5 Ways to Get Out of A Breakeven

Breakeven is simply a point in your business where your business profit = business expenses. You’re not making any money, but neither are you in debt.

It can be a difficult point for any business to be in because the business is just stagnated. At this stage, the business is not growing but is also not failing. If you’re at a break-even point in your business, here are 5 things you can try to get out of it.

1. Reduce your expenses

To get out of a break-even point, the first thing you need to tackle is reducing your expenses.
Do you really need that invoicing or CRM software at the moment? Are there free versions you can make use of? Do you need to reevaluate staff size? Are you overspending on your production process? Are there cheaper, yet quality raw materials you can get?

You might never cut down on these kinds of expenses till you start looking with the aim of cutting expenses down. You might be at a break-even point because you’re spending too much on things that can be achieved on a cheaper budget without compromising on quality.

You might never cut down on these kinds of expenses till you start looking with the aim of cutting expenses down. You might be at a break-even point because you’re spending too much on things that can be achieved on a cheaper budget without compromising on quality.

2. Market to Sell More

Another way to get out of the breakeven point is to market to sell more. You might be breaking even because you aren’t selling enough. Every business has/should have a minimum number of orders that should be sold every month to keep the business going.

Find out what that number is for your business and focus on creating and executing marketing & sales strategies that will help you achieve that number. Invest in paid marketing with excesses that have been cut out from your expenses.

3. Focus on fast-selling products and create bundles

In every business, there’s a vantage product.
A vantage product is simply one that is superior to others in terms of sales. It is simply the product that sells fast. If you’re at a breakeven point, concentrate your efforts on selling more of the products that move fast. Whether it’s a particular ice cream, a portrait deal, a dress from a collection, or a snack pack that’s doing well, focus on selling as many as you can.

You can also create subsidized bundles to attract customers who like combination and budget deals. When creating these bundles, be sure to include products that have a higher profit contribution margin. In every business, there are certain products that when sold bring in more profit than another product.

For example, a dress can earn your business #1000 over a skirt that can just earn you #500. So, when creating a bundle, create one that has that kind of product.

4. Raise Your Prices

When all the above has been done and you’re still in a crunch, the next step is to raise your prices. You might be selling a lot, have already cut down expenses to the bare minimum and pumped up your marketing, but are still at a breakeven point, then it’s time to raise your prices.

To ensure that increased prices don’t chase your customers away, consider improving your branding or packaging to give your customers a higher value perception. If customers don’t think or perceive that they stand to gain more in a price increase, they’ll draw back and look for cheaper options.

5. Work on Business Development

Another reason you might not be breaking even is that your products are becoming obsolete or might be out of style. This might not apply to every business, but businesses like baking, fashion, salons etc. will need to pay attention to this.

To make more sales and earn more, ensure you’re selling what your market actually needs. For example, more people are interested in exploring new flavours and new recipes, so as a baker or food business owner, you want to ensure that your servings are up to par with what the market is interested in.

What are more people on the lookout for when it comes to style and fashion? Are they looking for more sustainable clothing? Are they on the lookout for dresses that can be styled in multiple ways?
If you’re able to develop your business and your products, you’ll be able to sell more and make more money.

These are 5 ways to get out of a break-even.