Break Even

Break Even-

Break-even is a point in a business venture when the profits are equal to the costs.

Benefits-

• Relatively simple concept and the formula can be understood and used by most entrpreneurs
• The information provided can be vital when taking a decision whether to go ahead by most entrepreneurs
• It is widely used to support applications from entrepreneurs for loans
• It can be quickly adapted to allow for many 'what if' situtations to be considered and compared. This reinforces the usefulness of the technique for decision-making.

Drawbacks-

• It assumes that all output produced is sold.
• It oversimplifies business situations
• Many firms sell more…