Budget
Revenues
Costs
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2017: Revenue/Market Share in the global targeted market
2018: Revenue/Market Share in the global targeted market
2019: Revenue/Market Share in the global targeted market
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Variable Costs
Total variable costs depending on the market share on the targeted market for the year 2017
Total variable costs depending on the market share on the targeted market for the year 2018
Total variable costs depending on the market share on the targeted market for the year 2019
Fixed Costs
Total fixed costs depending on the market share on the targeted market for the year 2017
Total fixed costs depending on the market share on the targeted market for the year 2018
Total fixed costs depending on the market share on the targeted market for the year 2019
Revenues and Total Costs
Revenues and total costs for 2017 of BetterWorldBooks
N.B.: Website costs = website creation costs + other website costs = £23.700 + £7.900 = £ 31.600
Break-even point:
To calculate this entity, we had to match the Revenue with the costs for the year 2017 (the same thing can be done for 2018 and 2019). We supposed that the market share is the variable to be identified (market share = ).
Below is the full equation analysis:
𝑅𝑒𝑣𝑒𝑛𝑢 –𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑠𝑡𝑠 =0
↔𝑅𝑒𝑣𝑒𝑛𝑢=𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑠𝑡𝑠
↔ 𝑅𝑒𝑣𝑒𝑛𝑢=𝐹𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠+𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠(𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠) +𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠 (𝑤𝑎𝑟𝑒ℎ𝑜𝑢𝑠𝑒𝑠)
↔1.059𝑥∗106=(31.600+29%∗1.059𝑥∗106)+(1.059𝑥∗106∗35055∗106)+(1.059𝑥∗106∗230055∗106∗60) ↔749𝑥∗106=31.600
↔𝒙= 𝟎,𝟎𝟎𝟒%
To sum-up, BWB Europe needs to reach 0,004% of the total targeted European market in order to break even.