The level of sales or revenue at which total costs equal total revenue, resulting in neither profit nor loss.
The Break-Even Point is a vital financial metric for small business owners that indicates the level of sales or revenue required to cover all costs and expenses, resulting in neither profit nor loss. It represents the point where total revenue equals total costs, including fixed and variable costs. Knowing the Break-Even Point helps businesses assess their profitability and make informed decisions regarding pricing, production volume, and cost management. By understanding this key milestone, small business owners can plan their sales targets, set pricing strategies, and optimize their operations to achieve profitability and long-term success.