Sep 222016

As you grow your business, there are several metrics you should be tracking to see how your business is doing. Here is one that is important to know:

Break Even

Break Even is the point where your business begins to make a profit. In the adventure business world, we typically use the number of visitors as the defining break even point. In other words, we need X number of people to come to our aerial park before we start making a profit. Here is an example of a break even chart and graph.


There are three elements to calculating your break even number. The first is your fixed cost. Fixed cost is the money you spend per year whether you are open for business or not and includes things like management salaries, utilities, marketing, and so forth. The number used is the yearly total of all of your fixed costs.

The second number is your variable costs. These are the costs that fluctuate as you get more guests. These can include liability insurance, guide or monitor pay, credit card service fees, etc. Variable costs are represented as the total cost per visitor.

The last number is the unit price. This is the average price you are charging for each participant. Be sure to calculate any discounts or childrens ticket prices into your figure.

As you look at the graph above, the point at which you start making a profit is where the revenue line (green) crosses the fixed plus variable cost line (blue). So in this example, with an average ticket price of $47, we would need about 13,000 visitors to break even.

Break Even is an important number to know for any Feasibility Study or Business Plan!


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