonable length of time then your home may be at risk.

Applying for secured poor credit loans is quite easy. Applying online for poor credit secured loans can save you time in the application process and a lot of trouble as well. Applying online means that you can gather the necessary information more easily and that you can do it at a date and time that is convenient for you.

Most services have a free no obligation quote service and a competitive rate of interest. Fast quotes for poor credit secured loans are available on the Internet. In many cases it is usual for a four or five month repayment holiday to be arranged right at the start of the term. Shopping around can be worthwhile but can take a long time; going to a specialist broker gives you access to hundreds of these lenders while saving you the time and the legwork.

For people who may be looking for a cheaper alternative than a secured loan from their bank, Poor Credit Secured Loan Applications UK offers free, no obligation quotes from a large panel of lenders to ensure the best deal possible. Apply now for a 5 month payment holiday.

Payday and Cash Advance Loans - Private, Secure, Fast!

You may have heard about payday and cash advance loans in the past and thought that they weren't for you. Sure, you had financial emergencies, but you didn't want the whole world knowing you were having one! Concerns about privacy and anonymity have been some of the main reasons people haven't utilized cash advance services. They would rather do without than have to worry about other finding out they were using the services. If this sounds like you, there is good news - times have changed, and today the payday and cash advance loan industry is one of the most private, secure, and fast lenders out there!

Here's how it works. Let's say you have an unexpected expense. Maybe the washing machine decided to die in the middle of the rinse cycle or your oven decided it was tired of all the hot air. Whatever the reason, you need money fast. This is where the payday and cash advance loan industry comes into play. They are there to lend you the money you need for a short period of time, typically between 7 and 30 days. They make small loans, anywhere from $100 - $2000 dollars in most places, and are flexible in their repayment terms.

Modern cash advance services have put the customer first and you will find that you can complete much of your business from the comfort of your own house - how's that for privacy! Typically, many lenders nowadays have online sites where you can fill out the short loan application, tell them where to deposit the money and give them information on what repayment terms you would like. Usually within 24 hours the money is deposited straight into your account and nobody knows but you!

The payday loan industry has been one of the leaders in making sure that data is secure and safe. If you are getting a loan online, or in person, you can rest assured that they are using some of the most advanced data protection policies in the marketplace today. Most lenders pride themselves in the fact that they are audited as often as every day to test their data privacy standards on their websites and in their offices.

Cash advance lenders also realize that when you need money you usually need it fast. That is why they can in most cases have your money to you within 24 hours electronically, or in some cases offer the ability for you to stop by your local office and pick up the cash once you have filled out the paperwork online. By offering this flexibility they are ensuring that when an emergency strikes you aren't left out in the cold waiting for days - as is typical with some banks - for a decision or the money.

The payday and cash advance loan industry of today is far different from what you knew of in the past. They have changed their businesses to compete head on with banks in many areas. By offering innovative solutions for life's problems they have brought back dignity to the industry and are helping hundreds of thousands of people each month.

Susan Duey represents, Cash Advance Bid offering fast cash advance for your convenience deposited overnight to your account. For more information please visit Payday and Cash Advance Loans - Private, Secure, Fast!

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