Entrepreneurship is a path to wealth-building available to anyone. Understanding business structures, revenue, costs, and break-even analysis is the starting point.
Sole proprietorship: simplest, you own everything, unlimited personal liability. LLC: limited liability, separates personal and business assets. Corporation (S or C corp): complex, good for investors. Most small businesses start as sole props or LLCs.
Revenue = price × units sold. Fixed costs don't change (rent, insurance). Variable costs scale with output (materials, shipping). Profit = Revenue − Total Costs.
Break-even point = Fixed Costs ÷ (Price − Variable Cost per unit). This is how many units you must sell to cover all costs. Below break-even = loss; above = profit.
A business can be profitable but still fail due to poor cash flow — timing of when money comes in vs. goes out. Businesses need enough cash on hand to pay bills even before customers pay them.
Q1: Break-even = Fixed Costs ÷ ___:
Q2: Fixed costs are costs that:
Q3: A business can fail even while profitable due to poor: