Before you hire, launch, or invest, there’s one number you need to know: your future break-even point. It’s more than a “boring” accounting term; it’s one of the most powerful tools you have in your toolkit as a business owner and CEO.
In this episode, Danielle Hayden, reformed corporate CFO and CEO of Kickstart Accounting, Inc., flips the script on how entrepreneurs look at their break-even point by turning it from a financial checkmark into a forward-thinking strategy tool. She walks through how to use it as a launchpad for smarter decisions and puts you in control of your numbers.
Key Takeaways:
- Break-Even as a Planning Tool: Knowing your break-even point helps you look forward, not backward, and make strategic choices with confidence.
- Know Your Break-Even Before Big Decisions: Calculate how your expenses will change first and then what new revenue you’ll need to cover them.
- Turn Your New Break-Even into Your Revenue Goal: Add a 10–15% profit margin to your break-even number to set a clear, sustainable monthly revenue target.
- Create a Margin of Safety: If you're not ready to make a leap, build savings in advance so you’re financially prepared to take on new expenses with confidence.
- Numbers Beat Guesswork Every Time: Ditch the gut-based decisions and use this method to plan investments without fear or uncertainty.
Topics Discussed:
What is Break-Even Point in Business & How to Use It (00:50 – 01:57)
How to Calculate Your New Break-Even Number (01:58 – 04:41)
Real World Example of Calculating a New Break-Even (04:41 - 06:08)
Saving for an Investment & Margin of Safety (06:08 - 07:11)
Using Break-Even to Plan Your Next Business Move (07:11 - 08:35)
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Episode Transcript
00;00;00;00 - 00;00;25;24
Danielle Hayden
Before you launch, hire or invest, there's one number you need to know: Your future break-even. Welcome back to Business by the Books. I'm Danielle Hayden, reformed corporate CFO and the CEO of Kickstart Accounting, Inc., where we use bookkeeping, CFO and tax services to help business owners just like you stop guessing and start making business decisions with confidence.
00;00;25;25 - 00;00;50;20
Danielle Hayden
Today we're talking about something that might sound boring, but it's actually one of the most powerful tools in your business toolkit. This is the break-even point, but I promise we're going to turn the break-even point around in a way that you've never heard before. This isn't about survival. This is about a strategy. Because you’re break-even isn't just a line, it's your launch pad.
00;00;50;23 - 00;01;16;08
Danielle Hayden
All right, you guys, now, I always like to start by defining what break-even is. Then we will go through how to use a break-even number. So what is break-even? Break-even is a point where your total revenue exactly covers your expenses. No loss, no profit, just even. But here's the twist, the real power of break-even isn't knowing what it was.
00;01;16;12 - 00;01;45;27
Danielle Hayden
It's using it to decide what's next. Instead of asking, did I break-even last month? We'll ask, what would my break-even be if I hired a new team member? What would my break-even be if I raised my prices or changed my business model? What would my break-even be if I paid myself more? This is how our CFO clients future-cast their numbers by building financial clarity into the decision before they invest.
00;01;46;03 - 00;02;10;18
Danielle Hayden
Why does planning with the break-even number work? When you understand your new break-even point before you make the decision, you take back your control as a business owner, as the CEO. So when you are thinking about making a new investment, I want you to ask yourself how much will this cost? Then calculate what will my new total expenses be?
00;02;10;20 - 00;02;46;27
Danielle Hayden
So this is all of your operating expenses. So we're going to take our average cost of goods sold plus our average operating expenses, plus the new expense. Right? So that's the important part is we're not just taking our PNL by month and pulling just the average cost of goods sold and average operating expenses. We then need to add the new expense line item, and the question from there is what revenue number would I need to hit to cover this new average monthly expense load?
00;02;47;00 - 00;03;12;06
Danielle Hayden
This is your new break-even. So the final question for you as the CEO is how confident am I that I can hit that new number? What is my plan to ensure that I am going to hit that number? And if not, what needs to change or what preparation needs to happen before I take on that new expense?
00;03;12;09 - 00;03;39;07
Danielle Hayden
This gives you the power. It's your roadmap. It stops you from investing based on gut feelings or panic. Let's all agree to say goodbye to FOMO here in 2025. Now, here's the part about this tool that we have to implement in order for it to be useful as a strategic tool. Once you know your new break-even, you must turn it into the revenue goal.
00;03;39;12 - 00;04;09;11
Danielle Hayden
So if your new break-even is $12,000 per month after including your new hiring or marketing strategy, you don't want to just survive. You also want to profit the 10 to 15%. So we need to add that margin in. So now your new revenue goal is about $14 to $15,000 a month. This becomes your minimum viable revenue. The number that you can't drop below,
00;04;09;11 - 00;04;41;10
Danielle Hayden
if you're going to keep this strategy profitable. Now if you are thinking, Danielle, this is too much for me. I know, I hear you, numbers are a lot and that's why we do so much of this work for our CFO clients. We help build in those growth calculators during our strategy sessions so that we can plug in those new investments for our clients and create a map for the decisions that need to be made to support the growth strategy.
00;04;41;13 - 00;05;08;07
Danielle Hayden
Now, I want to walk you through a real world example so that you can go and implement this. So let's say you want to hire a new contractor and their expertise cost $2,000 a month. Right now your current average operating expenses is $10,000 a month. So on average it cost you about $10,000 in all of your cost of goods sold and all of your operating expenses, plus your payroll.
00;05;08;09 - 00;05;44;07
Danielle Hayden
So this would make our new operating expenses $12,000 a month. So your new break-even point becomes $12,000. So that means you either need to reduce expenses somewhere else, raise your prices, or increase your revenue goal to $14,000 a month to maintain your profit margin. Now with these numbers, you've created clarity. You're not guessing. How many of us have felt like no amount of revenue is ever enough?
00;05;44;09 - 00;06;08;01
Danielle Hayden
As soon as you hit one goal, it's on to the next goal. Why did we even set that goal in the first place? Let's create a plan so that we can celebrate when we get there. So we've now created the revenue goal of $14,000 per month in order to afford that marketing contractor. Now we can celebrate when we get to $14,000 per month.
00;06;08;03 - 00;06;34;26
Danielle Hayden
Now, depending on your risk tolerance, you may decide to wait until you hit that revenue goal in order to make this investment. But I have a question for you: Do you need that new team member in order to hit that revenue goal? This is the old classic chicken and the egg. And so you might need to hire that new team member before you can hit the revenue goal.
00;06;34;26 - 00;06;56;10
Danielle Hayden
So what do we do now? We need to create a margin of safety in our savings account so we can start to save for these investments. Now, you've heard me say in the past, I want you to have three accounts. We have our operating account-money in, money out-our tax savings account, and then our rainy day fund in that third account.
00;06;56;17 - 00;07;22;27
Danielle Hayden
We can start to save the money that we would need to have that $14,000 a month for 1 to 3 months before taking on that new contractor. Do not let perfection keep us from progress. All right, let's take a moment to summarize so that you can lock this into memory and go take action. Break-even is not just a past number.
00;07;23;00 - 00;07;57;15
Danielle Hayden
It's your planning tool. I want you to use break-even to test the true cost of your next strategy, so that then you can build your new revenue goal around that break-even and profit margin. This turns every decision from hiring to launching into a math problem you can solve. Not a risk that you have to fear. So the next time that you are ready to make a hire, make an investment, or pay yourself more,
00;07;57;17 - 00;08;27;29
Danielle Hayden
face your fear. Step into these numbers with confidence so that you can plan your new revenue goal. We can save till we have that margin of safety or know what we need to make in order for this business to thrive. So here's your homework: I want you to think of one big move you've been considering and ask yourself, what would my new monthly break-even number be if I made this move?
00;08;28;02 - 00;08;58;08
Danielle Hayden
Then what is my new revenue goal to make that sustainable and profitable? Remember, it's break-even plus 10% of profit. Now, if you're not sure how to calculate this, that is where our CFO support team comes in. At Kickstart, we help our clients map all of this out, model the financial impact, and build an action plan not just for break-even, but really thriving and stepping into your role as CEO in your business.
00;08;58;11 - 00;09;20;09
Danielle Hayden
Because we're not just here to build a business that breaks even. We're here to build a legacy. We're here to build wealth. So let's do it with clarity, confidence, and sustainable cash flow. I am so proud of you for tuning into this episode of Business by the Books, and I can't wait to talk to you again next week.
00;09;20;12 - 00;10;04;21
Danielle Hayden
I hope you enjoyed today's episode of Business by the Books. Don't forget to hit like and subscribe! This is the number one way we can help other entrepreneurs find this podcast, because here at Kickstart Accounting, Inc., it is our mission to help entrepreneurs understand their numbers, get access to this information, and grow and thrive in their business. So please help me, help other entrepreneurs understand their numbers so they can finally grow and thrive.