{"id":2900,"date":"2023-02-22T21:42:41","date_gmt":"2023-02-22T21:42:41","guid":{"rendered":"https:\/\/course.oeru.org\/ient103\/?page_id=2900"},"modified":"2023-02-22T21:42:41","modified_gmt":"2023-02-22T21:42:41","slug":"break-even","status":"publish","type":"page","link":"https:\/\/course.oeru.org\/ient103\/learning-pathways\/valuing-a-new-start-up\/break-even\/","title":{"rendered":"Break-even"},"content":{"rendered":"<div id=\"content\" class=\"mw-body container\" role=\"main\">\n<div class=\"row\">\n<div class=\"col-md-12\">\n<div class=\"panel\">\n<div class=\"panel-body\">\n<div id=\"bodyContent\">\n<div id=\"mw-content-text\" lang=\"en\" dir=\"ltr\" class=\"mw-content-ltr\">\n<div class=\"floatright\"><a href=\"https:\/\/wikieducator.org\/File:Simple_balance_scales-02.jpg\" class=\"image\"><img loading=\"lazy\" decoding=\"async\" alt=\"Simple balance scales-02.jpg\" src=\"\/\/wikieducator.org\/images\/thumb\/9\/90\/Simple_balance_scales-02.jpg\/320px-Simple_balance_scales-02.jpg\" width=\"320\" height=\"227\" class=\"img-responsive\"><\/a><\/div>\n<p>Generally speaking, the value of a business is based on its future profit potential. <\/p>\n<p>The pre-seed funding stage commences with your idea for a new business, and with initial funding for the entrepreneur to progress a working prototype or <a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/en.wikipedia.org\/wiki\/Minimum_viable_product\">minimum viable product<\/a>. The objective of this phase is to achieve the <b>break-even point<\/b>, that is, the point where a business starts to make a profit. It is important, then, for you to\n<\/p>\n<ul>\n<li> know how to calculate the break-even point, and\n<\/li>\n<li> consider how long it might take to achieve this milestone for your planning.<br style=\"clear:both;\">\n<\/li>\n<\/ul>\n<div class=\"panel iDevice\">\n\t<div class=\"panel-heading idevice-heading\">\n\t\t<div>\n\t\t\t<img decoding=\"async\" class=\"pedagogicalicon\" alt=\"definitions\" src=\"https:\/\/course.oeru.org\/ient103\/wp-content\/themes\/oeru_course\/idevices\/Icon_define.png\">\n\t\t<\/div>\n\t\t<div>\n\t\t\t<h2>Definitions<\/h2>\n\t\t<\/div>\n\t<\/div>\n\t<div class=\"panel-body\">\n\t\t<div class=\"col-md-12\">\n\t\t\t<\/p>\n<dl>\n<dt>Break-even point\n<\/dt>\n<dd>The break-even point is the production or operational level at which total revenue is equal to total expenses. In other words, you do not make a profit or a loss, but you <i>break even<\/i>.\n<\/dd>\n<dt>Fixed Costs\n<\/dt>\n<dd>These are expenses that are not dependent on the amount of goods or services produced by the business. Examples include rent and insurance.\n<\/dd>\n<dt>Variable Costs\n<\/dt>\n<dd>These are costs that are volume-related (such as the cost of raw materials), and are paid per quantity or unit produced.\n<\/dd>\n<\/dl>\n<p>\n<\/p>\n<p>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<p>\n<\/p>\n<div class=\"panel iDevice\">\n\t<div class=\"panel-heading idevice-heading\">\n\t\t<div>\n\t\t\t<img decoding=\"async\" class=\"pedagogicalicon\" alt=\"reading\" src=\"https:\/\/course.oeru.org\/ient103\/wp-content\/themes\/oeru_course\/idevices\/Icon_reading.png\">\n\t\t<\/div>\n\t\t<div>\n\t\t\t<h2>Reading<\/h2>\n\t\t<\/div>\n\t<\/div>\n\t<div class=\"panel-body\">\n\t\t<div class=\"col-md-12\">\n\t\t\t<\/p>\n<p>Read the following section of the <i>Introduction to Business<\/i> course published by Lumen Learning:\n<\/p>\n<ul>\n<li> Lumen Learning. (n.d.). <a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/courses.lumenlearning.com\/wmopen-introductiontobusiness\/chapter\/introduction-to-the-break-even-point\/\">The Break-Even Point<\/a>\n<\/li>\n<\/ul>\n<p><b>Tasks<\/b><br \/>\nUsing the outputs from the <a href=\"\/ient103\/learning-pathways\/understanding-financial-statements\/start-financial-statements-learning-challenge\" title=\"Introduction to entrepreneurship\/IENT103\/Statements\/Start\">financial statements learning challenge<\/a>:\n<\/p>\n<ul>\n<li> Estimate the break-even point for your start-up business, i.e how many units or services you will need to sell to break even.\n<\/li>\n<li> Estimate how long it will take for your start-up to break even.\n<\/li>\n<\/ul>\n<p>\n<\/p>\n<p>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<p>\n<\/p>\n<div class=\"panel iDevice\">\n\t<div class=\"panel-heading idevice-heading\">\n\t\t<div>\n\t\t\t<img decoding=\"async\" class=\"pedagogicalicon\" alt=\"reflection\" src=\"https:\/\/course.oeru.org\/ient103\/wp-content\/themes\/oeru_course\/idevices\/Icon_reflection.png\">\n\t\t<\/div>\n\t\t<div>\n\t\t\t<h2>Reflection<\/h2>\n\t\t<\/div>\n\t<\/div>\n\t<div class=\"panel-body\">\n\t\t<div class=\"col-md-12\">\n\t\t\t<\/p>\n<p>In your <b>learning journal blog<\/b>, write a short reflection (200-250 words) on what you have learned about the break-even point, and why it is important for entrepreneurs to consider. For example, what is the main purpose of conducting a break-even analysis? What would happen to your break-even point if your fixed costs were to increase?\n<\/p>\n<ol>\n<li> Remember to tag or label your post using the course code: IENT103 (This is needed to harvest a link to your blog post in the course feed.)\n<\/li>\n<\/ol>\n<p>\n<\/p>\n<p>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<p><!-- \nNewPP limit report\nCPU time usage: 0.178 seconds\nReal time usage: 1.086 seconds\nPreprocessor visited node count: 321\/1000000\nPreprocessor generated node count: 928\/1000000\nPost\u2010expand include size: 7909\/2097152 bytes\nTemplate argument size: 3376\/2097152 bytes\nHighest expansion depth: 7\/40\nExpensive parser function count: 0\/100\n--><\/p>\n<p><!-- Saved in parser cache with key we_en-mw_:pcache:idhash:184750-0!*!0!*!*!2!* and timestamp 20230222214240 and revision id 1060942\n -->\n<\/div>\n<div class=\"visualClear\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"row\">\n<div class=\"col-md-12\">\n<ul class=\"pager\">\n<li class=\"previous\">\n            <a href=\"\/ient103\/learning-pathways\/valuing-a-new-start-up\/start-up-financing-stages\">\u2190 Previous<\/a>\n          <\/li>\n<li class=\"next\">\n            <a href=\"\/ient103\/learning-pathways\/valuing-a-new-start-up\/basics-of-vc-valuation\">Next \u2192<\/a>\n          <\/li>\n<\/ul><\/div>\n<\/p><\/div>\n<div id=\"wenote-ids\"><script type='text\/javascript' id='wenotes-ids'>\n    var WEnotesSite = \"https:\/\/wikieducator.org\";\n    var WEnotesPath = \"\/Introduction_to_entrepreneurship\/IENT103\/Valuing\/Break-even\";\n    var WEnotesSiteID = \"0e3d258fbd36841f92259eefcd41d5e9\";\n    var WEnotesPathID = \"9c5efc5593afa55221a16e7c1acd7a49\";\n    var WEnotesIDs = { site: \"https:\/\/wikieducator.org\", path: \"\/Introduction_to_entrepreneurship\/IENT103\/Valuing\/Break-even\", site_id: \"0e3d258fbd36841f92259eefcd41d5e9\", path_id: \"9c5efc5593afa55221a16e7c1acd7a49\" };\n<\/script><\/div>\n<\/div>\n<footer><\/footer>\n","protected":false},"excerpt":{"rendered":"<p>Generally speaking, the value of a business is based on its future profit potential. The pre-seed funding stage commences with your idea for a new business, and with initial funding for the entrepreneur to progress a working prototype or minimum viable product. The objective of this phase is to achieve the break-even point, that is, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":2892,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-2900","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/pages\/2900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/comments?post=2900"}],"version-history":[{"count":1,"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/pages\/2900\/revisions"}],"predecessor-version":[{"id":2901,"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/pages\/2900\/revisions\/2901"}],"up":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/pages\/2892"}],"wp:attachment":[{"href":"https:\/\/course.oeru.org\/ient103\/wp-json\/wp\/v2\/media?parent=2900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}