Feature: the one number every owner should know
Break-even is the sales level at which revenue exactly covers costs. Separate fixed from variable costs, work out the contribution on each sale, and divide.
The Outlier Brief · Weekly
Volume 1, Edition 13
Do You Know Your Break-Even Point?
Monday, 2 November 2026 Lagos | Abuja
Business IntelligenceFinanceStrategyGovernanceAI Advisory
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Executive summary
What this edition covers.
Higher fuel and input costs have settled into the cost base — and quietly raised the sales every business must make just to cover its costs. This edition explains how to calculate your break-even point (fixed costs ÷ contribution margin), measure your margin of safety, and recalculate at today's costs so you know whether the business is genuinely profitable or merely busy.
Key takeaway
Every business has a sales level at which it finally covers its costs and starts to make money — its break-even point. Most owners have never calculated it. Yet it is one of the most useful numbers a business owns: it tells you the sales you must hit to survive, how much a price or cost change moves that line, and how much cushion you have before a slow month turns into a loss. When costs rise, as they have this quarter, the break-even point rises with them — and the business that does not know where it sits is flying blind.
Key topics covered
Inside Volume 1, Edition 13.
Business intelligence dashboard
Key indicators for Nigerian businesses, current at preparation (week of 27–31 October 2026): inflation, policy rate, official and parallel naira, petrol, Brent crude, external reserves, trade balance and FDI.
Finance School: the break-even point
Lesson 13: break-even is where total revenue equals total costs. Below it the business loses money on the month; above it, each sale adds its contribution to profit.
AI for pricing and margin analysis
Use AI to split fixed from variable costs, calculate contribution by product and test price, volume and cost scenarios — while keeping the commercial judgement in human hands.
Case study: busy but below the line
An illustrative, anonymised restaurant that felt busy yet traded just below break-even — and how a small reprice and cost trims turned a monthly loss into a modest profit.
Break-even checklist and compliance watch
List fixed costs, calculate contribution and break-even, measure your margin of safety, recalculate at today's costs, and diarise October PAYE by 10 November and October VAT by 21 November.
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