A break-even spreadsheet
By Christine Selvig • Bankrate.com

If you're like most small-business owners, your No. 1 goal is to make money. But sometimes it's hard to know when you've crossed the imaginary line that divides expenses and profits.

The break-even analysis is a great tool for determining how much money you have to bring in to cover your costs. Before you can find your break-even point, you need to know three things:

• What you will charge for that product.
• Your variable expenses, expressed as a per-unit cost. In other words, how much it costs to produce a single unit of your product.
• Your total fixed expenses. These are the costs such as administrative salaries and rent that will be paid whether or not you produce anything.

When you enter these numbers into our Excel spreadsheet, it will calculate the number of units you need to sell just to cover your expenses -- your break-even point.

How to use the spreadsheet
Enter your information in the cells highlighted in yellow.

1. Enter your selling price. If you're considering a price increase, you can enter either the old price or your new one and see how it affects your break-even point.
2. Enter your variable expenses per unit.
3. Enter the total amount of your fixed expenses.

The difference between the sales price of your product and the variable costs involved in making it is called the contribution margin.

The point at which the total contribution margin from all of your sales matches your fixed expenses is your break-even point. The spreadsheet determines the total number of units you need to sell to break even by dividing total fixed expenses by the contribution margin.

For example, if your fixed expenses add up to $120,000 and the contribution margin on your product is $6, you will need to sell 20,000 units to break even.

To download our break-even spreadsheet, click here. The file is in Excel 97 template format for PCs. If you use Excel and want to keep it as a template, save the file in your template folder by opening the file from Excel, then click "file," click "save as" and change the file type to template.

If you have a relatively new browser, you can use the spreadsheet -- even if you don't have the Excel spreadsheet program. In Internet Explorer 4.0 or higher, clicking on the link will cause the file to open within the browser. In Netscape 4.0 or higher, select "Open it" and "Open OLE server in-place" to run the template within the browser, then double-click to activate the worksheet.

-- Posted: April 14, 2000