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Unformatted text preview: a true picture of ﬁxed costs by any means, but is quite
useful for determining a break-even point.
The analysis included in the chart in the illustration below shows a general break-even analysis for
assumed ﬁxed costs of $94,035, average per-unit revenue of $325, and average per-unit variable cost of
The line on the chart shows proﬁts increasing and crossing the break-even line at approximately 1,220
units. CHAPTER 17: FINISH THE FINANCIALS 17.7 BREAK-EVEN CHART This illustration shows the break-even analysis that compares unit sales to proﬁts. It uses data from
the table shown earlier in this section. Summary
Your ﬁnancial tables are interrelated. The sales and personnel forecasts and assumptions affect the
proﬁt and loss, the proﬁt and loss affects cash, and the cash and balance sheet work together.
Financial analysis is rarely a true step-by-step process. You will probably have to go back through your
tables to review the assumptions for realism and accuracy. As you revise assumptions, make sure you
constantly check back to keep your cash balance positive. CHAPTER 18: STRATEGY IS FOCUS With most of the ﬁnancials now done, it’s time to turn to strategy and tactics. You’ve been developing strategy
throughout the planning process, I know, because you can’t do the numbers without thinking about the
strategy. However, now you want to explain your strategy and develop the implementation. If you refer back
to the text outline we discussed in Chapter 2: Pick Your Plan, you probably have several topics still blank in
your plan document. But not in your mind. It’s time to write your thoughts on strategy and tactics into your
text outline. Deﬁne Overall Strategy
Strategy is focus. Across the entire business, over the whole range of possibilities involving different
products and services, different target customers, different kinds of ﬁnancing, different levels of
growth, what are your choices? What are your priorities? General Principles of Real-...
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- Winter '09