The importance of break-even point for startups

The cost of startup is very high when starting a company, the business owners must pay extra attention to break-even point. The break-even must be first goal of a company, there are many ways to focus on the break-even, the most common way is to focus on the monthly break even point. At the end of the month the company must cover the cost of fixed cost and as well as variable costs. The fixed costs are the priority over variable costs, usually fixed costs are the highest cost of a company. The rent and the salaries are the biggest contributors to the costs. Every employee has to focus on contributing to the growth of the company, otherwise the employee becomes a cost to the company. In fact the biggest cost of a company is the salaries and as well as the cost of salaries of employees. The higher the cost operating the company the higher the break-even point and less chance of achieving the goal anytime sooner. The break-even point is vital to companies because before this stage companies cannot focus on expanding the business. Think of it like this, someone has to fund the operation of the company and if the company cannot make enough earning the person that is funding will lose interest. Therefore, it is vital that the company does not exhaust the investment and lose the interest of the investors. There are many businesses failed because their did not make the break-even point as priority. How can you achieve break-even point fast?

1. Evaluate the cost
   
2. Eliminate the biggest costs
3. Eliminate the free riders
4. Outsource the accounting
5. Reduce spending on unnecessary things. 

These basic five steps will help you to reach your goals to achieve break-even point faster. The best advice is to break down the break-even point to daily, and try to achieve daily goal. Once the goal is achieved then try to achieve the consistency of daily break-even. Focus on the sales team, because the sales team are the most important team of a company, the sales team has to achieve the companies goals faster than any other group of employees. The higher the sales of a company the more money the company has to handle the extra cost.