Wherever you are on your agency journey, there will be a time when you need to scale back and survive without eating into the retained profit that you’ve built in your business and that’s when you need to be thinking about the idea of break-even.
What is Break-Even?
The break-even point is the production level where total revenues equal total expenses. In other words, the break-even point is where a company produces the same amount of revenues as expenses. Since revenues equal expenses, the net income for the period will be zero.
The company didn’t lose any money during the period, but it also didn’t gain any money either. It simply broke even.
Learn more from Paul Barnes, MD of MAP on how you can work out your break-even point for your agency.
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