Time to Break Even

Measure the amount of time between the launch of a new product, project, or full entity to when it will start making actual profit.

Sales KPI Examples | Time to Break Even

Overview

The break even point occurs when a project, be it a new product or a complete business model, is not longer a capital drain but an actual source for new capital. As projects cost money to develop and implement, the revenue coming in from the launch will be filling in the gap created by its development, and it will only start to actually make you money once it pays off it’s initial cost. Depending on the total cost and the perceived value of the project, the time to break even will vary.

Formula

Variable costs+fixed costs = Revenue

(Duration in months between the launch date and the BEP for project A + Duration in months between the launch date and the BEP for project B + Duration in months between the launch date and the BEP for project C .... + project N) / Number of projects launched

Reporting frequency

Monthly

Example of KPI target

4 months to BEP

Audience

CEO, CFO, Sales Manager

Variations

Breakeven Point (BEP)

Planned breakeven point to actual breakeven point