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Chapter 17. Break-Even Analysis

A final step in planning the program’s projected revenue is to examine the minimum number of participants the program must serve to meet the expenses of providing the service. This minimum level is the break-even point. A break–even point is the level of services that have to be provided in order to ensure that the total revenue received equals the total costs associated with delivering the program. Once a break-even point is established, a program can accurately assess if they can achieve surpluses by reviewing the current demand for the service. For example, if the program’s break-even analysis shows that a minimum of thirty (30) participants per quarter are required to meet the level of program expenses, then the demand for services must consistently meet or exceed the break-even point of 30 to ensure sustainability. If the program participant numbers are at or below the break-even point, then it is not recommended that the program proceed in its present state.

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