For this activity, think about a relatively simple product or service that you could sell, such as a line of t-shirts, a dorm room cleaning service, or anything else that you’d be interested in. You can also choose apps and other tech platforms, but they may be more difficult to use in this exercise. Now break down all of the fixed and variables costs for running this business in a given month, and calculate the breakeven point: How many units (it could be hours of service, or number of t-shirts sold) do you need to sell at what price before you begin to break even? If you want to calculate how long it takes to be profitable, calculate a realistic monthly profit margin, and then think of all the materials and supplies you would need to get started. Add these up and then divide by your monthly profit to see how long it would take for your to recover your initial startup costs.
my subject: mobile hair cutting for seniors for me add the rest
- No rent (vehicle with ability to hold supplies)
- Paying hair dresser $ 25 cut/ charge $50 person
examples below:
Reply
Shane Reiss
Car Washing
- Rent $200 a month for a small space
- Utilities $100 (water, electricity, etc.)
- Insurance $50 (liabilities)
- Marketing (varies) around $50 a month
- Equipment Maintenance $50
Total: $450
Per Car - Water and Cleaining $5 per car
- Labor $10 per car
- Equipment depreciation $2 per car
Total Variable Costs per Car Wash = $17
Break Even Calculations
$25 per car
Break-Even Point = Total Fixed Costs / (Price per Car Wash – Variable Costs per Car Wash)
Break-Even Point = $450 / ($25 – $17) = $450 / $8 = 56.25 car washes
Since we can’t perform a fraction of a car wash, we need to round up. So, 57 car washes
Profit margin is 20% on each car wash sold.
Profit per Car Wash = Selling Price per Car Wash – Variable Costs per Car Wash
Profit per Car Wash = $25 – $17 = $8
Monthly Profit = Profit per Car Wash * Number of Car Washes Sold – Total Fixed Costs
Monthly Profit = $8 * 57 – $450 = $456 – $450 = $6
Monet back on initial startup:
$1000 for equipment purchase and setup
Time to Recover Startup Costs = $1000 / $6 ≈ 167 months
167 Months, looking at this now, this would not be a smart investment or “small business” to pursue.
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