Break-Even Analysis

Break-even analysis has been very useful to me throughout my career. “Break even” is usually defined as where revenue equals cost, so profit is zero. It’s a way to simplify a complex decision to a simple “yes/no” question. This can help people stuck in “analysis paralysis” and helps groups come to a decision more quickly.

In this video, I apply break-even analysis to the decision of whether to open a new location to show how it can help you make better decisions. In this video, I’ll:

  • Explain when break-even analysis is most useful in decision-making.
  • Show how break-even analysis can test the most uncertain assumptions in a decision.
  • Present how to find the break-even point.

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