Not everyone has a story that runs seamlessly in the new business. There is always some beginner entrepreneur who often stumbles in the early days they start doing business. Usually these are people who think positively and higher excited in starting.

When you find yourself like that too, prepare a financial forecast carefully and notice the signs delivered to you. This step tells you whether your business idea is an idea that is profitable and worth to fighting for or less profitable and less feasible to be realized.

How can you know that a business idea will be a big business that can bring much profit even before you realize it? The answer is, of course not. Uncertainty is what makes the business a risky and frightening. However, because of the uncertainty that only certain people who want to plunge themselves in the business.

But it is not impossible if you want to make a reasonable estimate. Here we can do a simple research called Break Even Analysis (BEA). Although it can not replace the role of a complete business plan, BEA will aid us in determining whether our business idea is worth to fighting for or not.

To conduct a BEA, according to Mike P. McKeever, required four types of estimates:
1. Sales revenues: These estimates include the amount of overall money from sales activities in a business that you generate per month, week, or year.
2. Fixed costs: Sometimes a fixed cost also called the “overhead”. How bad or good your performance, these costs must still be paid regularly. These costs typically include rent, insurance, and other expenses that have been established from the beginning.
3. Gross profit from each sale: This term is defined as the amount of money left from each sale money after paying the direct costs of these sales. For example if you pay $ 500 for a laptop that you sold for $ 800, gross profit was $ 300.
4. Break-even sales income: This section is the amount of money required of your business every week or month to pay the cost of products directly and fixed costs. This revenue does not include any profit.

Many experienced entrepreneurs use the BEA as the first parameter in assessing the feasibility of a new business. A good BEA becomes stepping stone for entrepreneurs to step into the next phase, which is preparing a business plan.

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