Break-even analysis, in plain English
It sounds like an accounting exercise. It's really just answering one question: how much do you need to sell to stop losing money?
Break-even is the sales level where your revenue exactly covers your costs — the point you cross from bleeding cash to keeping it.
The simple version
Add up your fixed monthly costs (rent, payroll, loan payment, insurance). Figure out how much of each sale is left after the direct cost of delivering it. Divide the first by the second, and you have the sales you need each month to break even.
Why lenders love it
It shows you know exactly what you have to do to survive — and it lets them sanity-check whether your break-even is realistically achievable in your market. A break-even that requires implausible volume is a quiet warning sign.
Use it on yourself
If break-even looks scary, better to know now than after the lease is signed.
See where your plan stands
Paste the plan you have into the free Scanner. It scores you against the eight criteria Canadian lenders use — in about thirty seconds, no account, nothing leaves your device.
Score my plan — freeLenderReady is an educational service, not a lender, broker, or financial advisor. Lending criteria vary by institution and change over time; treat this as a starting point, not a guarantee.