Marketing Break Even Analysis

Break-Even Analysis
[ Page 56 of Instant Sales by Bradley J. Sugars ]

It's essential that you work out your costs up front. Otherwise, you'll have no idea what you need to achieve in order for the process to be worthwhile. You may find out after doing the analysis that the process costs you so much that it's not worth the trouble.

This analysis is for the whole campaign. After you've worked out your total fixed costs (for the campaign), you then work out your profit (your average dollar sale minus your variable costs), which gives you enough information to work out how many responses you need in order to break even.

Divide this number by the total number of prospects you are planning to approach. This will give you a percentage response rate. As a very rough guide (every case is different), anything over 40 percent is stretching it. If you need that high a response, you might need to rethink your campaign. The very best businesses get around 40 percent. These are rare results. If you need higher than that to break even, reassess whether this is the best marketing method for you.

Note:All numbers are total dollar amounts for chosen period. ENTER NUMBERS ONLY

Activity Direct Costs
Advertising
Envelopes
Paper
Printing
Postage
Other
Total		$ 0.00
Average Sales
Average Sale-per item
Variable Costs
Purchase Price-per item
Packaging-per item
Transportation-per item
Total-per item		$ 0.00
Variable Costs
Telephone
Wages
Electricity
Rent
Insurance
Stationery
Other
Total Cost		$ 0.00
Total Variable Costs Per ItemNet profit = Your average sale divided by the sum of your total variables cost and total delivery costs.
Total Net Profit Per Item Net profit = Your average sale divided by the sum of your total variables cost and total delivery costs.		$ 0.00
Items to Sell to Break Even.Number of Items to Sell to Break Even.		0