Question about making a business plan

[Delinquent]

I'm using Business Plan Pro to help me create it b/c I need all the help I can get. One part of it asks for a break-even analysis table. How am I supposed to figure out running costs if I never even ran a business before? I also don't have a clue as to what this means.
The analysis depends on assumptions for estimated monthly fixed cost, average per-unit revenue, and average per-unit variable cost. It assumes a standard month and requires averages for your business overall, not detailed unit pricing or unit costs.

 

[Warik]

I'm using Business Plan Pro to help me create it b/c I need all the help I can get. One part of it asks for a break-even analysis table. How am I supposed to figure out running costs if I never even ran a business before? I also don't have a clue as to what this means.

Estimate, ask around, do research. Suppose you have $100,000 and you want to start a business. How much will it cost to pay your employees? Rent? Office supplies? Electricity? Phones? Etc... You have to know how much your business is going to cost to run each month if you're going to plan how you're going to run it for the next year+. My suggestion to you would be to ask people who have owned a similar business, then ask around as if you were ready to start this kind of business yourself and see how the numbers compare.

The analysis depends on assumptions for estimated monthly fixed cost, average per-unit revenue, and average per-unit variable cost. It assumes a standard month and requires averages for your business overall, not detailed unit pricing or unit costs.

Not certain so please get a second opinion. My take on it is this:

average per-unit revenue = on average, how much is each unit sold for? That is, if you are selling pencils for $1 and pens for $2, your average per-unit revenue is $1.50. If it costs 50 cents to make a pencil and 75 cents to make a pen, your average per-unit cost would be 62.5 cents (not sure what they mean by variable).

I'm assuming that the average unit cost is to be obtained from the entire supply line and not just on a per-product basis, otherwise there would be nothing to average out since each product costs the same as an identical product.

Good luck.

-Warik

 

[HumorMe]

Break-even analysis requires you to determine how long will your business operate before breaking even. All new businesses take time (start-up costs) before it achieves a break-even point. Depending on your market, will determine this. Whatever you think something will costs...double it. Start-up costs are a killer. It's really undetermined until you actually get into it. If capital is at a premium, then you will have to do a lot of things yourself.

Fixed costs are basically anything that is paid on a monthly basis. Whether it is mortgage, insurance, electricity, utilities, gas, estimated taxes, etc. Costs that aren't fixed are things like repairs and refunds or something along those lines.

 

[HumorMe]

Also, never assume that all the rental units will be full each month. Some months they may be full but most months they will not so go on the low side of occupancy when estimating these things but go on the high side when figuring out monthly costs. I think it would be safe to say that.