Читать книгу Removing the Mysteries about Church Finance - Jerry L. Johnson - Страница 18

Breakeven Formula – The breakeven point in revenue (sales, for commercial enterprises) volume is defined as follows: That point in sales volume or revenue, where direct costs have been recovered, fixed overhead expenses have been absorbed and at which profit begins.

Here is the formula expressed with numbers taken from Figure 9-9, Annual Budget Example.

Suppose the church decides to hire an additional office assistant for $300 per week. How would this affect the breakeven amount that has to be reached? Here is the way to calculate the new breakeven amount.

Fixed cost – 251,784

New Hire – 15,600 ($300 x 52 weeks)

New fixed cost – 267,384

New B/E – 506,074

New monthly B/E – 42,172

The new monthly breakeven amount is $2,460 more than before hiring the additional office assistant. The new monthly breakeven amount of $42,172 is within a few dollars of the average monthly income for the church ($56). The question for the church to address is whether they want to obligate church funds to this extent without a reasonable expectation of increasing church income. This formula applies to any enterprise, including churches.

The next question is whether adding that person will result in the ability to add that much revenue. If it does not, then why would (or should) you consider adding the person?

The answer is not whether we will break even, but rather how much we will possibly gain by adding that person.

The cost of the person is a relative certainty, while the benefit (s)he will create is just an estimate. Chances are that the person will cost at least what we thought it would be, and the benefit will be less.

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1There is an important point about 501(c)3 status for a church. They are not required to request 501(c)3 status from the government when they qualify to be a church.