yoyoyo wheeze backing by wheeze I mean CPA strengthen my DC Engler click you
know what it is you know what's up we back I am CPA shrink I was trying to
slice and CJ in the state of Florida I educate motivate and inspire people all
over the world by teaching them accounting building block by building
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my classic series it's the classics boy I exist like the first series bigger to
be like CVI strength was I was his classic series he's going to do his
thousands video you know can't believe it
this is break-even point you you you we're going to learn no break your boy
means chill dog just chill okay because we're going to do all to break even now
this is actually like a real life a real a real real life video what do you sell
out your what do you sell in your business how many of those do you have
to sell to break even how many of those do you have to sell to make some money
so this is break-even point it's very important it I don't know I love I just
love it I'm always I was always like what's the break-even point or you know
how much to actor maker this is that or I just love it
also we're going to break it down a little you know a little like how how
how I think about it because you can just google search this you know or your
YouTube in it but I'm going to go how I think about it and I think so
you know tends to get over complicated some people tend to over complicate
things the break-even point let's just get into it okay what the break-even
point is is okay how many break-even point is how do I break even when do my
revenues equal my costs that's the break-even point you know I'm selling
widgets we're selling tax returns here you know
that's what makes sense to me what it what makes sense that you could sell you
know what have you sold in the past just it could be anything you know you have
to tell anybody you know doesn't have to be legal doesn't that mediate legal does
that be real this is great it's imaginative you're saying who who
says accountants are fun and don't have imaginative right I'm very imaginative
doesn't have imaginative what the work dog do um
so it's real its revenue is equal in your costs
that's what breakeven is you know I sell tax returns for $200 or I sell a widget
for $200 whatever it might be I have costs associated with selling
this this tax return of this widget right and that's what that's what
businesses that's why every business is around except maybe a non-profit so the
people nonprofits make money but let's get it let's get past that right
the nun probably didn't make any money but the guy the guy working at the
nonprofit made a million dollars okie okay it seems legit AF right here in it
to make money well how do you make money that's what you got coming in where as
what you got going out right in versus out so your sales is what's coming in
your cost is what's going out so we want to find out when coming in coming out
equals like how many how many items we'll have to sell
before I you know I break even so I got to do that so I'm not losing money
revenue is equal cost think about that just think about that you can have you
have kind of a like an algebraic algebraic term
I mean if it's easy for you you can solve for this you know doing algebra or
over but this because because there's like I couldn't do tech side field Texas
I think three times like I barely passed business calculus at algebra I just
don't like letters and the numbers it just I just don't understand it and but
if this is you like if this is you then you solve for this if you have to break
even because now let's just we're just basically extrapolating the the revenue
is equal cost to you the break-even point revenues and purple over here $200
sales right / / it matters how many per per capita or per widget so we can so
over here when we get when we get our break-even point in units right which is
you know we can plug it in to our algebraic expression later on that's
what I would do I would plug it back into this to see if it was correct or
not that's $200 times how many units is our revenues
equals our costs right revenues equal cost for breakeven I think that so self
exponents were right if it's it's even whatever's on the side equals this side
up they even break even because we're going to break even
right I hope that's fair so what are our costs well our fixed see
our fixed are 600 so that's never going to change depending on how many units we
sell or we don't but but the variable cost do matter how many units we sell or
don't sell so that's why there's an X right here for the variable could $50
for variable and 600 ollars for fixed so there's our revenues equal costs there's
it's kind of out an algebraic expression but $200 times how many units that's our
sales equals $50 variable cost times how many units we sell Plus $600 and six
cause the how you get the break-even point what what it is what is the
break-even point it's fixed costs over the contribution margin right now that's
the break-even point it so if you get you know you had a question on a test or
whatever what's to break-even point you've got to been doing enough of these
I should say fixed costs over a contribution margin that's the
break-even point you know that's another way of doing it you don't know what that
is you can have fixed costs over sales minus variable cost you know you can
have it next to D siedler on your sheet if you did if you did that fixed costs
over contribution margin and what is what is the contribution see I just
think I'm just going to think about logically really I don't really even
know this formula for the break-even point I would just figure it out I guess
intuitively because all I did have a great even
point for my business when I open it up I'm like how many how much tax returns
are have to sell how much how much how much bookkeeping do I have to do how
much payroll do I have to do to keep the doors open but if you use this if you
use this I'm lost are going to know what to call the form of the formula for
break-even point six cost over contribution margin and contribution
margin of sales minus variable cost so break-even point is fixed costs over
sales minus variable costs and let's let's think about why that's important
and why let's just look at let's just look at these let's just look at this
the sales the variable on the fixed for a second okay oh and this is what I
always do I always kind of break it down into
something small where I can see and the formula the formula will work for these
numbers as well as millions and the off numbers that you can't conceptualize in
your head break-even point you might you might forget the formula but anyways
you're going to say hmm how do I break even
well I sell tax return for $200 but it cost me $50 in tax software to do it so
I make $150 profit per tax return that I sell all right and see that takes care
of my variable costs in it and that's why contribution margin is so nice
because it takes care of these X's and in the algebraic form so anyways I have
if I sell one if I saw one tax return I'm going to make $150 off that tax
return yeah and per tax return or make $150 now what do I have to cover I have
to cover the $600 in fixed cost so I need to sell four of those
to break even that makes sense yeah that makes sense okay great you know that
makes sense so that's so what what did you just trigger what did you just
figure out here you just figured out 150 $150 profit right and you just divided
that into six hundred dollars to get for four units what was the six what was the
sinner dollars fixed what was the one hundred and fifty contribution margin
well that's you know what its contribution margin the sales sales on
its variable costs so we just kind of did it in our head so we know the
formula so if you could break even point and you can't remember anything up you
can't remember anything under test or whatever you just do just do a sales
just do a sales price variable cost and a fifth cost some really small numbers
so you can conceptualize it in your head like this how we just did their head I
think it was very easy yeah you need to sell four of these man to break even
Doug all right so then you say well how do we get that I guess it's called
reverse engineering you're going to go over and reverse here how do we get that
now we have four we have four units is that going to work like is that like is
that so real I try to love this breakeven because you just plug it in if
we sell four units is our revenue is going to equal I cost I don't know let's
go back to the algebraic expression let's take out let's take out this X and
put in four because I can rock with this because now we don't have frickin
letters in our math right jeezum crow bars for right we sold four
units that's eight two hundred dollars a pop x for that eight hundred dollars
that's going to equal $50 $50 in variable costs per pop times
4 that's $200 plus the 6 and dollars and 6 that's $800 $800 equals $800 ding ding
ding 4 units is our winner boom boom boom you jerk you let's stay positive
people let's stay positive and that was that was breakeven
what does break-even revenues equal costs okay anyways god has got to stay
positive got to stay away from the haters right evade the haters call me
Ray Charles like don't see the haters right I only see haters want to look in
my rearview and trust me don't look in the rearview too much that I wreck out
ok I'll crash if I keep on looking in the rearview so I'm trying to say I
don't even even feel them hater I don't I don't care about them guess what
because they're going to hate regardless all right never hate on me since I've
been 2 years old like all then hate bro it's all been hate until I didn't care
about the hate and I started going on YouTube
and not caring and then I started getting so much love so who can I only
even knows there's a crazy world right livin la vida loca