When creating a new product, it is important to understand where the breakeven point will be. Any new product is an investment in future profits, but initially will cost a company money and effort. Knowing where the breakeven point is located is vital to understanding the point at which a product is no longer an investment and becomes profitable. A wise company uses a free customizable breakeven analysis template to calculate the breakeven point for a new product.
Customization allows a company to quickly calculate and analyze the information it needs. Whether starting a new company, or creating a new product for an established company, the breakeven analysis template will provide a key piece of information needed to plan for the future.
How to Use the Breakeven Analysis Template for Microsoft Excel
The free, easy to use breakeven analysis template can be downloaded right from this page. Once downloaded, enter in the company name and product information and save the file. Next, fill in all expense categories as well as the sales price per unit and the sales volume. The light grey table along the bottom of the template will adjust for several increments up to the specified sales volume. The numbers at the bottom of the table will reflect the profits or losses for each increment. The incremental breakdown will save time and pinpoint exactly where the breakeven point is located. Save the completed form as a new file.
Tips for Using the Breakeven Analysis Template for Microsoft Excel
- First, customize the category names or add expense categories to suit the company. Put pertinent product information, links, or photos in a notes section to distinguish one breakeven analysis from another.
- Second, use the template before production by entering a projected sales volume and costs. Use the same information later with actual recorded sales volumes and costs to compare and adjust for the future. Knowing how accurate initial projections are is valuable to a growing company.
- Third, save the file in one or more safe locations. Even print out a hard copy. The information in the breakeven analysis template will be useful for tracking the progress of a product once launched.
Download: Breakeven Analysis Template
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