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- Business Planning and Breakeven Point (BEP) Calculation
Business Planning and Breakeven Point (BEP) Calculation
- Two major expenses involved in any business
- Capital Expenses: Fixed costs, which include licensing fees, infrastructure cost, etc.
- Operational Expenses: Variable costs, which include rentals, staff salary, bills, stationery, marketing, etc.
- Sales, in the context of a center offering test-prep programs, are defined as:
(no. of enrollments) X (fees collected per enrollment)
- Breakeven Point (BEP) is reached when Sales = Fixed costs + Variable Costs. Any sale beyond the BEP contributes to net profit
- To reach BEP quicker:
- Minimalize your operational expenses
- Have clarity on how many students to enroll and at what fees
- Add new/additional programs to the existing one(s)