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How well do you know your breakeven point?

New Post Most people are familiar with the concept of breaking even. Your breakeven point tells you how many units you need to sell or what dollar value in sales you need to achieve just to cover your costs. Once you know that, you know the point you need to pass to turn a profit.

Pretty easy right?

But a breakeven point isn't set in stone. It will shift as your business grows, costs fluctuate and as you continue to surf a constantly changing business environment.

Monitoring breakeven

A breakeven point therefore becomes something you keep in play over time as a tool for you to think about your sales, costs and pricing in a different way. 

For instance, say you know your breakeven point and you take it at face value. Tell your team. It's a powerful motivator for your sales people to know exactly what the numbers are to put the business in profit.

Say you don't accept your breakeven point at face value. What can you do? Can you reduce your costs to lower your breakeven point so you can start earning profit sooner? That might lead you into analysis of your fixed and variable costs to judge whether you have room to move.

Or does your breakeven point uncover an issue with your pricing that you need to deal with? Lifting your pricing might mean your numbers are into profit sooner but you might have to think about whether your market will tolerate that. Does that line of thought indicate that you simply have to lift your sales volume? And then you're looking at marketing strategies, market reach and coaching your team on what the sales goals really are.

If you're not sure you really have a handle on analysing your breakeven point, we're happy to talk through options which could increase your profit.

Do you have backup?

'Tis the season to … do some network housekeeping. What would you do if the unexpected happens while you're on the beach giving it some Christmas cheer? There's a blackout, your laptop is stolen from your car, or downloading someone's dancing turkey video has infected one or more computers on the network with a virus? A backup plan takes it from what could be an utter disaster to somewhere on the inconvenience scale. Read more…

Debtors and cashflow

Business is good. Customers love your products. You provide a superb service. So why is your cashflow trickling not gushing? You have analysed the numbers. Your overheads are reasonable and there's no wastage. But what about your debtors? Read more…

Who you going to call?

How often are you able to really work on your business, as opposed to working in it? Day to day demands can swamp the bigger picture. It can help put it all in perspective to call on a specialist so you can focus your energies on taking that next step up.

There are many advisory services out there. It can be confusing to try and sort through all the marketing to make sure you connect with someone who can really help. For instance, what's the difference between a business mentor and a business coach? And where do business advisors fit in? Or are they all just different names for the same animal? Read more…

Take a breath

One of the pitfalls many business owners face is getting caught up in doing everything IN the business and not spending any time ON it. It falls further and further down the list, so tasks pile up which could - if tackled - help the business grow. This, in turn, creates a great deal of stress. Read more…

Simple tools for home based businesses

If you're running a business from home, it's probably a juggling act. Administration, accounts and marketing are up to you, as well as ensuring the business is still providing the right level of service or product. Thankfully, there are some basic and inexpensive tools that you can use to make your job just that much easier. Read more…

Exit: stage right

We read a lot about the ageing population and its potential impact on the economy but what does it mean for small business?

In business, typically, it takes a lot of energy and planning to get started and a lot to keep going and keep growing. Very few business owners start a business with exit in mind. It seems completely counter-intuitive. You start with a dream and the tenacious passion to make it real and then you just want it to grow. But when do you start thinking realistically about what you want to happen when you retire?

For some, it's too hard to think about. Many business owners might talk about funding a lifestyle but actually work has been their lifestyle. Straight up, they'd rather go with their boots on. But then what happens to the business? Economically it's a waste – a waste of the business' assets, client base, employees; it's a waste of the dream and the hard work it took to make it real.

What's your plan? What do you want to see happen? How much money do you need to retire? How do you start even thinking about all this? Read more…

Closing the sale

You've put in all the hard work. You've marketed the product or service, established a relationship with your client and you've worked through the early negotiations.

Now, you have to seal the deal. Aside from the initial contact, this can often be the hardest step to take. It's about asking the big question and not being afraid to follow through.

Whether you're negotiating a large deal or something on a smaller scale, here are some pointers to help you see your client over the line. Read more…

Learning the art of referral business

Much like cold calling, asking for referrals can seem daunting. However unlike cold calling, referral business usually comes off the back of having done a good job for someone, so you're already on the front foot. The first step is asking for the referral. Before that you need the confidence to ask and, of course, to know how to ask for it and who to ask.  Read more…

Just Breathe - how to cope when the heat’s on

We've all heard the saying, 'the customer is always right.' Behind closed doors, this may not always be the case but as a business owner, manager or customer services representative, it's the number one rule you need to follow. By doing so, you can try to defuse a potentially tricky situation and, if you don't succeed, you can at least walk away with your head held high and your dignity intact. Read more…

Room to move

Even how much personal space you take up and how much space you accord to others sends a message. Read more…

Online video for your website or blog

If you're thinking of how you might refresh your website or pep up your blog posts, you might consider how videos can help. Video posts can help you engage customers. If you want to let people know about a new product, showing them how it works may work better for you than just telling them.

It's often difficult for people to take on information if it's in a purely text format. In the fast pace of the working week, they are time-poor and under fire from a continuous barrage of information. Read more…

The R words: relationships, rapport, retention

There is a saying that the best customers are the ones you already have. So once you've schmoozed and wooed someone into your client base, how do you go about keeping their business? Establishing trust and maintaining rapport in your business will be critical to building strong client relationships. Read more…

How do you know what to insure?

It's a bit of a Murphy's Law principle that businesses often don't really come to grips with their risk management plan (or the lack of one) till some random accident takes out a key manager or lead hand and it hits everyone what it will mean for the business.

No one can plan for everything but every business should have a sound grasp of the kinds of risks that might hit them hard. And every business should put strategies in place to minimise risk and deal with it, if the unthinkable happens. Read more…

Avoiding the January Blues

Many people kick start the New Year with a myriad of resolutions, from keeping fit to losing weight or achieving financial goals. However, many of those resolutions fail to embody anything remotely close to working life. The first week back is usually a slow one; clearing out the inbox (usually spam as most other people were also on break) dusting off the keyboard and restocking the cupboard with fresh new stationery.

So when your employees hit the deck with the January blues, here are some ideas to instil excitement and motivation. Read more…

Dialling for a dollar - Perfecting your cold call

Most of us loathe the sound of those two words, 'cold calling'. It can be labour intensive and takes a fair amount of courage. We worry that it can often be seen as annoying to the receiver, putting us at a disadvantage from the beginning. However, if you're willing to put in some effort, there are some top tips to help you to make cold calls effectively. Read more…

Meetings Matter

Meetings: scourge of the working day or a top way to make things happen? Go for the biggest outcome from the smallest window. Start with basics. Read more…

Working at peak in the home office

The washing pile is getting higher, the dishwasher light is flashing and the cat is crying for another bowl of milk.  Thoughts flick through your mind about the feasibility of doing some of the jobs now, leaving them until later or when exactly you might decide to knock off for the day.  These, along with a long line of others, are just some of the temptations that lure you to procrastinate when working from home.

Whether you work from home full or part time, there are some basic steps you can take to avoid these common pitfalls and ensure you keep your motivation and discipline on track.  Read more…

Facebook for Business - Reaching out with ease

You may already be running a Facebook business page and if not, chances are you're thinking about it.  Having a Facebook page for your business is a great way to maintain rapport with your clients, build a bigger audience and help raise awareness for your brand, product or service.  Read more…

Efficiency gains

When it comes to working efficiently, everyone has some idea of what works for them and what could work better.  As a business owner, you can get stuck and find yourself working harder than anyone else, for longer hours, without seeing that next level of growth in your business.  Here are some simple reminders to help you stay on task and get more done. Read more…

  • "McCoy & Co are a critical component to the success of our business. We rely heavily on the advice and support of Craig McCoy and his business advisory unit." Read more >>
    - John Plato - Managing Director - Plato Creative
  • "Craig & Bevan & the team at McCoy & Co have been a vital ingredient in the success of COP Ltd. Their value is not just in the timely accuracy of their accounting work..." Read more >>
    - Simon Chapman - Managing Director - Chainsaw and Outdoor Power
  • "I have used the services of McCoy & Co for the past 4 years and have found their accounting, tax and business acquisition advice exceptional." Read more >>
    - Rob Acutt - Managing Director - Triex Health Safety and Wellness
  • "McCoy & Co have played an instrumental part in the development of our transport group over the past ten years. Their advice has moved beyond that which you would normally expect from an accountant." Read more >>
    - Scott McAlister - Managing Director - Mackley Carriers
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