Kim T. Blueher, Director of Lending, WESST Corp.

During economically fragile times – when consumers and businesses are holding their collective breath – survival can sometimes be found by fine-tuning key expense areas.  In my household we are eating out less, driving our economy car instead of the more comfortable but gas-hogging SUV, and turning out the lights when we leave a room.

Businesses can also benefit from examining expenses in key areas and cutting costs where possible. They might also respond to a slow market by lowering the selling price of their products or services to spur increased sales. But before a business owner adjusts pricing, he or she needs to be able to answer these questions – how do I know I am operating at a profit, and what are the lowest sales I can have and still break even?

At WESST Corp., we work with many small businesses whose owners have never taken the time to truly account for all the underlying costs of getting their product or service to market. They haven’t identified their breakeven point.

One of my first clients when I started working at WESST in 1990 was a well-known and highly respected artist who made ceramic dishes. She came to WESST for help because even though she was selling well at art and craft fairs, she was having trouble paying her living expenses – things like rent, car payments and even groceries. Once I guided her through a pricing evaluation, she discovered she was only charging about $2.00 on top of the cost of her product. More importantly, she realized she had neglected to add the time of her own labor to her costs.
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