7. Breakeven Analysis 7.1 Break Even Analysis Spreadsheet
The break even worksheet sheet is a helpful tool to use to strategically determine the revenue needed to add another fixed expense, adding an office position. Once the worksheet has been filled in with the appropriate information, you will be able to see the revenue needed to cover the cost of adding another position to your office team.
7.2 How to Use the Spreadsheet
Download the break even calculation sheet by going to the team website/convention archive/2006/workshops/breakeven analysis/blank breakeven analysis spreadsheet. You will also need your profit and loss statement for the period you are analyzing and a pink and yellow highlighter. Below you will find a sample spreadsheet, however, you will need to use the excel version as this sheet does not have the formulas. Begin by filling in the Number of weeks you have chosen to analyze. Next review your expense categories from your profit and loss statement. In pink, highlight your Fixed Cost/Expenses- rent, office supplies, advertising, salaries (office staff), utilities, interest expense, some insurances, auto acquisition (depreciation or lease payment). Now highlight in yellow your Variable Costs/Expenses- HSP labor, cleaning supplies, royalties, some insurance, auto expenses (operating only). After you have highlighted your variable and fixed costs, enter the data under the appropriate columns. Then enter your total sales for the number of weeks analyzed. The spreadsheet will do the calculations for you. Once you have completed your break even analysis, locate the Expenditure Decision Formula box found at the lower left hand corner of the worksheet. Enter the dollar amount needed of the proposed expenditure. You may annualize this number or enter your variable cost percent and the number for your contribution margin. The spreadsheet will calculate the revenue needed to break even on the cost of your proposed expenditure.
In this example: in order to add a CSR, at $500 per week, you would need to increase your weekly revenue by $1,446.
MOLLY MAID Office Infrastructure Manual Copyright 2015, Molly Maid, Inc.
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