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Know Your Break-Even Point

break-even point

Knowing your break-even point helps you to plan for the long-term. Plus, the more data you have, the better you can run your business. Check out the below to find out just how much it costs for you to keep your doors open.

Determining your break-even point

A break-even point tells how many sales you need to cover expenses (or where it breaks even for a given period). By knowing your break-even point, you can determine how viable your quilt shop is, and if it’s getting weaker or stronger.

The equation for calculating your break-even point (or really when your revenue equals $0 profit) is:

  • Revenue = Cost of inventory (goods) sold + Other expenses + Profit
  • For the equation:
    • Revenue = Sale price per unit x Number of units sold.
    • Cost of inventory (goods) sold = Cost of inventory per unit x Number of units sold (keywords are inventory and sold. Not what’s sitting on your shelves).
    • Other expenses = Sum of all non-variable expenses (or rent, utilities, payroll, insurance, taxes, etc.)

For break-even purposes, profit is $0. If you want a margin of safety, simply chose the number you want as a net and plug that into the equation.

Determining daily business costs

Once you figure out what your break-even point is, you can determine how much it costs to operate per day.

Most quilt shops separate this into two categories: fixed expenses per day and variable expenses per day. Some of these expenses include payroll, rent, utilities, and more. Knowing all of these equations will help you make smarter buying and selling decisions.

Inspiration for this post came from “Know Your Break-Even Point” by Jacob Curtis published in the June 2021 issue of American Quilt Retailer.


If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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Preparing for Tax Season

Tax Season

Tax season is upon us. If you’ve already completed your taxes, great work. If you haven’t, check out some of these tips to tackle your taxes like a pro.

Tax Deductions on Travel Expenses

Many business owners aren’t aware they can deduct taxes from a business trip combined with a vacation. Outlined below are a few examples of deductible travel expenses.

  • New business: Looking for a new location? Travel to and from the location on days meetings happen are deductible.
  • Conferences: This is most often the work and play trip combined into one. Travel to and from the conference is deductible, but days that business doesn’t take place are not deductible.
  • Board meetings: For board meetings to be deducted, there must be a reason why the primary location is not suitable for the event. For example, to get more board members to attend the meeting would qualify.
  • Spouse/Children: Travel for children is typically non-deductible, unless there’s a reason. If your child is your videographer and attends the trip to work with you, then that would qualify as a deductible expense.

Home Office

If you have a home office, the home office deduction won’t cost any more than what you already pay. The home office turns a percentage of your personal home expenses into tax-deductible expenses. Speak with your tax person to calculate the amount of savings this deduction can influence the amount you may owe.

Follow these strategies to get your personal and business income taxes to the lowest legal amount. Stay tuned next week for more tax tips.

Inspiration for this post came from “Tackle Taxes Like a Pro” by Jacob Curtis, CPA, published in the February 2021 issue of American Quilt Retailer.


If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.