break even analysis

[ajm]

hello everybody. Happy almost Friday. (I'm an optimist!)

has anybody out there done any simplified profitability/break even analysis for an earthmoving business or for a wet hire type operation with similar drivers to earthmoving? I'm helping out a friend and I want to capture as much of their costs on paper as possible.

Cheers,

ajm

 

[braindiesel]

I don't have a hard EXCEL nswer for you.
To calculate a break even point, you calculate all of your overhead (fixed costs) that are NOT impacted by the job... rent, leases, fixed salary etc.
You then calculate the incremental or variableexpenses of taking on work... fuel cost, equipment rented for the job, supplies used for the job, etc, and determine the cost of an additional customer.

Your break even point is where your revenue meets your fixed plus variable costs.

You provide some costing and I can try and ut that in a formula for you
Something like
=Fixed cost / (Price of a job - variable cost of a job)

 

[ajm]

Cheers, how to do it is not the problem. Its the content and the costs associated. I am hoping to leverage off the vast network on mrexcel and find someone who works in earthmoving who has a prebuilt shell that I can repurpose. They may even have an existing method of calculating overhead contribution rates and the like.