Multi-product break-even analysis

What the multi-product break-even analysis does

Most businesses sell more than one thing, so a single break-even figure misleads. List each product with its price, variable cost and the share of your sales it makes up, and the workbook works out each product's margin, the weighted margin of the mix, the units you must sell to break even, the revenue that implies and how many of each product that is.

Who it is for

Shop owners, restaurants, manufacturers and service businesses that sell several products and want to know how much they must sell to cover rent, wages and other fixed costs.

How to use the workbook

1. Enter your fixed costs for the period.
2. List each product with its price and its variable cost per unit.
3. Enter the share of units each product makes up, so the shares add up to 100 percent.
4. Read the break-even units, the revenue and the units of each product.
5. Save a copy under a new name for each month or year, so earlier records stay as they were.

What is inside

• Margin and margin percentage per product
• Weighted margin across your sales mix
• Break-even units and break-even revenue
• Units of each product at break-even
• A check that the sales mix adds up to 100 percent

The workbook has these sheets: Instructions, Break-even. The main table has the columns Product; Selling price; Variable cost; Margin per unit; Margin %; Share of units sold; Weighted margin; Weighted price. Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.

Tips for getting it right

• Include all fixed costs: rent, salaries, loan repayments, insurance and your own pay.
• Variable costs rise with each sale: stock, packaging, commission, delivery.
• Test a change in the sales mix to see how the break-even moves.
• Update the mix from real sales every month.

Why keep this record

Running a business on memory works until it grows. Writing the numbers down turns opinions into facts you can compare month to month, and shows early which products, customers or costs deserve attention. Even a simple workbook, used every week, usually beats a sophisticated one that is opened once a year.

Questions people ask

Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.

Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.

Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.

Keeping it safe and up to date

A plan is only as good as the numbers you put in. Start with honest estimates, update the workbook as real figures arrive, and compare the two so your next estimate is better. Save a dated copy each month so you can see how your thinking changed.

Read how to build a cash flow forecast for the wider picture. See more business templates or ask us for a custom one.

The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

Related guides, calculators and templates

• Guide: How to build a 12-month cash flow forecast for a small business
• Guide: How to price your products and services: markup, margin and break-even
• Guide: Turnover tax for small businesses in Kenya: rate, limits and when to use it
• Another template: 12-month cash flow forecast
• Another template: Break-even and pricing calculator
• Another template: Budget versus actual tracker

Need something different? Request a custom template, browse all guides or see every Excel template.