Recently a friend of mine who is part owner of a small manufacturing business asked me to help him with the sale of his business.  He was trying to figure out how much the business was worth.  We used PlanGuru to develop a 5 year forecast and come up with a range of values based on the discounted cash flow.  During the process I asked him what his breakeven point was.  He gave me a number off the top of his head. 

I asked him because I thought it would be useful information for his buyer.  I was able to show him what his breakeven sales level is because PlanGuru computes it automatically.  His estimate of his breakeven sales point wasn't even close.

It was a real revelation to him and we spent the next 45 minutes discussing the concept and the impact reducing expenses had on this breakeven sales point.  It seemed like it really changed how he saw his business.  My friend has been controller of this manufacturing business for probably 25 years and works with a CPA.  To be honest I was a bit taken back that he didn't have a better understanding of the concept.  

I think this is pretty basic information every business owner and financial officer should have.  Do you know what your breakeven point is?  If you don't, PlanGuru can compute it for you too.  Once you've built your budget or projection in PlanGuru it is automatic.