Break Even Point

[RealKidJoker]

Serious question here, but has anyone here worked out their break even point for their business or are planning on doing so?

 

[Eclipse]

It depends how much you have sunk into to starting up, and how much you earn obviously. If you're doing all trad work for instance you should break even in the first week unless you've gone whole hog on uniform, van, etc.

 

[RealKidJoker]

Ideally you should work out a break even point in your business plan before starting up. I've been working on this at college the past few weeks.

It doesn't matter if you have a lemonade stand, a restaurant or a window cleaning business, you can still work out how many houses you'd need to clean or how much you'd need to earn to break even from only a couple of figures.

This is the reason why a lot of businesses go bust shortly after starting up. They think they're making a profit straight away but aren't taking into consideration fixed and variable costs.

I agree that a trad window cleaners break even point would be slightly quicker than a WFP cleaner. This business management course is standing me in good stead for next year to hopefully start up.

 

[nearlyclean]

There are a lot variables to get to the break even point. But basically you need total gross and out goings. Mate use to say he works Monday for the tax man (20% ). Tuesday morning would be to pay for fuel and insurance and other costs. Then the rest of the week is yours. A bit simply but it is a good model that can be scaled up.

 

[bluemonkey]

I once worked out that if I employed someone it would cost me £3.23 a house to clean this was them in a van of mine

 

[spruce]

My cost per house in expenses, ie., fuel, insurances, water and water purification, van depreciation etc etc without wages is just under £4.00.

This isn't the full picture though, as the cost per clean without wages is just over 40% of gross.

 

[OoO]

I worked out my costs for the year and the i worked out what each house needs to be. Was quite a shock actually.

 

[RealKidJoker]

I take it you were under charging yeah? Obviously most window cleaners won't have a business premises on top of their house to include any fixed costs, and most peoples business phone number will be their home/mobile I presume so that's another plus. So including your rent/mortgage, telephone bills, gas and electricity in any fixed and variable costs when working out your break even point should be a big help to making a profit each month.

 

[OoO]

We live in quite a decent area so not undercharging. But I am glad we set our minimum at £10 6 months ago. Which is now going to be £12 in jan 2014 /emoticons/smile.png

 

[nearlyclean]

Does anyone take into account the time spent collecting, banking cheques and even going to do quotes. This all time that your not actually earning but spending money on fuel etc to do these things. When you start to examine it all it is quite surprising how much we need to break even. It is good ammo to have when a customer thinks you cleaned their house to quiclkly for the amount you are charging. I had one like that and would pay me by cheque which I had to take to the bank in my time, I asked her to pay the cheque in for me and offered to give her a paying slip. Very interesting conversation that ended very quick.

 

[Eclipse]

I don't collect, and I always do quotes whilst I'm out working. Just increased our minimum charge to £10 too, our average across our customer base is now £14.