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You own a software company, and you’re thinking about buying a booth at a technology trade show. You hope to sell your product to trade-show visitors. Before deciding to attend, you benefit from a little breakeven analysis.

You might say to yourself, “I’m not getting on a plane unless I can at least cover all my expenses. How many units do I need to sell to cover all expenses?”

That number is the unit sales needed to reach your goal. Say your application sells for $40 per unit, and you have variable costs of $20 per unit. Fixed costs amount to $1,000. Plug those numbers into the formula:

 Profit ($0) = sales – variable costs – fixed costs

 Profit ($0) = (units × $40) – (units × $20) – $1,000

 Profit ($0) = units × ($40 – $20) – $1,000

 Profit ($0) = units × $20 – $1,000

To finish this little piece of algebra, add $1,000 to both sides of the equation. Then divide both sides by 20: X = 50, or 50 units.

 $1,000 = units × $20

 $1,000 / $20 = units

 50 = units

You need to sell 50 units at $40 per unit. If you don’t think you can sell at least 50 units of software, don’t get on the plane for the trade show.