Startups often burn through runway because founders lack a clear understanding of their break-even point. This metric defines the exact moment your total revenue equals your total costs (fixed plus variable).
To calculate this, you must ruthlessly categorize your expenses. Fixed costs, like rent and software subscriptions, remain constant regardless of sales volume. Variable costs, such as shipping and payment gateway fees, scale with each unit sold. Lowering your break-even threshold requires either reducing fixed overhead, negotiating cheaper variable inputs, or increasing your unit selling price.