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Old 12-09-2009, 08:08 AM   #2
BigJimsBBQ
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Join Date: 06-10-09
Location: Newnan, GA
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Default Your Company's Break Even Calculation

What you are asking is too complex to answer. You need to use a software program like Quick Books to keep records on your Profit and Loss (P&L). When you break everything down from an anual / quarter / Month / Week view on a P & L, "Break Even" is when your sales equals your Cost.

One way to predict is to at the beginning of the year is:

1) Add up all of your anual cost and devide by the number of festivals you will vend. This gives you an average operating cost per event to add.

2) Predict Sales Oportunity for each festival by multiplying 3-5% of last years attendance.

3) Figure out what your product cost are for each event seperate by looking at what it will cost you for the product you will sell at this event multiplied by step 2 (That events Sales oportunity). Then add in all other event specific cost such as Travel, Lodging, Spot fees, etc. to get event's total cost.

4) Add Step 1 (Average Operating Cost) to each of the event's Cost (Step 3) to obtain the Total Event's Break Even Cost for each event.

5) Devide Step 4 (Events Break Even Cost) by Step 2 (Event's Predictive Sales Oportunity) for each event to obtain the "average sales cost" per event.

6) Add your desired average profit desired (like 25%) on the sales to obtain both the average sales price for each event and total sales required to make projected event profit.

As you can see, this is very complex, but it is always good to have a plan and knowledge what sales amount at a event is a "Win" situation.

Best of Luck,
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Big Jim - Newnan, GA
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