Determining your Break Even

“Happiness is not in the mere possession of money;
it lies in the joy of achievement,
in the thrill of creative effort.”

~ Franklin D. Roosevelt

Before you can determine what your rates or your budget should be, you need to figure out your break even.

Your break even amount is the bare minimum amount that you need to be making monthly to cover your expenses. If you are able to make this amount, you won’t be losing anything but you won’t be gaining either.

The formula to determine your Monthly Break Even amount is:

Personal Expenses Total + Business Expenses Total + $250 = Break Even

The reason I recommend adding $250 is this – life never goes exactly according to plan. So just like with time blocking, it’s important to have a bit of buffer to account for incidental expenses.

Common Monthly Expenses:

  • Rent
  • Phone / Skype
  • Internet
  • Website hosting
  • Marketing expenses (may be yearly)
  • Client management software
  • Accounting software or book keeper
  • Supervision / Consultation
  • Personal Therapy
  • etc

Action Item: Determine your break even amount.