If you're starting a side hustle or new business, you need to know two things: 1. How many sales you need to start making money. 2. When to cut your losses if it's not working. Here's how to figure both out. Step 1: Calculate Your Break-Even Point Break-Even = Your Total Monthly Costs ÷ Your Profit Per Sale Example: - Monthly costs: $500 (software, website, ads, etc.) - You sell a service for $200 - Cost to deliver that service: $50 - Profit per sale: $200 - $50 = $150 Break-Even = $500 ÷ $150 = 3.33 sales So you need 4 sales per month to break even. After that, you're profitable. Step 2: Track Your Real Costs Make a list of everything you spend: - Website hosting - Software subscriptions - Tools you use - Marketing costs - Your time (if you want to pay yourself) Don't forget hidden costs like duplicate charges for tools you forgot you had. Step 3: Set Your "Kill Switch" A kill switch is a clear exit point so you don't waste money endlessly. Pick one of these rules: - Time limit: "If I'm not profitable in 6 months, I'm quitting." - Money limit: "If I spend $1,000 and don't break even, I'm stopping." - Sales limit: "If I can't get 10 customers in 3 months, I'm exiting." Write it down: "I will quit if I don't break even by [date] or after spending $[amount]." This protects you from sinking money into something that won't work. Step 4: Review Monthly Every month, check: - Are you hitting your break-even number? - Are costs rising without more sales? - Do you need to adjust your pricing or exit? The goal is not to be perfect. The goal is to not waste money on something that won't work. Break-even tells you when you're profitable. A kill switch tells you when to stop. What's your break-even number? And what's your kill switch rule?