Do you know your “Break Even” Point?

Have you ever wondered how much work you need to turnover and at what profit margin to exactly cover your “running costs” or “fixed expenses?”. In other words have you ever accurately calculated the Break Even Point for your business?

If you’re even mildly curious about your “business development” you’ve probably at least thought about your break-even point but maybe you never found the time to figure it out or you never had a user friendly calculator to punch your numbers into and get the result, right?
The fact is if you’re in business and you don’t know your break-even point, then how do you know when you’re making a profit?
Before you start feeling frustrated about this often irritating little detail of business the good news is, that’s all about to change. We’ve created a very simple Free, Break Even calculator to help you calculate the break-even point for your business right now. All you need are some accurate financials, then click the link and follow the three easy steps below to calculate your break-even point in two minutes flat;

Start Here >> Breakeven Calculator

Step 1: Get an accurate copy of your Profit & Loss. Note its imperative that your numbers are as accurate as possible otherwise the result won’t mean a thing. So make sure the income and expenses listed in your P & L are up to date and accurate.

Step 2: Also ensure that you’ve separated your “Cost of Sales” from your “Running Costs” or “Fixed Costs”. If you’re unsure about this, make sure you ask your bookkeeper, and if they’re unsure give us a call we’ll walk you through it.

Step 3: Punch your numbers into the Yearly or Quarterly space on the calculator and hit each of the three calculate buttons to get your Gross Margin, Break Even and Net Profit figures.
Now here’s the thing, once you’ve calculated your break-even point, you can play around with the numbers and gauge the result to your bottom line when you shave 2% of your Material costs and/or increase your pricing by 4%. Also use the top part of the calculator to work out your Gross Margin on individual jobs and find your most profitable work. Chances are, 80% of your profit is coming from 20% of your work.
Have fun!


What is the one compelling reason someone should use you and not your competitor? If you struggled answering that question you are putting yourself at a distinct disadvantage in your market and need to carve a ‘Niche’ for your business.

Most builders and contractors know that in order to generate the most clients, profits and sales, they must come up with their own “Unique Selling Point” (USP) and make their products or services known to their selected market. This section will show you how to come up with the most creative USP and Guarantee for your business.

Would you like to establish your name or brand and set yourself apart from the competition?

Having your own Unique Selling Point (USP) will help you set yourself apart from other businesses in your market, target your market more effectively, and create more effective marketing campaigns.

For more specifics on how we can help your business in this area, contact us direct to book in for your free “Strategy Session” with one of our expert Business Coaches. Lets talk about your business and see how we can take you to the next level.


Industry: Plumber

Challenge: Creating uniqueness or a compelling reason for your marketplace to choose you over your competitors

The Cause: 
Stuart always believed the only reason his clients chose a competitor’s quote over his was price. As a result, Stuart spent a lot of his time ensuring his prices were competitive and wouldn’t come in too high. This ensured Stuart’s profits were kept to a minimum.   

The business pain: 
Stuart couldn’t understand why clients who knew him well would still choose to work with a ‘fly by night’ plumbing company over his, just because they came in cheaper on the quote. Stuart was running around quoting everything that came across his desk. He did big jobs, small jobs and medium jobs. Some were private jobs and others were commercial. Stuart was being all things to all people and it was costing him time, money and a lot of frustration. One day Stuart was struck with sobering realisation that the only thing he had to differentiate himself from his competitors was price. This hurt, because he knew he offered so much more, he just wasn’t saying it.

The personal pain:
Stuart had some friends who were also plumbers. One in particular was doing three or four times the revenue that Stuart’s business was doing. This was all very well but there were a few things Stuart couldn’t ignore. Firstly, his mates plumbing company started five years after his. He could remember when Craig first started out and how he had volunteered advice on getting started. That was four years ago. Last year they compared numbers over a couple of beers at the end of the financial year. Stuart was startled to find his mate’s business doing close to double the net profit percentage that he was. On top of all this, Stuart’s mate also enjoyed the privilege of an overseas trip once a year. But the thing that concerned Stuart the most was how much less his mate worked than him.

The solution: 
Stuart realised something needed to change and he quickly got to work developing a compelling reason why his clients should use him as opposed to his competitors. He needed to put together the most promotable and best message possible that truthfully represented the “service” he offered. Stuart wanted to come up with something that was a true reflection of who he was and what he did.

So he set about answering the following questions to find his answer:

  1. List your three biggest competitors…
  2. What do they do well?
  3. What do they do poorly?
  4. What would the average person say about each of these competitors?
  5. What is ‘unique’ about them?
  6. What ‘guarantees’ do they have in place?
  7. How are these guarantees promoted?
  8. How ‘genuine’ are these guarantees?
  9. What can’t each of your competitors guarantee?
  10. What can they do that you can’t?
  11. In an ideal world, what would you like your customers to see as the main point of difference between you and your competitors?
  12. If there were one phrase your customers and prospects used to describe what you do now, it would be…
  13. Describe who the average customer is for your industry…
  14. Is the current market place growing or diminishing? Please explain.
  15. Is your typical customer different from the generic industry customer you have described?
  16. Describe your current average customer…
  17. Describe your ideal future customer…
  18. In what four ways do you perceive that you are genuinely different from your competitors?
  19. What can you do that no one else can?
  20. What are the five things about your product or service that you take for granted, that your customers don’t know about?
  21. What are three things your best customers say about you?
  22. What are three things your worst customers say about you?
  23. What are the two things that annoy your customers the most when dealing with businesses in our industry?
  24. What are three problems or frustrations that buying your product/service solves?
  25. What are the three major benefits of buying your product or service?
  26. What frustrations do customers experience when trying to find your product or service?
  27. If you were a customer, why would you dislike buying from you?
  28. Describe the sort of customers who dislike buying from you… and tell us why?
  29. Describe the sort of customers who love buying from you… and tell us why?
  30. If you could easily overcome any two of your customers’ frustrations, what would they be and how would you overcome them?
  31. What is your current written guarantee?
  32. How is this different from your guarantees of the past?
  33. How do customers react to your current guarantee?
  34. What three additional things will you be able to fully guarantee within the next  months?
  35. Now take some time to complete in your own words, your own using all of the information above.


After completing the extensive list of questions Stuart eventually settled on a Unique Selling Proposition that he was happy with. He would offer his customers the following guarantee:

“We guarantee to return your call within 24hrs, show up on time and leave your place spotlessly clean or we will pay you.”

The Outcome: 
Stuart’s guarantee put him in a position to compete for higher-margin jobs and gave his customers the compelling reason they needed to use him over his competitors. Stuart soon found himself in a position where he could be more selective with the type of jobs and the customers he worked with. His business finally had an identity and soon developed a solid reputation in his chosen target market.

For more specifics on how we can help your business in this area, contact us direct to book in for your free “Strategy Session” with one of our expert Business Coaches. Lets talk about your business and see how we can take you to the next level. 


Do you have adequate financial controls? 

87% of the builders we’ve worked with had little or no financial controls when we started working together. By far the biggest draw back for our new clients is their lack of financial systems and a pricing strategy that realtes to their breakeven point. This section will give you a basic understanding of the essential financial controls you need to run a profitable business.

Would you like the peace of mind of knowing where every dollar coming in and out of your business is going?
Having accurate and updated financial systems allows you to make more informed decisions. You’ll know your cash position on jobs and which jobs are more profitable and why. This alone could lead to better strategic decision making.


The Challenge: Lack of adequate Financial Controls

The Cause:
John has had always been a good electrician. His clients like him and they keep coming back. Finding the work has never been a challenge for John. His real concern is managing the money and having his financial ducks in a row, so to speak. John has been running his business out of his bank account and doesn’t make use of the five cornerstones of any solid financial controls namely:

  • Updated Profit & Loss statements
  • Balance Sheets
  • Break Even Point
  • Cash flow Forecast
  • Debtors and Creditors System

The Pain:  
John feels the tension in his shoulders every day and the migraine headaches come and go. Most days John feels sleep-deprived from a lack of quality sleep the night before. When he climbs into bed he has “monkey chatter”, those thoughts that keep running through his mind until the early hours of the morning.

John never feels like he gets a true break from his business. On weekends and holidays he spends time on the phone to clients or team members fixing problems. When he’s not on the phone his mind constantly races with what needs to be done or worries of what might go wrong.

So far it’s cost John a marriage and is starting to affect his health as well. It’s as if he can feel himself aging prematurely. What happened to business supposedly being fun he wonders?

The Solution:
John finally got some direction and learnt that getting his financial controls in place would not be as difficult as he thought. He just needed the right guidance and tools. Here’s the simple six-step process John followed:

A System for Managing Finances: The first thing John did was find a financial system that could capture his critical numbers. He quickly discovered the popular options were Quickbooks and MYOB. John chose MYOB for its user-friendly functionality. The program also came with easy to follow tutorials, which taught John how the system worked.

Outsourcing the Bookkeeping:  The next critical step for John was to outsource his bookkeeping to someone who was familiar with using MYOB and who would spend a day a week feeding all the debtors and creditors information into the system.  Having accurate financial information is essential and can only be achieved with accurate input. With this in mind, John made sure he found a bookkeeper with a strong reputation and solid reference checks.

Understanding the numbers: John soon learnt what the important numbers were for him to understand and review in his profit and loss statement. Namely:

  • Total Revenue
  • Cost of Sales
  • Gross Profit
  • Fix costs
  • Net Profit

Reviewing his Balance Sheet every quarter became a regular event for John. John also set aside time to check his cash position on a weekly basis.

Once John was familiar with his Profit and Loss numbers he felt confident to start setting profit goals for the months ahead.

Break Even Point: By using the Break Even Calculator John soon calculated the Break Even Point for his business. He now knew exactly how much money the business needed to break even each day, week, month and year.

Cash flow Forecast: Next John started using a cash flow forecast. This was possibly the most powerful tool John had ever used to manage his finances. As opposed to just looking back at his numbers in retrospect, John could now look ahead at his cash position over the coming 12 weeks and make more informed decisions.

Debtors and Creditors System: John soon had his bookkeeper working two full days a week using the debtors and creditors system he’d set-up. As soon as any of his debtors went past 14 days, John’s bookkeeper would send an email reminder to them using a pre-written letter giving them a gentle reminder. There was also a letter and phone scripts for 30-dDay, 60-day and 90-day accounts.

The Outcome:
Within 6 months of implementing the new financial controls, John reached a point where looking at his financials became his favourite part of the business. He couldn’t wait to see the latest figures and assess the results his new sales and marketing strategies had generated.

John knew exactly how much money was going in and out of his business to the very last cent. Having that level of control boosted John’s confidence and gave him piece of mind beyond measure. John’s financial information was now being kept neatly and meticulously in solid financials systems, instead of his head.

Tinkering with the numbers and making more informed decisions because of it, allowed John to see his business as a ‘game’. For the first time in years, John was having FUN.

For more specifics on how we can help your business in this area, contact us direct to book in for your free “Strategy Session” with one of our expert Business Coaches. Lets talk about your business and see how we can take you to the next level. 


Is your team performing at a consistently high level? Is the morale or ‘mood’ of your business dictated to you by one or more individuals in your team?
Every builder or contractor has a “Culture” or “Code of Conduct” including yours. If you haven’t intentionally defined the “Culture” or “Code of Conduct” in your business, then this will be decided for you by the people with the strongest personalities in your business. We’ve worked with clients who’ve had the morale or mood of their business dictated to them by one or two members on their team. If these individuals were having a bad day, then so was everyone else. Sound familiar?

Would you like a team that sets their own performance standards, holds each other accountable and attract more good people?

Having a Code of Conduct developed by your team which they take ownership of and hold each other accountable to helps set the tone for your business. You’ll be free to remove yourself from the business and backstop performance standards even when you’re not there. The right Code of Conduct also ensures that you keep your best people and attract the best people for your business.

For more specifics on how we can help your business in this area, contact us direct to book in for your free “Strategy Session” with one of our expert Business Coaches. Lets talk about your business and see how we can take you to the next level. 


Case Study

The Challenge: Team Communication
The Cause:
Tim knew that the level of communication in business needed serious attention but he always seemed to have more urgent matters to attend to. He never made time to sit down and think about how he could improve how his team related to each other. Eventually (as with anything that gets ignored for long enough) the problem reached a point where Tim had no choice but to fix the problem.

The Business Pain:
Inefficiencies, delays and bottlenecks on jobs were too numerous to mention. Project management became a nightmare as changes in delivery dates of supplies and contractors was not communicated or done so too late.

Besides the endless ‘hiccups’ with suppliers and contractors, there were team relationship breakdowns due to the lack of communication. Some of Tim’s team were having personal problems, which affected their performance on-site. In one case, a new worker was going through a marriage separation but his team-mates were unaware of the issue. One day he got remanded for his attitude by a supervisor and responded aggressively because of the pent-up emotion he was feeling. There were other sensitive issues like these, which required better systems for communication.

The Personal Pain:
Tim often found himself in confrontational situations with either his team or contractors. Because Tim was naturally a soft natured person, these confrontations weighed quite heavily on his conscience. He would take the stress and worry with him when he went home and this impacted on his quality of life and the time he spent with his wife and children. Tim knew something had to give.

The Solution:
Tim searched for an answer and found that there were a number of choices available to him to alleviate the business and personal pain he was experiencing. He immediately set to work putting the following strategies in place:

  1. The first thing Tim did was to implement regular team meetings that had watertight agendas and a nominated chairperson.
  2. Each meeting started with an ‘Indian rain stick’ where each member of the team had an opportunity to speak uninterrupted about any business or personal issues they were having. This proved to be a very powerful process and put everyone on the same page as well as flushing out any minor grievances.
  3. Every two months, anonymous team questionnaires were sent out to the each team member to get their feedback on areas of improvement and their opinion on the management style.
  4. A monthly team bulletin was published and sent out to each team member updating them on any changes and inviting them to participate in regular social activities.


The Outcome:
The result for Tim and his team was a business with more open communication from top to bottom. On the business-front, mistakes, bottlenecks and inefficiencies were less frequent. Because team members were given an opportunity to express themselves in a safe and unthreatening environment, everyone had a good understanding of each other’s personal situation. The social events helped further galvanise the team and brought a fun and friendlier dynamic to the team. The culture within Tim’s team was starting to shift and it gave him more peace of mind and allowed him to enjoy a better quality of life with his wife and children in the evenings and on weekends.

For more specifics on how we can help your business in this area, contact us direct to book in for your free “Strategy Session” with one of our expert Business Coaches. Lets talk about your business and see how we can take you to the next level.