Break-Even Point analysis is essential. It tells you what is the minimum number of units that must be produced to start turning a profit.
- Production Above the Break-Even point, you are creating wealth for your family.
- Production Below the Break-Even point, you are ultimately reducing the wealth and digging yourself a hole.
Your Fixed Costs per Unit
These are costs that will remain the same no matter how many units you produce. Land and Buildings are some examples.
Your Variable Costs per Unit
These are costs that fluctuate with the number of units you produce. The more units you produce, the most variable costs that you will incur.
