Breakeven point?

OU812

Would be interested in hearing from those lucky enough to be running their own businesses successfully, at what point did they break-even from startup.

Am currently doing projections & have my break-even point at about 20 months, which seem squire far out, but there are a lot of startup/ongoing costs.

Also, did you plan for/pay yourself a salary from the start ?

Thanks in advance.

Peterdalkey

The breakeven point for each start up will be defined by a huge range of factors and it highly unlikely that any two enterprises would have the same numbers and thus the same breakeven point. It is your numbers and your ability to deliver them that will be the deciding factors.

Most start-ups wisely seek to minimize owners drawings by setting aside "living" money until cash flow from trading can sustain them. While reaching breakeven and profitability is of course vital for longer term survival, mortality from lack of cash-flow is the greatest danger. It is critical from the get go and thus should be the primary focus.

jimmii

I set aside 6 months worth of living expenses at the start I would suggest that as an absolute minimum and ideally you would wants a years worth so you can reinvest any "profits" back into the business. The break even point is an impossible thing to come up with really your cash flow is going (hopefully) increase at an unpredictable rate. I would think that for a low cost start-up (<€50k) and that then goes on to successfully trade for 5+ years then 20 months is probably quite close to the average but its going to vary massively depending on which industry its in. Its not really a number I would worry about too much to be honest be more concerned with how long it takes you to trade at a sustainable operating profit.