Black Belt Business Tactics

FIGURE #l: BREAK EVEN ANALYSIS (Pricing Approach)

 

        Overhead (monthly):

            Rent and Utilities                                                  $400.00
            Miscellaneous Overhead                                        200.00
            (equipment, advertising,
            inventory, etc.)

            Total Overhead:                                                   $600.00/mo

        Target Salary:                                                                      $2000.00/mo

        Revenue Goal:                                                                     $2600.00/mo

This is how much money the class must generate for you to cover your expenses and to make the desired monthly income of $2000.00.

Assumptions Made

1. Assume you charge each student $30.00 per month.

        $2600.00/$30.00 per student = 87 students necessary to attain revenue goal.

2. Assume you charge each student $60.00 per month.

        $2600.00/$60.00 per student = 44 students necessary to attain revenue goal.

3. Assume you take the middle road and charge $45.00 per month.

        $2600.00/$45.00 per student = 58 students to achieve your projected goal.

4. If you were to ignore salary for yourself, and simply wanted to cover your expenses...

    At $60.00 per month, you would need $600.00/$60.00 or 10 students.

    At $30.00 per month, you would need $600.00/$30.00 or 20 students.

    At $45.00 per month, you would need $600.00/$45.00 or 15 students.

    (Return to Article)

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