There are those who believe that one can forecast and/or calculate break-even (B/E) through accounting software. True! It can be done but one would have to really know and understand accounting. It is much easier for many to do it using mathematical formulae, formulae as highlighted in this book . For any small business, the owner/manager MUST know and predict what sales volume that one must achieve to reach the break-even point, and then proceed to build a profit. If one is in the early stages of building a new business, one should be able to assess one’s early predictions of costs, volumes of sales and expected profits to be able to monitor oneself and to keep one focused and on track. Calculating B/E keeps one very focused on profitability with good information for business decision-making.

Break-even analysis is a tool that should be used by entrepreneurs even before they write up a business plan for a new business or for the addition of a new product or service. If entrepreneurs find out that sales required to break-even seems to be an unattainable number, take heart in the fact that one has found out before one invests one’s own or someone else’s money in a losing venture. Because of the failure to establish a reasonable B/E point, many entrepreneurs proceed with a business idea that should have been scrapped. There are many products and/or services that create excellent profitability. B/E remains very important as B/E offers owners/managers useful information to make profitable business decisions.