Is when: Total cumulative
revenue – total cumulative expenses = Zero
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At the start of every
business, from the point of value creation, you are bleeding money without any
revenue. Then after a while after launching, you start to gain some revenue,
but the monthly income is still below the costs.
-
Then you reach the point where
the cumulative revenue from the business = the cumulative costs you pay to keep
the business running to that point of time
That is your breakeven point, the point after
which you start (cumulatively) making profits
-
Reaching the breakeven point
is not a goal in itself. The most important thing about reaching breakeven
point is that
-
After this point, you start to
feel that you world is paying back the favor :)
-
You will enter a complete
different zone of being comfortable that your business is actually wanted and
desired by customers
-
And the most important: You
will start aiming to achieve sufficiency; the real indicator of a successful
self-sufficient business and a successful you AT LAST :)
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