Suppose you create goods/services or just sit around in the office. You at least want to break-even. You have your targeted net income, and nothing can take you off the path of glory.

But – there are some roadblocks ahead, and you need a tool to help you navigate those salty waters. In this case, you will need one of our break-even analysis templates to keep track of everything that is going on in your company.

Using our break-even spreadsheet, you will see how many units were sold, what is your net profit and if you need to borrow money because recurring costs can kill every business owner.

In this article, we will go over why such an addition is necessary for modern business and how to improve when it comes to clocking some of the expenses you have probably made in advance.

So, if you want to keep your business afloat and have everything under control – check out our breakdown of the break-even analysis. Let us dive into the topic, then.

But before that, let’s select the software we will use when creating a break-even analysis.

To create a well-structured break-even analysis, you need software that will help you with the most basic elements, like sales volume and calculating substractions. As multiple factors influence how the business runs, each little detail counts.

So, to combat that complexity, you need software that can do multiple things at once. You need a powerful tool to get everything under your control. The best way to go about it is to create a space where you can change every single element, and it will influence the whole equation.

In that case, there can only be one option - Microsoft Excel. It is the single most powerful tool for all your office needs. And for a reason. It can not only create an interactive spreadsheet that you can freely modify. It is also a well-established software that has been spread all around the world.

Additionally, it’s accessible at a budget-friendly price now. You can find various versions of Microsoft Office for an affordable price.

Let’s review some of the free templates we’ve prepared for you and see which will suit you best.

Break Even Analysis Template #1

Well, there is a lot of data to process here. Introducing – the Magnum! It is the single best and one of the most advanced templates ever created. You will not only break even, but you can even break yourself with this amount of details. 

The sheer amount of data you can put in this template is astonishing. It is one of the more advanced ones ever, but on the other hand - there is a reason for that. Even small busineses have a lot of paperwork, receipts, and taxes to put into break-even analysis, so it is only valid that the template will show that as well.

You can download this template for free at TemplateLab.com.

Break-Even Analysis Template #2

And here we have something completely different. Straight from Microsoft’s lab comes the most basic break-even analysis template ever created. It’s basic. It’s full of pretty understandable things. It’s just the perfect template to have some basic knowledge of what is going on with the company.

We recommend this one to everyone who wants an overview of what is going on in the company and feels like they have a finger on the pulse. 

You can download this template for free at Templates.Office.com.

Break-Even Analysis Template #3

The last template on our list is something in between. It is not your problematic everyday template where everything seems too hard to understand. It is also different from the basic template we have seen in the previous example.

It is something for everyone in the middle, which is most people. You will be able to put enough data, making it sensible to use, without being overwhelmed with row after row of information. It is a perfect template for most cases, so we recommend it.

You can download this template for free at SmartSheet.com.

So, now that we know what kind of software is right for this job, let us go ahead and see what the fuss is about. 

Break-even analysis, in the most basic understanding, is just the number. Usually, a zero. Why is that? To break even means that the total amount of costs was equal to the total amount of sales. Some people also define it as when the investment starts to give back to the investor. It would be called a break-even point, and we will discuss it in more detail in just a minute.

Some people also use break-even analysis to see how long the investment will take to pay off. It will be a part of a bigger business plan. You will see all the sales required to come out on top and be able to reinvest or sell the business.

Break Even Point

The break-even point is one of the critical elements in calculating if a business can stay afloat. It is also great to point to when thinking about creating a new element of your company or even franchising. You can pinpoint this particular moment when the business or a specific line of business will become profitable.

Two other definitions you need to know are Total Cost and Total Revenue. Total Cost is how much money and resources were invested in the business. Total Revenue is the total amount of profit that the business brought.

To calculate the break-even point, BEP, you need to use a Cost-Volume-Profit model. 

Physical Units Problem

You may have already noticed the issue if you are a business-savvy person calculating the BEP regarding physical units. You can’t just add them all up and see if it stands against money.

Well, there is a way to accomplish that task. You need to multiply all the units sold by the price and subtract all the expenses like taxes, production, human resources, etc. That way, you can calculate the profit margin on each unit sold.

Whether you run a small business or have a big corporation, one thing remains the same - you need to break even.

Breaking even is a long and windy road that will make you feel better or worse at some points, but in the end - we hope it will be a great pleasure for you. We know it is not some basic equation that will make your business smoothly without problems. There are multiple factors to take into consideration for sure.

The main takeaway from all of this is that if you want to have a successful business, you need to implement all the tools you have at your disposal, even if it means that some of them could be a little hard to understand at first.