Ideas for Success -
Break Even Point

"You have to know what you want to get."

Gertrude Stein

it's Time for Math!

If you are going to do ANY sort of pre-order fundraiser you MUST know what your break even point is.. it's more important than profit because if your fundraiser falls flat on it's head you don't want to lose money.

Break even point is where you earn enough money to pay off your inventory.
(in accounting terms it's where cost equals revenue)

Lets say you are interested in doing a candy sale fundraiser. To make it easy - let's say the candy cost you $50 cents a bar and you sell it at $1.00 a bar. If you buy four bars to sell you start making money on candy when you sell bar #3. For example: Four bars would cost you $2.00 (.50cents each) - if you sell one you've taken in $1.00, if you sell two you've taken in $2.00 (that's your break even point because you can pay off your bill) if you sell three candy bars you've taken in $3.00, if you sell all four then you've taken in $4.00. If we take $4.00 less your initial cost of $2.00 - your profit is $2.00!

So in our candy example, if you buy 10 cases to sell - you have to sell 5 cases to break even!

Again, you have to know what your break even point is to evaluate whether or not it's a good fundraiser for your group! Copyright @2012