Calculating Weekly Break-Even Sales
Mark S. Elliott has spent 25 years working in various management roles within the tenanted and leased divisions of the UK's largest breweries and pub companies. His extensive knowledge and day-to-day involvement with pubs and publicans make him well qualified to know what is required to run a successful pub. He shares his knowledge and many 'insider tips' with you in this book. Mark is based in Cockermouth, Cumbria.
CALCULATING WEEKLY BREAK-EVEN SALES
It is important for you to know the level of sales you require to break even. Break-even is reached when your sales revenue equals your running costs. If your sales revenue is less than your running costs, you are making a loss; if your sales revenue exceeds your running costs you are making profit.
You should work out the value of weekly sales you require in order to break even at your forecasted weekly running costs. The first step in doing this is to estimate your weekly running costs, establish your overall gross profit percentage (GP%), and then follow the steps explained below.
Calculating weekly sales required to break even
Weekly break-even sales are calculated as follows:
Weekly running costs divided by GP(%) multiplied by 100 = weekly breakeven sales (ex VAT).
Then multiply by 1.175 (to add VAT) to give weekly sales including VAT required to break even.
