Guest Writer: Greg Grimaud "Do you know where your breakeven is?"

In our monthly franchisee meetings we always cover the breakeven graph and discuss it’s truth’s. Point “B” on the graph is the place where all your dreams start to become possible. You’ve paid off your fixed expenses for the month such as that annoying rent payment, factored in your parts cost and other variables, and now you are poised to take home some cash for every dollar above point “B” that you bring in.

Only one problem, you have no idea what that dollar amount is. Not knowing what this number is, is the equivalent of going duck hunting blindfolded and expecting a bird to fall out of the sky. Like Jim Carrey said in the movie “Dumb and Dumber” when he asked the girl, “what are my chances of going out with you?” Her response was, “not good… …one in a million.” His response, “so you’re saying there’s a chance!”

This is not the kind of chance that you want to risk your entire business on. You can greatly improve your odds of success by not guessing on issues like not knowing your breakeven.
Knowing where your breakeven is, is knowing when you’re making money or losing money. It’s the day in the week when momentum changes. Because my partner and I know where our breakeven is, we know at which point we begin making money. I’ll talk about this more next week, but in the meantime, take a look at the graph below. — Greg Grimaud