What is the break-even analysis for your venture? How did you determine this? At one point will you reach your desired profitability level? Explain how you might reach profitability sooner, such as the factors impacting your profitability.
Please respond to this:Greetings Class,
I hope that everyone is having a great week so far! This week we are discussing the break-even analysis for the venture idea we have. This is a tool that is used to determine at what point your venture is profitable. The biggest debt that I will have starting out is my website designing. Funneling product through the website will allow me to have a small commission for each sale, but realistically this commission will most likely only be 3-5% of each transaction. This will not be the way I make most of my profits starting out. The biggest way for me to generate more income with the curriculum is to buy the curriculum that are most sought after by the consumer and purchase them at a wholesale cost from the merchant and sell them directly ourselves. The commission will be much higher doing some of the products this way, and by only personally housing the curriculum that are always sought after I can ensure I don’t have inventory being wasted and just sitting there. Starting out, I am not expecting to generate much income since most people will have never heard of Homeschool Hub except our community here in Columbus, GA. Getting the word out will take a year or two, at the soonest.
Ideally our goal is to begin generating more income our second year after studying the analytics of which curriculum were sought after the most and then purchasing those curriculum at a wholesale cost right before peak season begins, ensuring any credit card or loan for the merchandise is paid off immediately. Judging your inventory on the analytics from the previous year will be an easy way to ensure you don’t have stale inventory.
By the fifth year of our business our goal would be to be generating a profitable business and be mostly debt free at that time, except for any credit owed for that coming year’s school year.
One of the best ways for us to get the word out will be to keep in close contact with the leaders of the current communities and advertise our domain through them and try and advertise at any conventions each year to promote sales growth. Getting the word and constantly studying the analytics to determine which curriculum can be capitalized on by housing in house. Handing out flyers and trying to speak with the parents would be beneficial. Another way to help get the word out would be to try and hold community events specifically for the homeschool community and use that as a tool to gather people together and pass out flyers or business cards.
Thank you for taking the time to read my post for this week!
Please respond to this:A break-even analysis is a calculation of the point at which revenues equal expenses. In securities trading, the break-even point is the point at which gains equal losses. Break-even analysis help business owners determine when they’ll begin to turn a profit and helps them price their products with that in mind. It provides a dynamic overview of the relationships among revenues, costs and profits.
According to our reading the breakeven point can be measured multiple different ways, but the basic equation of the breakeven point is:
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