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Break even

Crisis for business
Talking even with very advanced businessmen, do not tell them that a company with a professionally built structure is able to work so autonomously that the manager does not have any objective excuses for falling statistics. They will not understand you, as they are accustomed to excuses from others, and some of them themselves believed in these excuses. And touching on this topic, you can cause an emotional outburst on the topic “I am a victim of circumstances.”

Seasonal downturns, a general decline in the market, problems with suppliers are not “objective” causes, but symptoms of an absent marketing service.

Chronically low profits, permanent insolvency – the accounting department and the financial director should be urgently taken to the nearest torture chamber for heart-to-heart talk, and the executive director should be sent to the nearest monastery as soon as possible to accept penance.

Are you losing customers? Do a rectoscopy to the sales department. Can’t attract new ones? Submit a commercial director and personnel department to this procedure who do not know how to build sales services.

You can not recruit a sufficient number of specialists to work in the state, as they are not on the market? Continue the proctological procedures for the personnel department, and ask the priest to double the penance to the director, since you simply do not have an active personnel service and employee training. Yes, you heard right – service training! This is one of the main compartments that provide carefree autonomous navigation in enemy sharks inhabited by waters.

Head shouts

“As soon as the department heads come to you (the first head) and begin to tearfully complain about the crisis, the general decline in the market, increased competition, etc.“ causes ”that are not under their control, cut off their ears.”

Create your own Kunstkamera and place there a pair of cut off ears every time you hear snotty complaints instead of constructive suggestions.

Businessmen sometimes tell me fairy tales: it is impossible in our market to show an increase in profits, “for the Cree-and-isis”! Analyzing the structures of their companies, I always find the lack of services and functions that are designed to cope with the “symptoms of a crisis”, which, in fact, concern them.

In the same “falling” market, some go bankrupt, others increase production. What happens to construction companies? Losing momentum. But personally, I know a few that are steadily expanding right now. Grocery companies? Car dealers? In all these areas, there are leaders who can increase turnover even in a crisis.

Break-even point calculation
The tablet here is a professional organizational structure of the enterprise, like the one that L. Ron Hubbard described and the management of each part of it according to the correct (!) Performance indicators.

There is one interesting indicator that a) is understood and used incorrectly, b) is incorrectly considered by those who studied it in institutions as a bare theory, not realizing that an enterprise has the potential to increase profits in almost any situation.

This is the so-called break-even point.

That’s what they write about it in dictionaries and textbooks. They are almost unanimous:

Break-even point: the minimum volume of production and sales of products at which expenses will be offset by income, and the company begins to make a profit in the production and sale of each subsequent unit of production. Not to be confused with “point of recoupment (project)”. This is not the same thing (the pay-off point is when the amount of profit gained amounted to an amount equal to the investment made).

The break-even point in terms of money is such a minimum amount of income at which all costs are fully paid off (profit is thus zero). Roughly speaking, how much we need to earn in order to “go to zero.”

As you can see, added value must be obtained to reach the break-even point. “Dirty profit”. As we have in mind not only the direct costs of production, but also the other necessary costs.

Financiers operate on this as a term – the necessary expenses.

Only here, with the wrong structure of the enterprise, you will incorrectly determine the structure of “necessary expenses”. And financiers are rarely experts in viable business structures.

breakeven point of sales

“The break-even point in terms of money is such a minimum amount of income at which all costs are fully paid off (profit is zero).”

Take the company, the director of which came from the manufacturers. He creates a “purely production structure,” in a simplified form, reproducing the Soviet plant. In it, 90% of the personnel are engaged in production (which includes logistics, supplies, warehousing, transportation – these are all production areas). Be sure to have accounting (the state requires). In the most exaggerated variants, the structure ends there. In the less exaggerated there are a couple of sellers. The head does the rest himself.

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