Whether you’re building your first campaign or refining an existing marketing plan, AOF offers the step-by-step guidance, downloadable templates, and expert insights you need to build an effective and efficient business marketing strategy – make every dollar count.

Make Your Business Messaging Matter

Small business marketing doesn’t require a big budget—but it does require a smart strategy.
At Accion Opportunity Fund (AOF), we help entrepreneurs get clear on their audience, sharpen their message, and choose the right channels to grow.

Our free resources are designed for impact—not complexity—so you can build visibility, attract loyal customers, and track what’s working.

---

What You’ll Learn About Business Marketing Strategy:

Building a Small Business Marketing Plan

• Identify your unique value proposition and a compelling brand story
  
• Determine pricing and the social impact of your product or service 
  
• Define your target audience with clarity
  
• Choose goals that align with your growth stage
  

Best Marketing Channels for Small Business

• Digital marketing: SEO, social media, email
  
• Local marketing: events, partnerships, flyers
  
• When and how to use paid ads effectively
  
• How to build a smart social media marketing strategy

Creating Marketing Content That Converts 

• Write compelling offers and headlines
  
• Use testimonials and visuals that build trust
  
• Develop a simple content calendar
  

Small Business Branding on a Budget

• Craft a consistent look, voice, and message
  
• Build awareness without expensive agencies
  
• Quick-start brand guide for small teams
  

Measuring Marketing Investment ROI

• Simple tools to measure marketing ROI
  
• What to look for in Marketing analytics for small business
  
• Adjusting your marketing strategy to boost performance
  
• AI Marketing Tools for Small Business
  

---

Real Success Story: How Smart Marketing Strategies Took Southern Okie from Kitchen to Sam’s Club

Gina Hollingsworth launched Southern Okie Gourmet Spreads from her kitchen, using smart marketing strategies like craft fairs and local events to build early buzz. After selling hundreds of jars at a holiday market, she formalized her business and steadily expanded her reach. Her standout packaging, compelling story, and persistent outreach caught the eye of a Sam’s Club rep, earning her a spot in their Road Show program. With support from AOF and SUSTA, Gina scaled her brand and grew sales by 150%, proving how effective marketing strategies and grassroots exposure can unlock major retail success.

---

Pro Tips from AOF Marketing Advisors

AOF Advisor Tip: Don’t try every channel—do fewer things better. Focus on where your customers already spend time.
AOF Advisor Tip: Good branding is about consistency, not perfection. Use the same fonts, colors, and tone everywhere.
AOF Advisor Tip: If you wouldn’t respond to your own ad, it’s time to rewrite it.

---

Common Small Business Marketing Mistakes to Avoid

Marketing to Everyone is Marketing to No One
Narrow your focus. The more specific your audience, the stronger your message.

Relying Only on Word-of-Mouth Marketing
It’s great when it happens—but you need systems to reach new customers reliably.

Ignoring Your Online Digital Marketing Presence
A free Google Business Profile or simple website can make a huge difference.

Skipping Marketing KPI-Tracking
If you can’t measure it, you can’t improve it. Set specific goals from the start.

---

FAQs About Small Business Marketing

How to spend on marketing a small business?
Start small—5–10% of revenue is typical. Focus on what works and reinvest smartly.

What’s the best marketing strategy for a new business?
Clarity and consistency. Know your customer, keep your message simple, and start with free channels.

Do I need social media to grow my business?
Not always. But it’s often the easiest place to start building brand awareness.

Can I market my business without a website?
Yes—but even a basic landing page increases credibility and conversions.

Where can I get help creating my business marketing plan?
Book a free call with a business advisor from AOF today.

---

Ready to Build a Marketing Plan for Small Business That Works?

Get the clarity, confidence, and tools you need to grow your business. AOF helps you craft a strategy that works for you—free.

---

Why Small Businesses Choose AOF To Help Build Strategic Marketing Plans and More

Real People, Real Marketing Advice for Small Business

Our advisors have helped thousands of businesses like yours define their brand and grow their reach. We don’t do fluff—we deliver action steps.

Free and Always Accessible Marketing Resources 

All our marketing resources are 100% free. No subscriptions, no upsells. Just expert-backed guidance you can trust.

Nonprofit Mission, Real-World Impact

Unlike paid agencies or one-size-fits-all software, we reinvest in entrepreneurs and their communities. Your growth is our mission.

The AOF Difference: Guiding Entrepreneurs Across the Nation Through Successful Business Growth

100% free access to expert-backed marketing strategies

4.5M+ entrepreneurs reached with free resources

35,000+ businesses coached nationwide

$1B+ deployed to help small businesses thrive

At Accion Opportunity Fund (AOF), we help entrepreneurs create business plans that actually work – whether you’re launching a new venture, growing an existing business, or applying for a loan. With our easy-to-use tools, real-world advice, and personalized coaching, you’ll have everything you need to build a business plan with clarity and move forward with confidence.

Plan for Business Growth. Pitch with Confidence.

A strong business plan does more than check a box for lenders or investors – it lays the foundation for every smart business decision you’ll make. Whether you’re just getting started or fine-tuning your strategy, AOF gives you the free tools, templates, and expert support to map out your vision and make it real.

---

Key Business Plan Topics

What Is a Business Plan & Why It Matters

• Define your goals, market, and financial model
  
• Use your plan to stay focused and aligned as you grow
  
• Learn how a strong plan can help secure funding or grants
  

Business Plan Sections Explained

• Executive Summary: Summarize your vision and value
  
• Business Description: Define your mission and legal structure
  
• Market Analysis: Understand your competitors and audience
  
• Organization and Management: Company’s structure, team roles and operating expenses
   
• Products and Services – Understanding the value of your offering
  
• Sales and Marketing: Outline how you’ll attract and retain customers
  
• Funding Request: how much you need, how that may change over five years, and how the funds will be used 
  
• Financial Plan: Project income, expenses, and cash flow
  
• Appendix (optional): team member resumes, product photos, copies of legal documents
  

Different Types of Business Plans

• Startup Business Plans: Built for early-stage entrepreneurs
  
• Business Growth Plans: For expanding operations or opening new locations
  
• Lean Business Plans: A faster, lighter format for internal use
  
• Business Loan-Ready Plans: Optimized to meet lender expectations
  

When & How to Update Your Business Plan

• Annual reviews and milestone tracking to grow smarter and stay profitable
  
• Pivoting based on new market data, industry research or customer needs
  
• Tools to adjust your financial projections or goals
  

---

Real Success Story: Building a Business Plan with Purpose – How Wing Suite Took Flight

Kartisha Henry, founder of Wing Suite in Atlanta, turned her vision into a thriving restaurant by grounding her growth in a clear and strategic business plan. Drawing from her Army background and logistics experience, she conducted extensive research, developed a strong brand, and used insights from programs like AOF’s Restaurant Accelerator with DoorDash to refine her plan. Her intentional approach helped her navigate industry challenges, expand to a second location, and build a loyal team and customer base. Kartisha’s journey shows how a solid business plan – rooted in preparation, purpose, and adaptability – can turn a passion into a scalable, community-driven success.

---

Pro Tips from AOF Business Advisors

AOF Advisor Tip: Start simple. You don’t need a 40-page business plan – just something clear enough to guide your next steps.
AOF Advisor Tip: Revisit your business plan quarterly. It should be a living document, not a one-time task.
AOF Advisor Tip: Tie your business goals to real numbers – revenue, customers, or hours saved.

---

Common Business Planning Mistakes to Avoid

Not Writing It Down

Thinking through your plan is good – writing it down is better. A written plan helps clarify your ideas and make your vision real.

Making It Too Complicated

Don’t get stuck trying to be perfect. Start with a simple, clear plan you can build on.

Skipping the Financials

Even a rough budget can help you make better decisions and spot problems before they start.

Using a Generic Template Without Customizing It

Your business is unique. Make sure your plan reflects your voice, your goals, and your market.

---

Business Plan FAQs

What’s the difference between a business plan and a pitch deck?
A pitch deck is a visual summary; a business plan is a full document detailing operations, market, and financials.

Can I write a business plan without a lot of data?
Yes – start with what you know and use estimates. Your plan will grow over time.

Do I need a business plan to get a loan?
While some business lenders may require one, AOF does not!

Who can help me with my business plan?
Register for group business coaching sessions where you can learn the fundamentals of starting your own business.

---

Ready to Write a Plan That Moves Your Business Forward?

Accion Opportunity Fund makes it easy to start, update, or refine your business plan – with expert advice every step of the way.

---

Why Choose AOF for Business Planning Support?

Nonprofit Mission – Built for Real Business Owners

We don’t serve shareholders – we serve entrepreneurs. As a nonprofit, every resource we provide is designed to create impact, not profit. Our business planning tools reflect the real challenges business owners face – not just what looks good in a pitch deck.

Human Support – Free Business Advising

Business planning can be overwhelming, but you don’t have to do it alone. Our advisors provide simple, actionable guidance to help you clarify your goals, sharpen your plan, and get ready to grow – at no cost.

Accessible Tools – Free, Flexible & Proven

No subscriptions. No paywalls. Just open access to the best small business planning resources on the web – available when you need them, and designed to grow with you.

---

Powered by 30 Years of Business Planning + Lending Experience

100% of our planning tools are free, practical, and proven

$1 billion+ deployed in nearly 35,000 loans

4.5M business owners served through our free resource library

35,000+ entrepreneurs supported through coaching and events

67% of business owners with lower credit scores improve their credit to a decent or good level by the time they finish paying off their loan

Whether you’re just exploring a business idea or ready to register your LLC, we’ve got your back. From planning and legal setup to licenses, branding, and funding – we offer free resources and real-person support to help you launch with clarity and confidence.

---

Launch Your Dream With a Clear Business Plan

Starting a business can feel overwhelming – but with the right structure and support, it doesn’t have to be. At Accion Opportunity Fund (AOF), we simplify the process. Our free, founder-friendly tools walk you through each step of the startup journey, from idea validation to your first customer. Everything here is designed to help new business owners avoid costly mistakes, build efficiently, and start strong.

---

Key Startup Business Topics

What to Know Before Starting a Business

• Is entrepreneurship right for you?
  
• Understanding risk, resilience, and startup time commitments
  
• Setting smart business goals that match your lifestyle and values
  

How To Start a Legal Business: First Steps

• Choosing a business structure: LLC, sole proprietorship, partnership
  
• Registering your business name
  
• Getting an EIN (Employer Identification Number)
  
• Licenses, permits, and zoning
  

How to Write a Simple Startup Business Plan

• Clarify your value proposition and ideal target market
  
• Plan your budget, startup costs, and revenue projections
  
• Set realistic 6-month and 12-month goals
  

Opening a Business Bank Account & Managing Finances

• Why business and personal finances should be separate
  
• Choosing a business bank account
  
• Basic bookkeeping and tax readiness
  

Building Your Brand & Online Presence

• Picking a business name and securing your domain
  
• Setting up Google Business Profile and business social media pages
  
• Logo, visual identity, and basic marketing plan
  

How To Get Funding For Your Startup

• Different types of Business Loans; Self-funding, microloans, and grants
  
• Business Loan Borrower Checklist
  
• What investors and lenders look for in new businesses

---

Real Success Story: Starting a Business with Purpose

How Coolhaus Grew from a Side Hustle to a National Brand

Natasha Case turned a playful idea – combining food and architecture – into Coolhaus, a bold ice cream brand launched during the Great Recession. With no business experience, she and her partner sold architect-themed ice cream sandwiches from a towed truck at Coachella. When traditional lenders wouldn’t help them grow, Accion Opportunity Fund stepped in to finance their fleet. That early support helped Coolhaus expand nationally. Now in 6,000+ stores, Natasha credits AOF for helping her start and scale a purpose-driven business.

Read More Success Stories

---

Pro Business Tips from AOF Advisors

AOF Advisor Tip: Don’t wait for everything to be perfect – start with what you have and test fast.

AOF Advisor Tip: Even small side hustles should be set up properly to avoid tax or legal issues later.

AOF Advisor Tip: Set 30-day, 90-day, and 1-year goals to keep your launch focused and measurable.

---

Top Startup Mistakes to Avoid

Skipping the Legal Setup
Don’t operate without registering. It protects you and makes you eligible for funding.

Not Budgeting for Start-Up Costs
Even a lean business needs capital. Plan ahead to avoid early cash flow problems.

Doing Everything Alone
Find mentors, join support groups, and talk to advisors. Entrepreneurship doesn’t have to be lonely.

Waiting Too Long to Launch
Start small, test your idea, and iterate. Waiting for perfection can kill momentum.

---

FAQs About Starting a Business

How much money do I need to start a business?
It depends on your industry, but even small startups should plan for 3–6 months of expenses.

Do I need to write a business plan?
Yes – a simple plan helps clarify your ideas and prepare for funding.

How do I know which business structure is right for me?
Our free quiz and guide can help you decide between LLC, sole proprietorship, and more.

Can I get funding without a business history?
AOF provides funding for early-stage businesses. We also help you build a loan-ready profile.

Where can I get help with my startup plan?
Schedule a free session with an AOF business advisor.

---

Ready to Launch Your Business?

Start smart. AOF gives you free tools, expert guidance, and step-by-step support – so you can build with confidence

---

What Makes AOF Different from other Startup Business Lenders?

Practical Business Help for Real Entrepreneurs

Starting a business isn’t just about vision – it’s about execution. Our resources are made by people who’ve been in your shoes. You won’t find corporate jargon or gatekept tools here – just practical help that works.

Business Coaching from Real People

Talk to a real person, for free. Our advisors offer guidance on launching, registering, planning, and marketing. You get personalized support – no pressure, no pitch.

100% Free and Transparent Business Resources

All our resources are free. No subscriptions, no paywalls. And if you’re exploring business loan funding, our nonprofit lending model means fair terms and honest advice – always.

---

AOF by the Numbers: Trusted by Business Entrepreneurs Nationwide

67% of subprime borrowers become near-prime or better by loan payoff

$1B+ deployed in loans to small businesses

35,000+ entrepreneurs supported with coaching and training

4.5M+ business owners served through our free resource library

100% of tools and templates available for free

107,000+ jobs supported through lending and NMTC

At Accion Opportunity Fund (AOF), we help you tackle the everyday challenges of business ownership – from managing people and streamlining operations to planning for long-term growth. Through personalized advising, on-demand learning, grant opportunities, and a robust Business Resource Center, you’ll find the clarity and support you need to lead with confidence and make decisions that move your business forward.

Business Building Starts Here. Lead with Confidence.

Running a business means wearing many hats – from managing teams and setting goals to tracking performance and navigating constant change. That’s why Accion Opportunity Fund (AOF) offers free, expert-backed support to help you lead with confidence and grow with intention.

On this page, you’ll find actionable business management strategies, downloadable templates, and personalized business coaching – all at no cost, and all designed by people who’ve walked in your shoes.

---

Key Business Management Topics

Setting Clear Goals and Tracking Progress

• Define SMART business goals tied to revenue, operations, or customer success
• Build dashboards or use checklists to track monthly progress
• Set OKRs (Objectives & Key Results)

Team Management and Delegation

• Learn to hire, onboard,train and manage team members effectively
• Improve internal communication with clear roles and SOPs
• Use our team productivity tracker to assign and monitor tasks

Decision-Making with Financial Data

• Understand your business’s key financial indicators
• Use data to guide inventory, staffing, and pricing decisions
• Calculate your break-even point

Systems and Operations

• Identify where your processes break down and how to fix them
• Learn to document workflows so your business runs without you
• Explore time-saving software options vetted by real business owners
  

---

Real Success Story: Effective Business Management Helped Romares Apparel Grow from Game Days to Long-Term Success

Sheneka launched Romares Apparel in 2017, starting small but managing growth strategically through persistence, smart financial decisions, and community support. Despite early discouragement and funding rejections, she maintained control of her business by reinvesting personal savings and leveraging emergency relief during COVID-19. Through AOF’s partnership with FedEx, , she sharpened her digital marketing strategy, built a supportive network, and secured a grant to scale operations effectively. Today, Sheneka is expanding with a long-term growth plan, showcasing how thoughtful business management can turn setbacks into sustained success.

AOF Advisor Tips

AOF Advisor Tip: Never manage your team without a written process. Even a simple one-page SOP makes onboarding 10x easier.

AOF Advisor Tip: Track your business tasks weekly – not just your financials. Operations are what keep you afloat.

AOF Advisor Tip: Set one monthly priority. If everything is a priority, nothing is.

Common Mistakes in Business Management

Winging It Without a Plan
Running a business without a clear plan often leads to confusion, wasted time, and stalled growth. Take time to outline your top goals for the month and break them into weekly action steps. A simple check-in system – whether with your team or yourself – helps keep progress on track and priorities aligned.

Avoiding Hard Conversations
Many business owners shy away from giving tough feedback, but silence can create bigger problems. Being clear and direct with your team builds trust, accountability, and a culture of growth. The earlier you address issues, the easier they are to solve – and the more respect you earn as a leader.

Trying to Do It All Yourself
Wearing every hat might work at the beginning, but it’s not sustainable. Delegating tasks to others: whether employees, contractors, or advisors – frees up your time to focus on what really moves your business forward. Burnout is not a badge of honor; it’s a barrier to long-term success.

---

Business Management FAQs

What if I don’t have employees yet?
These resources help solo founders manage time, operations, and prepare to scale.

Do I need business software to improve management?
Not necessarily. Start with paper checklists or spreadsheets – then scale up as needed.

How can I get help with my management challenges?
Schedule time with an AOF business advisor for free one-on-one guidance.

Is this for new or established businesses?
Both. Our templates and tools work whether you’re hiring your first employee or leading a growing team.

Free Resources to Strengthen Your Business Management

6 Tips for Small Business Management

Organization and Management

Business Finance 101

Key Financial Metrics for Business Growth

Cash Flow Management

How Small Businesses Can Collaborate to Grow

---

Ready to Build Smarter, Stronger Business Operations?

Let AOF help you manage smarter, not harder. Talk to an advisor who can help you streamline for future success.

---

Why Choose AOF for Business Management Support?

Nonprofit Mission, Practical Help

Accion Opportunity Fund isn’t here to generate profits – we’re here to generate impact. Our resources are built by and for real small business owners, reflecting the realities and challenges entrepreneurs face every day. As a nonprofit, we reinvest every dollar into tools, training, and lending programs that help communities thrive – not into shareholder pockets.

Real People. Real Advice. Real Business Advising

Our advisors understand the real-world pressures of running a business – and they’re here to help. Whether you’re managing a team, planning for growth, or solving daily challenges, AOF’s experts offer simple, actionable guidance you can actually use. No confusing buzzwords or one-size-fits-all playbooks – just honest advice tailored to your business.

Free & Accessible Resources To Grow Your Business

Everything we offer is completely free, because we believe that cost should never be a barrier to business success. There are no subscriptions, hidden fees, or paywalls – just open access to proven tools, templates, and training. From checklists to coaching, it’s all designed to be easy to use and ready when you need it.

Effective Business Management – Powered by 30 Years of Lending Experience

For over 30 years, AOF has supported small businesses with trusted loans and resources.

• $1 billion+ deployed in nearly 35,000 loans
  
• In FY24 alone: $97 million disbursed to 1,699 businesses
  
• 4.5M small business owners have accessed our free Business Resource Library
  
• 35,000+ used our coaching, events, and technical assistance
  
• 107,000+ jobs supported through business lending and the New Market Tax Credit Program (NMTC)
• 67% of business owners with lower credit scores improve their credit to a decent or good level by the time they finish paying off their loan

Reaching this point (and moving beyond it) is a key measure of financial health.

In fact, understanding break-even can be a gamechanger. By knowing exactly when you’ll stop losing money and start making it, you gain confidence to make informed decisions for your business’s future.

Key Takeaways:

• Break-even point is reached when total revenue equals total costs – the business is neither losing nor making money.
• Calculating break-even (in units or dollars) requires knowing your fixed costs, variable costs, and contribution margin per unit.
• Break-even analysis is a powerful tool for pricing, financial planning, and decision-making, removing guesswork and highlighting the path to profitability.
• Benefits: Helps set profitable pricing, plan sales targets, control costs, and assess the viability of new projects or expansions.
• Strategies to lower break-even: Reduce fixed or variable costs, or increase prices (while balancing customer demand) to reach profitability faster.
• Avoid common mistakes: Don’t overlook hidden expenses, use realistic sales forecasts, and update your break-even calculations regularly.
• Accion Opportunity Fund (AOF) offers more than loans – with business advisors, educational resources, and community support – to help you apply break-even analysis and accelerate your journey to profit, unlike many competitors.

What Is the Break-Even Point and Why Does It Matter?

The break-even point (BEP) is the moment your business’s total revenue exactly covers its total costs. At break-even, you’re not losing money, but you’re not making a profit either – it’s the threshold where your business “breaks even” on expenses​. In practical terms, if your company’s break-even point is $50,000 in monthly sales, then at $50,000 you have paid all your bills and costs for the month, but you haven’t made a dime of profit yet. Every dollar beyond that is profit; every dollar below means a loss.

Why is this important? For one, achieving break-even is a major milestone for a new business – it signals you’ve built enough revenue to cover ongoing costs​. But beyond that, break-even analysis is a fundamental piece of financial planning for businesses of all sizes. It forces you to quantify your costs and sales in a realistic way.

According to a CB Insights report, 29% of startups fail because they run out of cash, and 18% fail due to pricing or cost issues.

These are problems that rigorous break-even analysis can help prevent by ensuring you understand how your prices and costs translate into profitability. Knowing your break-even point helps you anticipate when your cash flow will turn positive, so you can plan for the cash you’ll need to get there.

Break-even analysis also provides a clear goal for your team. It answers the question: “How much do we need to sell to not lose money?” This can be incredibly motivating and focusing. Instead of guessing, you have a concrete sales target to aim for each month or quarter to cover costs. For example, imagine you run a small bakery.

After crunching the numbers, you determine that you need to sell 300 cupcakes per month to break even. With that knowledge, you can set weekly sales targets (about 75 cupcakes a week) and devise marketing strategies to hit that number. It gives you clarity and control over your business’s trajectory, rather than flying blind.

Moreover, understanding break-even is essential when seeking funding. Investors and lenders want to know when your business will turn profitable. If you can demonstrate a well-reasoned break-even analysis in your business plan, it builds confidence.

As AOF’s own business plan guide notes, once you know your expenses, you can determine how much you need to earn to break even​. Showing that you’ve done this homework makes it more likely others will want to fund your business. In short, the break-even point is more than just a number on your financial statements – it’s a vital milestone and planning tool that can influence everything from daily decisions to long-term strategy.

Understanding Fixed and Variable Costs (and Contribution Margin)

To calculate a break-even point, you first need to understand your cost structure. All business costs fall into two broad categories: fixed costs and variable costs. These terms might sound like accounting jargon, but they’re actually straightforward:

Fixed Costs

These are expenses that stay the same no matter how much you sell. In other words, they don’t go up or down based on how busy your business is. Common fixed costs include rent, salaries, insurance, loan payments, and utilities. You pay these costs regularly—even if you don’t make a single sale that month. For example, if your rent is $1,000, it stays $1,000 whether you serve 100 clients or none. These are the baseline expenses your business has to cover before you even think about profit.

Variable Costs

Variable costs change depending on how much you sell. These include the costs of materials, packaging, shipping, hourly labor, or commissions. For instance, if you run a T-shirt shop, the fabric and printing cost for each shirt is a variable cost. Sell more shirts, and your costs go up. Variable costs are usually counted per item or per service sold. So if it costs $5 to make one shirt, that $5 is your variable cost per unit.

What Is Contribution Margin?

Contribution margin is the amount each sale adds to covering your fixed costs—and eventually, to your profit. It’s calculated by subtracting your variable cost per unit from the selling price per unit. For example, if you sell something for $50 and it costs you $30 in materials and labor, your contribution margin is $20. That $20 helps pay off your fixed costs first. After those are covered, the rest becomes profit.

Understanding these costs is crucial because break-even analysis hinges on how sales revenue covers fixed and variable costs. This is where the concept of contribution margin comes in. Contribution margin is typically defined as selling price per unit minus variable cost per unit. It tells you how much each unit sold contributes to covering fixed costs (and then to profit, once fixed costs are covered).

For instance, if you sell a product for $50 and it costs you $30 in variable costs to produce (materials, direct labor, etc.), the contribution margin is $20 per unit. That $20 from each sale goes toward paying down your fixed expenses. Once all fixed costs are covered, that $20 per unit will contribute to profit.

You can also express contribution margin as a ratio or percentage of the selling price. In the above example, $20 is 40% of the $50 price – so the contribution margin ratio is 40%. This ratio is useful for calculating break-even in sales dollars (which we’ll do shortly). The higher your contribution margin (either by having a high price or low variable cost), the fewer units you’ll need to sell to break even, because each sale gives you more “fuel” to cover fixed costs. Conversely, a low contribution margin (due to low pricing or high variable costs) means you need a larger volume of sales to reach break-even.

Let’s summarize with a quick example of costs and contribution margin in action: Suppose you own a handmade soap business. Each bar of soap sells for $5. The materials (oils, fragrance, packaging) cost you $2 per bar, and it takes an hour of labor (yours or an employee’s) to produce 10 bars, which works out to $0.50 labor cost per bar. In total, the variable cost per soap is roughly $2.50. Your fixed costs (studio rent, website fees, insurance) are $1,500 per month. The contribution margin per soap is $5 – $2.50 = $2.50. That means each bar sold brings in $2.50 to cover fixed expenses. Knowing these numbers, you’re ready to calculate the break-even point for your business.

How to Calculate Your Break-Even Point (Formula & Examples)

Calculating the break-even point is relatively simple once you have your cost figures. There are two main ways to express the break-even point: in units (how many units of product or hours of service you need to sell) or in sales dollars (how much revenue you need). Both are useful – units help with setting sales quotas, while the sales dollar figure is great for high-level financial planning. We’ll cover both.

Break-Even Point in Units

This tells you how many products or services you need to sell to break even.

Formula:

Fixed Costs

These are expenses that stay the same no matter how much you sell. In other words, they don’t go up or down based on how busy your business is. Common fixed costs include rent, salaries, insurance, loan payments, and utilities. You pay these costs regularly—even if you don’t make a single sale that month. For example, if your rent is $1,000, it stays $1,000 whether you serve 100 clients or none. These are the baseline expenses your business has to cover before you even think about profit.

Variable Costs

Variable costs change depending on how much you sell. These include the costs of materials, packaging, shipping, hourly labor, or commissions. For instance, if you run a T-shirt shop, the fabric and printing cost for each shirt is a variable cost. Sell more shirts, and your costs go up. Variable costs are usually counted per item or per service sold. So if it costs $5 to make one shirt, that $5 is your variable cost per unit.

What Is Contribution Margin?

Contribution margin is the amount each sale adds to covering your fixed costs—and eventually, to your profit. It’s calculated by subtracting your variable cost per unit from the selling price per unit. For example, if you sell something for $50 and it costs you $30 in materials and labor, your contribution margin is $20. That $20 helps pay off your fixed costs first. After those are covered, the rest becomes profit.

Understanding these costs is crucial because break-even analysis hinges on how sales revenue covers fixed and variable costs. This is where the concept of contribution margin comes in. Contribution margin is typically defined as selling price per unit minus variable cost per unit. It tells you how much each unit sold contributes to covering fixed costs (and then to profit, once fixed costs are covered).

For instance, if you sell a product for $50 and it costs you $30 in variable costs to produce (materials, direct labor, etc.), the contribution margin is $20 per unit. That $20 from each sale goes toward paying down your fixed expenses. Once all fixed costs are covered, that $20 per unit will contribute to profit.

You can also express contribution margin as a ratio or percentage of the selling price. In the above example, $20 is 40% of the $50 price – so the contribution margin ratio is 40%. This ratio is useful for calculating break-even in sales dollars (which we’ll do shortly). The higher your contribution margin (either by having a high price or low variable cost), the fewer units you’ll need to sell to break even, because each sale gives you more “fuel” to cover fixed costs. Conversely, a low contribution margin (due to low pricing or high variable costs) means you need a larger volume of sales to reach break-even.

Let’s summarize with a quick example of costs and contribution margin in action: Suppose you own a handmade soap business. Each bar of soap sells for $5. The materials (oils, fragrance, packaging) cost you $2 per bar, and it takes an hour of labor (yours or an employee’s) to produce 10 bars, which works out to $0.50 labor cost per bar. In total, the variable cost per soap is roughly $2.50. Your fixed costs (studio rent, website fees, insurance) are $1,500 per month. The contribution margin per soap is $5 – $2.50 = $2.50. That means each bar sold brings in $2.50 to cover fixed expenses. Knowing these numbers, you’re ready to calculate the break-even point for your business.

How to Calculate Your Break-Even Point (Formula & Examples)

Calculating the break-even point is relatively simple once you have your cost figures. There are two main ways to express the break-even point: in units (how many units of product or hours of service you need to sell) or in sales dollars (how much revenue you need). Both are useful – units help with setting sales quotas, while the sales dollar figure is great for high-level financial planning. We’ll cover both.

Break-Even Point in Units

This tells you how many products or services you need to sell to break even.

Formula:

You’re dividing your fixed costs by your contribution margin per unit (selling price minus variable cost per unit). Here’s how it works in action:

Example:
Let’s say you run a handmade soap business.

• Fixed costs: $1,500/month
  
• Selling price: $5/bar
  
• Variable cost: $2.50/bar
  
• Contribution margin: $2.50/bar
  

Break-Even Point = $1,500 ÷ $2.50 = 600 unit

So, you need to sell 600 bars of soap in a month to cover your $1,500 in fixed expenses. At 600 units, you’ll bring in $3,000 in revenue, spend $1,500 on variable costs, and break even — zero profit, but zero loss.

Break-Even Point in Sales Dollars

If you’re selling different products or offering services where “units” are hard to define, calculating break-even in sales dollars is more useful.

Formula:

Example using the soap business:

• Price = $5
  
• Variable cost = $2.50
  
• CM ratio = $2.50 ÷ $5 = 0.5 (or 50%)
  
• Fixed costs = $1,500
  

Break-Even (Sales $) = $1,500 ÷ 0.5 = $3,000

Again, same result — $3,000 in revenue needed to break even. Half of each dollar earned goes toward fixed costs, so you need twice your fixed costs in revenue.

Unsurprisingly, this matches the 600 units * $5 per unit = $3,000 revenue we found earlier. If your business can generate $3,000 in sales in a month, it will cover its $1,500 fixed costs (since half of each dollar goes to fixed costs at a 50% CM ratio, you need double your fixed costs in revenue).

For another example, imagine a consulting business with $5,000 of fixed costs per month (office rent, salary, software) and virtually no variable costs (since it’s mostly your time). If you charge $100 per hour for consulting, each hour’s fee is almost entirely the contribution margin (assuming negligible variable cost, CM ratio ~100%). The break-even in dollars would be $5,000 / 1.0 = $5,000, which is 50 billable hours at $100/hr. So you’d know you need to bill about 50 hours a month to cover your overhead.

Most businesses will calculate break-even for a given period (usually per month or per year) as part of their financial planning. If you have seasonal fluctuations, you might do separate break-even analyses for peak season vs. slow season. If you’re preparing a business plan, you’ll project when, in time, the business will break even – e.g., “By month 6, we expect to break even, selling 1,000 units per month at $10 each.” These projections help you determine how much funding or savings you need to sustain the business until that point.

Pro tip: There are many tools to simplify break-even calculation. The U.S. Small Business Administration offers an online break-even calculator​, and templates in Excel or Google Sheets can do the math for you. Essentially, you input your fixed costs, variable cost per unit, and price, and the calculator will spit out the break-even point. Some calculators even let you play with the numbers – for instance, “What if I increase the price by 10%? How does my break-even change?” This kind of scenario testing is incredibly useful, which leads us to the next topic: how to use break-even analysis in running your business.

Benefits of Break-Even Analysis for Your Business

Conducting a break-even analysis offers numerous practical benefits. It’s not just an academic exercise for your accountant – it’s a decision-making tool that can guide your strategy and day-to-day operations.

Here are some of the key benefits and uses:

Sets Clear Sales Targets

Break-even analysis gives you a specific sales goal — the point where your revenue covers all your costs. That clarity helps you and your team stop guessing and start aiming. For small businesses, knowing the minimum sales you need each month can be empowering. It becomes your no-fail number — hit it, and you’re in the clear. Surpass it, and you’re making profit.

Informs Pricing Strategy

Understanding your break-even point shows how pricing affects your bottom line. Raise your prices, and you’ll likely need fewer sales to break even — but you also risk scaring off customers if the value doesn’t feel right. This is where break-even analysis helps you experiment. It tells you how many units you must sell at different prices to stay afloat, which helps avoid underpricing. For many business owners, it’s the wake-up call that their current pricing model just doesn’t work — and where the adjustments need to begin.

Aids Cost Control and Profit Planning

When you run your break-even numbers and see you need 1,000 sales a month just to break even, it might highlight a bigger issue: your costs are too high. This is where the analysis starts showing its value beyond theory. It prompts you to examine both fixed and variable costs — and find ways to trim fat. Maybe it’s negotiating a better lease, switching vendors, or cutting unused software subscriptions. You can also test how lowering specific costs could impact your break-even point and profitability.

Improves Decision-Making for New Investments

Thinking of buying new equipment, hiring staff, or launching a new product? Break-even analysis should be part of your planning. You can figure out how long it would take to recover the costs and whether the extra expenses will really pay off. For instance, if a new machine cuts costs per unit but adds monthly overhead, you can calculate exactly how many more units you’d need to sell to justify the investment. Many businesses used this approach during the pandemic to evaluate survival strategies — and it’s just as useful for growth plans.

Helps in Setting “Go/No-Go” Milestones

If you’re launching something new, break-even analysis can tell you upfront if your idea is financially realistic. Maybe your projections show you’ll need to sell 10,000 units in the first year to break even — but your market size or marketing budget can’t support that. That’s a red flag. On the flip side, if your break-even is low and within reach, it’s a green light to move forward confidently. This tool helps keep your goals grounded in financial reality.

Enhances Financial Communications

Break-even numbers are easy to explain to investors, lenders, or even team members. Saying “We need to sell 100 units to cover our costs” is clear and concrete. It signals that you understand your business finances and are tracking what matters. Lenders love to see low or attainable break-even points — it tells them you’re not reliant on constant external funding to stay afloat, which makes you a safer bet.

Provides a Margin of Safety

Once you know your break-even point, you can calculate your “margin of safety” — how far above break-even you are. If your monthly sales are $60,000 and your break-even is $50,000, you’ve got a $10,000 cushion. That margin gives you flexibility. You can handle a dip in sales, try a risky campaign, or plan for a seasonal slowdown without panicking. It’s a buffer that helps you sleep better — and act smarter.

Break-even analysis is far more than just calculating a number when you launch your business. It’s an ongoing tool that offers clarity and insight. It ties together your pricing, cost control, sales efforts, and growth strategies into one coherent picture. As one CEO put it,

Figuring out your break-even point helps you know how much you need to sell to cover your costs — so you can start making real profit.

It keeps you grounded in reality while you chase the vision of higher profits.

Practical Applications: Using Break-Even Analysis in Real-World Scenarios

How do businesses actually use break-even analysis in day-to-day or strategic decisions? Let’s explore a few real-world use cases where calculating the break-even point can guide business owners:

Launching a New Product or Service

Before you roll out something new, it’s smart to run a break-even analysis just for that product or service. Add up all the related costs — like production, design, marketing, and any new tools or equipment needed — and calculate how many sales you need to cover them. This gives you a clearer picture of your sales goals and pricing options. For example, if a restaurant wants to add a new dish but needs $5,000 in kitchen upgrades to support it, break-even math can tell you how many plates of that dish you need to sell (and at what price) to break even on that investment. If the number feels out of reach, maybe the timing isn’t right, or you need to adjust your approach.

Expanding to a New Location or Channel

Opening a second shop? Launching an e-commerce site? Both moves come with new fixed and variable costs — from rent and staff to inventory and fulfillment. A break-even analysis will show you how much revenue the new location or channel needs to bring in just to pay for itself. Say the new store needs to generate $50,000 a month to break even — now you can realistically assess if the neighborhood foot traffic supports that. Same goes for going digital: think of website hosting, shipping costs, and paid ads. Take Jill, an AOF client who moved her beauty business online — chances are, she and her AOF advisor worked out a break-even plan for covering site and shipping costs. That gave her the confidence to scale up smartly.

Changing Your Business Model

Maybe you’re considering shifting from selling wholesale to a direct-to-consumer setup — or switching to subscriptions. These kinds of changes totally affect your revenue timing and cost structure. That’s where break-even analysis becomes a reality check. Let’s say you’re thinking about monthly subscription boxes instead of single sales. Revenue would come in smaller chunks over time, but customer acquisition might be cheaper in the long run. A break-even plan here might factor in how many subscribers you’d need (and how long they need to stick around) to make the model work. It’s a way to test the waters before making a big leap.

Adjusting Prices or Offering Discounts

Changing your price? Offering a sale? Don’t guess — run the numbers. Break-even analysis helps you see how pricing impacts profitability. If your product normally sells for $50 and has a $30 variable cost, you make $20 per sale. Drop the price to $45, and now you’re only making $15 per sale. To cover the same fixed costs, you’ll need to sell more — roughly 33% more, just to break even. That’s a big jump. Will your sale bring in enough extra customers to make up for it? On the flip side, if you raise your price, break-even math helps you figure out how much your sales could drop before you lose profit. This kind of analysis makes pricing decisions feel a lot less like guesswork and a lot more like strategy.

If you spend less to make or deliver each sale, or charge a little more, you won’t have to sell as much to start making a profit.

Lowering variable costs or increasing the selling price can reduce the break-even point, making it easier to become profitable.

Charging more can help you earn more, but it might scare off some customers — it’s all about finding that sweet spot.

Use break-even tools to strike the right balance between price, cost, and volume.

Planning for Slow Periods or Seasonality

Almost every business faces slow months. Whether you’re running a toy store with booming holiday sales or a landscaping business that slows in winter, break-even analysis helps you plan ahead. Instead of applying one yearly break-even point, run the numbers for each season. If you know you usually need to sell 1,000 units a month to break even, but expect only 500 sales in January, you can anticipate that shortfall and prepare — either by budgeting cash reserves from stronger months or planning promotions to bump up sales during the slump.

The real benefit? You won’t be caught off guard. Break-even forecasting gives you the visibility to ride out low seasons without panic. You might even decide to add a temporary revenue stream or reduce marketing spend during those slow months — and use the busy seasons to build your buffer.

Evaluating Efficiency Improvements

Thinking about investing in automation or outsourcing? Before making a big move, use break-even analysis to run the math. If you’re adding new equipment, you’ll likely increase fixed costs — say, a monthly lease or maintenance fee. But you might also reduce variable costs by cutting labor or material waste. Depending on your current volume and margins, this trade-off could either help or hurt your profitability.

If your sales volume is already strong, lowering variable costs will boost profits on every additional unit sold — making the investment worthwhile. But if you’re barely hitting break-even now, raising your fixed costs could make it even harder to stay above water. Run the numbers. It’s better to know upfront than to realize later that your fancy new machine actually added pressure instead of relief.

Assessing Overall Business Health

Your break-even point isn’t a one-and-done calculation — it’s a health check for your business. Over time, tracking how your break-even shifts can tell you a lot. If your break-even sales volume is climbing year after year, it could mean expenses are growing faster than revenue. Maybe your rent went up, or your supplier prices spiked. Either way, that’s a warning flag to act before it erodes your profitability.

Ideally, as your business grows, your break-even should stay manageable — or even improve — because you’re optimizing costs and increasing margins. Regular check-ins with your break-even math help you stay on top of these trends. You’ll be quicker to adjust prices, trim costs, or rethink your strategy when the numbers start shifting. It’s less about reacting and more about staying in control.

In all these scenarios, break-even analysis is like a financial compass. It points you to the sales level needed for sustainability in each situation, helping you steer your business decisions. It encourages data-driven planning rather than guesswork. Many AOF clients use this kind of analysis with the help of business advisors to make prudent decisions as they grow. By analyzing the numbers first, you’ll feel more confident whether you’re deciding on a marketing budget, an expansion, or any big move.

Strategies to Lower Your Break-Even Point

Every business owner would love to reach profitability faster. If your current break-even point feels daunting (perhaps you’ve calculated you need a very high sales level to break even), don’t panic. There are strategies to lower the break-even point so that you can become profitable with fewer sales. Essentially, to lower break-even, you need to either reduce costs (fixed or variable) or increase your unit margins (often by raising prices or improving sales mix). Here are some practical strategies:

Reduce Fixed Costs

Lowering your fixed overhead directly reduces the revenue you need to break even. Start by examining every regular cost – can you negotiate rent or move to a more affordable space? Swap full-time roles for part-time, or outsource some tasks? Even temporary cuts like pausing software subscriptions during off-season can make a difference. Some businesses also share space or equipment to split costs. But be cautious — cut the fat, not the muscle. Don’t slash anything essential to generating revenue, like key staff or basic operational tools.

Lower Variable Costs per Unit

Trimming what it costs you to produce or deliver each product boosts your profit margin and reduces how many you need to sell to break even. Can you buy materials in bulk for a discount? Negotiate with suppliers? Improve efficiency to reduce waste? Even small changes — like saving a few cents on packaging or fuel — add up over time. Let tech help, too: route optimization for deliveries or tighter inventory control can lower your per-unit cost, meaning you hit break-even faster.

Increase Your Prices (Smartly)

Raising prices (without raising costs) increases your margin per sale — so you don’t need to sell as much to break even. But there’s a balance: set prices too high, and customers might walk away. Test gradually and track how buyers respond. Often, a small increase — even 5–10% — can shrink your break-even target by a lot. If you’re nervous about raising prices, consider pairing it with a boost in perceived value (better packaging, faster service, etc.) to make it feel worth it.

Improve Your Sales Mix

Not all sales are created equal. Some products or services have way better profit margins than others. Focus on promoting those higher-margin items. For example, a coffee shop might earn more from branded mugs or bags of beans than from plain cups of coffee. Shift your sales mix toward those better earners. Upselling, bundling, or phasing out low-margin offerings can also help increase your average profit per sale — which means fewer total sales needed to break even.

Reduce Waste and Increase Efficiency

The more efficiently you operate, the less each sale costs you. Use lean principles: reduce waste, train employees better, and smooth out your workflows. For example, marketing that converts better cuts down the cost of each customer. If your team can serve one extra client a day without extra costs, that’s pure margin. Look for small tweaks with big impact: better scheduling, smart energy use, more efficient tools. These all reduce your break-even without hurting quality.

Consider Changing Cost Structure

In some cases, it’s smart to shift how your costs are categorized. Converting fixed costs into variable ones (like switching salaries to commission-based pay) lowers your base monthly expense, which lowers your break-even point — though it may cost more per sale. On the flip side, if you’re confident in your sales volume, converting variable to fixed (like buying a machine instead of outsourcing) might lower the cost per unit. It’s a more advanced tactic, but worth considering for long-term savings and scalability.

Increase Volume Through Marketing (If Profitable)

Sometimes the best move is just to sell more, faster. Break-even doesn’t always need to change — hitting it sooner can be just as powerful. Smart marketing can give you that boost. If you need 100 sales to break even but you’re only hitting 80, a well-targeted promo could get you there — as long as the campaign cost doesn’t eat your profits. Just be sure to include marketing spend in your break-even math. A good rule: if you spend $1 on marketing, aim to bring in more than $1 in margin from the sales it drives.

When implementing these strategies, it’s wise to recalculate your break-even point to see the impact. For instance, if you negotiate cheaper raw materials, plug the new variable cost into your formula and see how many fewer units you need to sell now. Or if you’re considering a price hike, calculate the new break-even and also consider best- and worst-case scenarios for sales volume. By iterating like this, you can find an optimal path where your break-even is as low as possible and your business model remains attractive to customers.

One thing to remember: lowering the break-even point should not be your only goal. Sometimes businesses can cut costs so much that the quality suffers or raise prices so high that customers leave – that can be counterproductive. The aim is to make breaking even (and thriving beyond it) more achievable without undermining your long-term growth. It’s all about sustainability. If you need guidance on which levers to pull in your specific business, this is a perfect conversation to have with a business advisor or mentor – they can help brainstorm cost-saving ideas or pricing strategies tailored to your situation.

Common Break-Even Analysis Mistakes to Avoid

Break-even analysis is a straightforward tool, but there are some common pitfalls and mistakes business owners should watch out for. Avoiding these will ensure your break-even calculations are accurate and useful:

Overlooking Hidden or Indirect Costs

One of the most common mistakes in break-even analysis is forgetting about the less obvious expenses. While it’s easy to include rent and inventory, you might miss things like software subscriptions, legal fees, equipment maintenance, or permits. For example, a food truck owner might budget for ingredients and truck payments but overlook license renewals or health inspection fees. A consultant might forget to include the cost of required certification courses. To avoid this, look at a full year of expenses — not just your monthly bills. Spreading out annual or quarterly costs into a monthly average gives you a more accurate picture of what it truly takes to break even.

---

Misclassifying Costs

Correctly labeling your fixed and variable costs is key. Some expenses look variable but aren’t — like a monthly phone bill that only changes if you go over the limit. Treating it as variable can throw off your break-even numbers. For semi-variable costs (like utilities), split them into fixed and variable portions. And don’t forget to include your own salary as a fixed cost if you want to account for paying yourself. Some business owners leave it out to see if the operation breaks even on its own, but long term, the business should be able to afford the owner’s paycheck too.

Unrealistic Sales Estimates

Another trap: overestimating how much you can sell. If you’ve never sold more than 500 units a month, don’t plan for 1,000 unless something big is changing (like a new sales channel or marketing campaign). Be honest about what’s possible based on real sales history or reliable market data. Doing a break-even analysis with overly optimistic sales numbers leads to disappointment. Instead, try a range: best case, expected case, and worst case. That way, you’re prepared for surprises and have a plan for different scenarios.

Ignoring Market Realities and External Factors

Break-even analysis looks inward — at your costs and prices — but the market around you matters too. A plan that requires capturing 5% of a market might seem doable, but if that market is crowded and competitive, it might be harder than you think. Consider seasonality, local demand, economic downturns, and how much traffic your location gets. Always cross-check your break-even projections with what’s realistically possible given external conditions. Use real-world data like foot traffic, online engagement, or competitor performance to validate your assumptions.

Not Recalculating Regularly

Break-even isn’t a one-time thing. Your business changes — prices go up, you add staff, new software gets added, or you expand services. All these affect your fixed or variable costs. If you don’t update your break-even numbers, you might be relying on outdated info and thinking you’re profitable when you’re not. Make it a habit to revisit your break-even calculations at least annually or whenever you change something major — like pricing, product lines, or expenses. Staying up to date keeps your goals and decisions grounded in reality.

Using Break-Even as the Only Metric

Break-even is useful — but it’s just one tool in your toolbox. It tells you when you stop losing money, not how much you’re making or when the cash actually hits your account. You still need to look at net profit, cash flow, and sales capacity. You could break even on paper over a year, but run out of money mid-year due to slow payments. Or you might hit break-even, but your sales plateau and don’t support growth. Use break-even as a baseline, not your only planning metric.

Misinterpreting Break-Even Insights

Even when calculated correctly, break-even numbers can be misunderstood. Reaching break-even doesn’t mean you’re succeeding — it just means you’re surviving. Profit starts after break-even. Also, a low break-even point might sound great, but it could also mean you’re not investing enough in marketing, equipment, or growth. And if you sell multiple products, breaking even overall doesn’t mean each product is profitable. Some might be dragging down the rest. Consider analyzing break-even by product or service to get a clearer picture and make smarter decisions about where to invest your efforts.

By being aware of these common mistakes, you can use break-even analysis more effectively. The goal is to have accurate, honest inputs and to revisit the analysis as a living part of your business toolkit. Remember, the power of break-even analysis lies in its accuracy and realism – as the saying goes, “garbage in, garbage out.” If you put realistic, comprehensive data in, you’ll get reliable insights out.

Getting Help: How Accion Opportunity Fund Can Support Your Journey to Profitability

Calculating and leveraging your break-even point can be challenging, especially if finance isn’t your forte. The good news is you don’t have to figure it all out alone. Accion Opportunity Fund (AOF) is not just a lender – we’re a partner in your business journey, offering tools and guidance to help you reach break-even and beyond. Whether you’re a startup, a growing small business, or an established mid-sized enterprise, AOF provides resources tailored to your needs.

For Startups and Small Businesses: Early-stage businesses often need mentorship as much as money. AOF offers free business advisory services to help entrepreneurs build sustainable businesses from the ground up​. Our experienced business advisors can work with you one-on-one to analyze your costs, develop pricing strategies, and even walk through break-even calculations for your business.

If you’re just starting out or in your first few years, you might benefit from AOF’s group coaching sessions (ideal for startups) or personalized advising (for more established small businesses)​. Think of them as your financial co-pilots – for example, they can review your business plan’s financial section to ensure your break-even assumptions are sound.

We also have a rich Business Resource Center full of articles, how-to guides, and webinars on topics like financial planning, pricing strategy, and market analysis. These resources can deepen your understanding and give you actionable tips. (Many of the concepts in this guide, like cost control and pricing, are covered in those materials as well – and you can explore them at your own pace.) Our goal is to empower you with knowledge: “Beyond loans: the tools, training, and support you deserve,” as our mission states​. 

By tapping into AOF’s resource library and coaching, a small business owner can gain the confidence to apply break-even analysis effectively and make savvy financial decisions. It’s like having an on-demand finance team alongside you as you grow.

For Mid-Size and Growing Businesses: As your business scales, you might require larger capital infusions and more sophisticated financial tools. AOF specializes in business term loans that can provide the funding you need – from $5,000 up to $250,000 – to reach the next stage​. 

If you’ve identified, say, an expansion opportunity that will ultimately boost profits or lower your unit costs (thereby improving break-even), a term loan from AOF can help you seize it. But unlike many lenders, we don’t just hand you money and walk away. We pair our financing with ongoing support and education. 

In fact, when you obtain a loan through AOF, you gain access to personalized support and a network of other business owners​. Need help deciding how that loan can be deployed for maximum impact on your margins? Our advisors can assist in budgeting the funds so that your break-even timeline on the project is clear. Perhaps you want to use funds to bulk-buy inventory at a discount – we’ll work with you to plan how quickly that investment pays off. We also offer financial management tools and webinars (through our resource center and partner programs) that are perfect for mid-sized businesses looking to optimize cash flow, analyze financial statements, and use data to drive decisions. These are the “deeper financial tools” that growing businesses need to fine-tune their operations.

The AOF Difference – Coaching, Education, and Community: It’s worth highlighting how AOF’s approach differs from other financing options you might be considering, such as Kapitus, LendingTree, or Funding Circle. While those companies can provide capital, AOF provides capital + coaching and community support. We are a nonprofit, mission-driven lender dedicated to helping businesses succeed, especially those in underrepresented communities​.

That mission translates into tangible benefits for you:

• Personalized Business Advisement: Platforms like LendingTree or Funding Circle primarily focus on the transaction of getting a loan. They won’t sit down with you to discuss how to improve your profit margins or when you might break even. AOF will. We understand that money alone isn’t a magic fix – it’s how you use it. That’s why we offer free advisory services and learning programs alongside our loans​. You get a financial partner who cares about your success. For example, AOF client Jill (mentioned earlier) received “actionable steps” through our coaching that helped her overcome growth challenges​. That kind of hands-on guidance is hard to find with most lenders.
  
• Educational Resources: AOF’s Resource Center is like a built-in business school for our clients. We offer guides (just like this one), webinars, courses, and events covering everything from break-even analysis to marketing and HR. Competitors like Kapitus or Funding Circle might have a blog or some tips, but the breadth and depth of educational content AOF provides is much more extensive – and it’s constantly updated. We believe in building your skills, not just your balance sheet.
  
• Community Development and Support Network: When you work with AOF, you’re joining a community of entrepreneurs. We reinvest loan repayments to fund other small businesses, amplifying the impact of each success story​. Over 90% of our clients are from underrepresented groups, and we foster a supportive community where you can connect with peers who share experiences and advice​. This community ethos sets us apart from traditional lenders. It also means we understand the challenges you may face and can connect you to additional resources (like mentorship or industry networks). For instance, through AOF partner programs, business owners get access to accelerators and peer learning opportunities​ – going beyond what a typical lender provides.
  
• Flexible, Customized Financing: AOF offers flexible loan terms and repayment options tailored to small business realities. We know one size doesn’t fit all. Other lenders might push a certain product that isn’t right for your break-even timing. With AOF, if you expect a longer ramp before breaking even on a project, we can structure a loan term that makes sense (our terms range 12–60 months, and we never charge prepayment penalties​). The point is to set you up for success, not strain you. We also offer bilingual support (English & Spanish)​ and a human-centered approach – you’re more than a credit score to us.
  

To put it simply, AOF combines the best aspects of a financier, a coach, and an advocate. Where a company like LendingTree might help you compare loan offers, AOF will actually extend a fair loan and then help you use that capital effectively through sound business practices. Where a lender like Funding Circle might fund you and expect you to figure out the rest, AOF sticks with you on the journey – through break-even and onward to profitability and growth.

Ready to leverage AOF’s support? If you’re a startup or small business, consider scheduling a session with an AOF business advisor (it’s free coaching that could uncover cost savings or pricing opportunities you hadn’t considered). And if you’re looking for funding to take your business to the next level, check out AOF’s Small Business Term Loans – you can apply online in minutes and get personalized funding options. We encourage you to also explore our Business Resource Center for guides, calculators, and success stories that can inspire and inform you. AOF is committed to being your partner at every stage, providing not just capital but also the knowledge and community you need to thrive.

Break-Even is Just the Beginning

Reaching your break-even point is a pivotal achievement – it’s when your business proves its basic viability. By now, you should have a clear understanding of what break-even is, how to calculate it, and how to use that insight to make better business decisions. We’ve covered how break-even analysis can sharpen your pricing strategy, highlight cost improvements, and guide your plans for growth. We’ve also warned against common pitfalls and shown you ways to lower that break-even bar so you can cross it sooner.

As you apply this to your own business, remember that knowledge is power. Take the time to calculate your break-even point (use the formulas or an online calculator, whatever you’re comfortable with) and revisit it whenever things change. This number is a compass – if you find yourself off course, you can take corrective action. And don’t be discouraged if your break-even point feels far away; many successful businesses started that way but improved over time through smart adjustments. The purpose of knowing your break-even is to give you a target and the insight to reach it.

Finally, keep in mind that you’re not alone on this journey. Whether you’re crunching numbers for the first time or reworking your financial strategy for a mature business, Accion Opportunity Fund is here to help. Our combination of funding, expert coaching, and extensive resources is designed to help U.S. business owners like you not just break even, but break through to new levels of success. We invite you to connect with us – join a coaching session, read more guides, or consider us when you need business financing. Together, we can turn the intimidating concept of break-even into a milestone you achieve with confidence.Take control of your finances today: calculate your break-even point, set your plan to reach it, and leverage resources like AOF to guide you.

With a clear break-even roadmap and the right support, you’ll be on your way to profitability – and that’s when the real growth and rewards can begin.

How Specialty Food Distribution Differs from Regular Food Distribution 

Specialty food distribution is different from regular food distribution. Specialty food products are manufactured to cater to specific dietary needs or preferences, like organic, gluten-free, allergen-free, vegan, or kosher and halal foods. These need to be handled with care to keep them safe and within certain specifications for quality. All specialty foods need to be carefully managed to avoid cross-contamination.  For example, seafood or artisan cheese would need to be kept cold, so distributors employ special systems that maintain the proper temperature during delivery. Cold chain management prevents spoilage and keeps products fresh upon arrival. Unlike regular food distribution, where some products last longer and don’t need such delicate handling, specialty food distributors ensure that every step of the distribution process is handled appropriately, maintaining quality for consumers.  

Key Challenges 

There is a unique set of challenges when it comes to specialty foods, such as food freshness, cold storage management, and adherence to regulations. Since many specialty foods spoil more easily, they must be kept and shipped at the correct temperature levels right from the warehouse into the customers’ homes. For example, fresh seafood or dairy products must stay refrigerated during the entire distribution process. Cold Chain Best Practices: 

• Select packaging, maintaining the insulation of food 
• Monitor the temperature with the use of appropriate technology during transportation
• Train employees on proper handling of the products
• Maintain proper records of the fluctuation in temperature and food safety

Cold storage logistics must also comply with local and international rules. These vary in everything from product type to market. As a business owner, it is important to stay on top of the most recent regulations to get your products to your customers safely, smoothly, and on time. 

Selection of Distribution Channels 

As a specialty food business owner, you must select your brand’s right distribution channels.  Choosing the right channels for your business ensures that your products reach the target customers most directly and inexpensively.The most common distribution channels are: 

• Direct-to-consumer online
• Direct-to Consumers In-Person
• Wholesale

Direct-to-Consumers Online (D2C) 

D2C refers to businesses selling their products directly to consumers through online stores or in-person buying experiences. This model offers a chance for them to be in full control of the customer’s experience and to build their relationships with buyers. D2C is a very popular way for small businesses to sell their products. 

Direct-to-Consumers In-Person (D2CIP) 

Specialty food brands sell through physical stores and online shopping. The focus should go to those places that increase a brand’s visibility, such as specialty food shops or farmers markets, enabling them to reach the right customers. 

Wholesale 

Businesses sell their products at wholesale prices (usually a slight discount due to the large size and regularity of the orders) to other businesses or retailers. Through wholesale distribution, your brand can reach more customers through third-party stores or restaurants that already have a complementary customer base. This can also be called business-to-business (B2B) marketing, sales, and distribution. 

Channels Play an Important Role 

 When choosing your distribution strategy, consider which strategy can offer maximum visibility and sales to your business. Think about where your target customers are already shopping. Other avenues that could guarantee more considerable reach include online marketplaces, gourmet markets, and other specialty grocery stores. Choose the best distribution strategies for your business based on your business goals as well. 

Customer Target Analysis 

 Understanding your target market is key to any good marketing strategy. For specialty foods, you need to look at a few important areas: 

• Demographics
• Purchasing Habits
• Preferences and Motivations 

Demographics

This includes things like age, gender, income, and location. For example, organic and gluten-free products are popular with health-conscious millennials or families looking for healthier choices. By understanding the needs and interests of your target customers, you can tailor your message for them and choose the appropriate sales channels. 

Purchasing Habits

Research and identify: 

• How often do your target customers purchase their groceries, and where do they go to buy them?
• Are they purchasing online, at a local farmer’s market, or even at specialty stores?
• When your target customers want or need specialty food, where do they look for them and how do they like to purchase them? 

The answers to those questions will help you decide whether to invest more in e-commerce, physical stores, or both. 

Preferences and Motivations

People who buy specialty foods often look for products that support small businesses, use unique ingredients, or meet specific dietary needs. Offering these kinds of products can build customer loyalty and guide how and where you sell your products. 

Competitor Analysis

Another important ingredient in formulating a marketing strategy is looking at your competitors. This is especially true for specialty food distribution. As part of a regular competitor analysis, keep your eyes and ears open about other brands’ activities on their products, pricing, packaging, and channels of distribution. Once you know what your competitors are up to, you can identify ways to distinguish yourself and your products from the crowd.For instance, a specialty food brand would differentiate itself at the point of packaging by using eco-friendly packaging when its competitors are not. That way, you will attract those customers who are concerned about the environment, too, and at the same time, leave a gap that the competitors have failed to fill.

The Role of Branding in Distribution Success 

A strong brand is a great asset, especially for specialty foods. Part of good branding is differentiating your product so you can charge a higher price for your products. You want a customer to view your foods as valuable and worth the cost. For example, some brands use cool and catchy packaging, telling the story of their brand and identifying themselves as artisanal or organic. That, in turn, brings in more customers who are more apt to pay higher prices for quality. A strong brand can also strengthen your distribution potential.  Your branding gives meaning to the product-for example, where it originates, how it was produced, or what is special about it. Customers are drawn to these unique qualities, giving businesses a better chance of placing their products in stores where shoppers look for unique high-quality foods. Meeting your shoppers where they are already allows specialty food brands to connect with customers who appreciate the time and effort invested in the making of specialty products, leading to customer loyalty and repeat sales. 

Distribution Partnership 

Partnering with other businesses is a great way to improve your distribution network. It could be local cafes, restaurants, or boutique retailers that have products or services that complement your own. It’s an easy way to reach a new market share at a relatively low cost. A common example is a specialty food brand that makes unique or artisan baked goods that might partner with a local café where the products are going to be featured on the menu and are sold as retail items, thus reaching a new segment of customers.

Optimizing the Supply Chain 

Specialty foods need a well-organized supply chain to ensure customers get their products in the best condition possible. This is especially important for perishable items, like gourmet meats, cheeses, and organic fruits and vegetables, where proper handling and temperature mean the difference between food your customers can enjoy and food waste. Specialty food businesses have to focus on the following parts of their supply chain: 

• Warehousing: Appropriate storage facilities that can help maintain the freshness of the products. Since many specialty foods are prone to spoilage, they must be stored in climate-controlled environments where temperature and humidity are controlled precisely
• Logistics and transportation: Smart planning of how perishable items can get from one place to another. For example, refrigerated trucks can deliver the food at the right temperature so it arrives fresh and on time
• Cold chain management: Maintaining perishable products at the right temperature from the production stage up to the sale stage. Good cold chain management prevents spoilage and is very important in building customer confidence in the quality of purchased products

Paying attention to these areas will enable specialty food businesses to get their products to customers in the best possible condition, building trust and, hopefully, repeat purchases. 

Competitor Analysis for Distribution Best Practices 

Another way to find valuable information about distribution best practices is by studying your competition. By taking a close look at how other brands are distributing their products with their pricing, logistics, and partnerships, specialty food businesses can not only identify best practices but might also be able to identify a hole in the market that can be leveraged. For example, if some of the competitors are at a disadvantage in handling cold chains, it could impact their brand reputation. In addition, analyzing the distribution channels utilized by competitors can reveal which niche segments may still have unmet demand. Specialty food brands can enhance their strategies and build closer connections with customers by closely observing the actions of their rivals.

Increased Market Coverage Through Online Sales 

E-commerce is one of the best avenues for specialty food brands to reach a wider audience.  A strong digital presence connects businesses directly to customers, bypassing the middleman in most cases and driving profits even higher.There are a few things a brand needs to excel at e-commerce:

• User-friendly e-commerce website or app: Like an e-commerce experience, it should not be difficult for customers to browse around and order products directly from the website. A good online store makes shopping easy and convenient for potential customers
• Direct sales team: A dedicated team for online order management, customer service, and shipment. Timely delivery strengthens relations between customers and helps buyers develop a positive relationship with your brand.

By building your e-commerce experience, specialty food brands increase their direct-to-consumer reach and drive online sales to attract more customers. This can help you to gain visibility and extend your business further.

Specialty Food Distribution for Business Success 

For specialty food brands to achieve success in such a competitive market, effective distribution strategies are essential. By placing strong momentum on direct distribution channels, ensuring quality products, understanding the needs of your customers, and leveraging online sales, you can unlock the business keys to successfully reach your desired customer. 

Frequently asked questions 

What is Specialty Food? 

• Specialty foods are high-quality products produced from special ingredients or through unique processes 
•  Examples of gourmet foods are organic jams, gluten-free snacks, fancy cheeses, gourmet chocolates, and handmade or artisanal products

What is Specialty Food Distribution? 

• Specialty food distribution is about how these foods are delivered to customers 
• It describes methods to keep food cold and safety rules for freshness. 

What are the Best Distribution Channels for Specialty Foods? The best ways to sell specialty foods include:

• Direct-to-consumers online
• Direct-to-consumers in-person
• Wholesale 
• The choice depends on who the customers are and what the product is like.

How Does My Target Market Affect My Distribution Choices? 

• Knowing what your customers like helps you decide the best places to market and sell your product 

How Does Marketing Affect Distribution? 

• A strong brand and good marketing strategy help make distribution easier and more effective

What are the Benefits of Working with Partners? Working with partners can: 

• Lower costs
• Reach more customers
• Improve delivery

How Do I Handle Cold Chain Logistics? Handling cold chain logistics means: 

• Keeping a close eye on the temperature 
• Using the correct packaging 
• Following food safety rules to keep the food fresh and safe

How Can I Ensure My Specialty Food Stays Fresh During Delivery? To keep specialty food fresh: 

• Use insulated packaging to protect it from temperature changes
• Choose reliable delivery services that use refrigerated trucks
• Monitor temperatures during transport to avoid spoilage

What Regulations Should I Be Aware of in Specialty Food Distribution? Regulations may include: 

• Food safety standards to prevent contamination
• Labeling requirements for allergens and nutritional information
• Local and international laws for shipping food products

How Can Technology Improve Specialty Food Distribution? Technology can help in many ways: 

• Use tracking systems to monitor deliveries in real-time
• Implement inventory management software to avoid stock shortages
• Utilize online platforms for easier customer orders and feedback

Are you ready to take your business funding readiness to the next level but unsure if your finances are in place to secure the capital you need? This health check will guide you through how to assess your current financial position and help you determine if you’re ready for capital. Get ready to review your balance sheet, financial projections, and key metrics that investors and lenders look for when evaluating applications.

Meet the Expert

Oren Shani

Oren Shani is a program manager and certified business coach with Accion Opportunity Fund. Oren has 10+ years of experience managing businesses and advising other business owners. He started, managed, and expanded his own business, providing disability accommodations for live events across the country. He now helps entrepreneurs launch and grow their own businesses.

Business Funding Readiness

One of the most most important, and challenging, steps in a business growth journey is securing funding for your business. Regardless of if you are seeking funding from loans, grants, investments, or other forms of capital, as a small business owner, you must ensure that your business is set up for application success. Being ready for capital means you: understand your financial health, your financial and business documents are organized and ready to share, and you have taken steps to increase your chances of successfully securing business funding. This financial health check walks you through the essential steps on the journey to financial readiness to apply for capital. Following these steps will make your business more attractive to lenders and investors.

Before you submit a loan or investment application, make sure you’ve researched and reviewed all of your financing options and have identified the right financing option for your business.

Assess Your Current Financial Position

Before applying for additional capital, you have to know where your business stands financially. Your balance sheet, cash flow statement, and profit and loss (P&L) statement are the financial documents that paint a picture of your business’ financial health.

• Balance Sheet: Shows your assets, liabilities, and equity. Your balance sheet is snapshot of what your business owns and owes.
• Cash Flow Statement: Highlights how cash moves in and out of your business. Your cash flow statement allows you to predict and understand the cash coming into your business (mostly from sales or capital like loans) and the cash flowing out of your business due to expenses.
• Profit and Loss Statement (P&L): Provides insight into your business’s revenue, expenses, and profitability over a specific period.

By carefully analyzing these key financial documents, you can determine if your business is financially ready to seek funding. If, through your financial documents, you are able to show that your business finances are strong, stable, and predictable, you’re more likely to be successful in your capital readiness assessment. Potential investors or lenders will expect to see these statements when evaluating your loan readiness or investment readiness.

How to Prepare for Raising Capital

Once you have a clear picture of your financial health, it’s time to prepare your business for to apply for funding. Investors and lenders will calculate specific financial metrics and ratios that demonstrate your business’s ability to handle debt and generate profits. Remember, their main concern is your ability to either repay your loan or get a return on their investment.

Some of the key metrics they look at include:

• Debt Service Coverage Ratio (DSCR): This measures how well your business can cover its debt payments. Lenders generally look for a DSCR between 1.2 and 1.5 to ensure your business can handle additional debt. You can calculate your DSCR by dividing your monthly net income by your monthly debt obligations: DSCR = Monthly Net Income / Monthly Debt Obligations
  • Monthly Net Income = Monthly Revenue – Fixed Monthly Expenses
  • Monthly Debt Obligations= Total of all Monthly Debt Payments
• Profit Margins: Investors will assess your profit margins to see if your business is financially viable and sustainable. Are you consistently making enough profit to cover all of your expenses, pay an owner salary, and more to be able to afford loan payments or investor returns?

In addition to understanding these metrics, successful applications should have a clear plan for how the funding will be used to improve the business’ bottom line.

You’ll also need to prepare documentation that lenders and investors require, including:

• Tax Returns and Bank Statements: Lenders often require at least two to three years of tax returns and bank statements to show the stability of the business’ income and expenses.
• Realistic Financial Projections: Projections should be based on historic data (if possible), competitor research, and market research, and demonstrate how you plan to grow the business and generate returns.

Use these documents to show your capital readiness and funding preparedness to potential lenders or investors. Prove that you are ready for capital and that you’ve thought through how you will use it.

Actionable Steps for Future Business Funding

There are several steps you can take to improve your business’s financial standing and increase its appeal to funders. The best way to prepare to apply for capital will be different, depending on who you are approaching, lenders or investors:

• Lenders: Will focus on the 5 C’s of credit: Character, Capacity, Capital, Collateral, and Conditions. These factors help lenders assess your creditworthiness and ability to repay a loan.
• Investors: Will focus on your financial performance, profitability, and growth potential. Investors are look for businesses that can provide a good return on their investment. You will likely need to pitch your business to an investor. Learn more about how to pitch your business in this short course.

There are several actions you can take to improve your business’s financial readiness:

• Implement a reliable and consistent accounting system and ensure that your bookkeeping is accurate and up to date. An accurate accounting system will give you a clear picture of your business’ financial health through financial metrics like your business’s revenue, expenses, and cash flow.
• Evaluate your financial records to ensure they’re correct and reflect the current state of your business. Your finances tell a story about your business the same way your brand or your social media does. Make sure you understand your financial story and are able to share it with potential investors or lenders.
• Regularly update your financial projections based on the latest data and market conditions. This is especially important for investors.
• Strengthen your financial reporting to improve your investment readiness and loan readiness. The clearer and more accurate your financial documents are, the more confident potential funders will be in your business.

Pro Tip:

Use a Capital Readiness Assessment to gauge how prepared your business is for funding. This can help you identify any gaps in your financial records or business operations before approaching lenders or investors. Short courses like Access to Capital can help you understand the access to capital process and get you ready to apply for capital.

Monitor Your Financial Performance

Once you’ve assessed and improved your financial standing, it is critical that you regularly monitor your financial performance. Consistent financial review helps you stay on top of any issues that could affect your ability to secure funding in the future.

• Monitor Cash Flow: Cash flow management is critical for maintaining the flexibility to handle any unexpected expenses or downturns. Actuve cash flow management also ensures you can pay all of your expenses on time, every time.
• Conduct Market Research: Regularly compare your financial performance with industry benchmarks to ensure that your business remains competitive. This will also give you insights into how to raise funds for a business start-up or expansion.

Maintaining a close watch on your finances helps ensure that you’re always ready for investment or a loan application when opportunities or needs arise.

Improve Your Financial Planning

Investors and lenders want to see that you have a robust plan that addresses potential risks and demonstrates a clear path to growth. To secure business funding, you also need to have a detailed plan for how you will use the investment or loan funds to improve your business.

How to improve your financial planning create a detailed business plan:

• Start with the basics: Craft a plan that includes financial projections, cash flow analysis, and a clear explanation of how the funding will be used to grow the business.
• Customize your plan for your audience:  A business plan for potential investors should recap the history of your business, your wins, and the challenges you’ve overcome, along with your plans for the future, backed by historic data and well researched projections. If a potential lender is looking at a business plan, they’ll have some of the same concerns, but might be more focused on financial metrics like your Debt Service Coverage Ratio.
• Set realistic goals: Establish financial milestones for your business, such as revenue targets, profit margins, and debt reduction plans. Detail how you plan to reach your goals is one way to demonstrate your business and financial readiness.

Consider seeking professional advice from accountants or financial advisors to ensure that your financial plan is accurate and meets the expectations of funders.

Business Funding Readiness Check

By following these steps and focusing on your business funding readiness, you will be well-prepared to apply for loans or investment for your business. Whether you’re exploring how to fund a new business or how to fund a business expansion, having a strong financial foundation will give you a competitive edge. As you build out your investment readiness strategy, remember that securing business funding is not just about numbers—it’s about demonstrating that you have a plan for long-term success.

Want to do a deeper dive into your business finances? Learn for free from business owners and small business experts on Learn with AOF. Get personalized educational content for your business needs.

Entrepreneurship can feel overwhelming at times. That’s why it is critically important to learn how to set up a small business network to achieve your business goals.Key Takeaways:

• Setting up a small business network is essential for managing entrepreneurial challenges and achieving business goals.
• Begin with Existing Connections: Start by reaching out to friends, family, and former colleagues to leverage your existing network.
• Attend Industry Events: Participate in industry conferences, trade shows, and local business networking events to meet like-minded professionals.
• Leverage Social Media: Use platforms like LinkedIn, Twitter, and Facebook to join relevant groups, participate in discussions, and share expertise.
• Join Local Business Groups: Engage with local chambers of commerce, business associations, and networking groups to connect with other entrepreneurs and business leaders.
• Volunteer and Give Back: Participate in community service or industry-related volunteer work to build meaningful relationships while giving back.
• Collaborate with Nonprofits: Work with nonprofits to access their extensive networks and resources, enhancing your business’s visibility and reputation.

If you run a small business and call yourself a CEO, that usually means you’re the Chief Everything Officer. Entrepreneurs carry so many responsibilities, and it can feel overwhelming at times. That’s why it is critically important to build a strong business network. You don’t have to do this alone! Support, help, and resources are abundant if you know where to look. In this article, you will learn how to nurture strategic relationships that can provide value for your business, gain insight into using networking as a powerful tool for entrepreneurial success, and understand how to set up a small business network.

Meet the Experts

DeE Clemmons

Dee Clemmons

is a seasoned entrepreneur with over 31 years of experience in building and managing successful companies. Her entrepreneurial journey began with a small child care facility in Atlanta, which she transformed into a thriving  14 units within a few years. Dee has ventured into various industries, including restaurants, hospitality, and franchises, showcasing her ability to identify emerging trends and capitalize on them. She is known for her strategic vision, exceptional leadership skills, and the ability to adapt to changing market dynamics. Dee is passionate about mentoring and empowering aspiring entrepreneurs, inspiring them to pursue their own business ventures. With her vast experience, dedication, and innovative mindset, Dee Clemmons continues to be a driving force in the business world, inspiring both seasoned and budding entrepreneurs.

Sheneka Frieson

Get ready to be inspired by the amazing Sheneka Frieson, the successful owner of Romares Apparel based in Tuscaloosa, Alabama! Sheneka’s journey to entrepreneurship started in high school, and since then, she has become a shining example of hard work and determination. With a Business Management degree from Huntington College and years of experience as a former Ambassador of the Chamber of Commerce of West Alabama, Sheneka launched Romares Apparel in 2017 and has since expanded her business to offer plus-size clothing sizes, home decor, and merchandise from various colleges. Her passion for meeting people who share fond memories of their alma mater is second to none. We are thrilled to have her here today to share her expertise and inspire us to never give up on our dreams.

Gustavo Ustariz

Gustavo is the Senior Manager for Entrepreneur & Small Business Support at Main Street America. He collaborates with external partners and stakeholders to design, lead implementation of, manage, and monitor Main Street America’s suite of entrepreneurial support and ecosystem building programs intended to build more resilient business models and local economies. Before joining MSA, Gustavo worked as a tourism planning and development consultant for 17 years, collaborating with NGOs, local governments, entrepreneurs, and organized community groups in assessing, planning, developing, and marketing international tourism destinations.

Why Building Your Business Network is Crucial

Building a small business network is like creating a safety net. It’s about connecting with people who can provide advice, support, and resources when you need them. A robust business network can help you:

• Access valuable insights and advice from experienced entrepreneurs.
• Find potential clients, partners, and suppliers.
• Gain visibility and credibility in your industry.
• Navigate challenges with support from others who’ve been there.
• Open doors to new opportunities and collaborations.

Practical Steps to Start Building Your Network

Begin with Your Existing Connections

Start by reaching out to your friends, family, former colleagues, and acquaintances. Let them know about your business and ask if they can introduce you to others who might be helpful. Your existing network can be a powerful resource as you learn how to set up a small business network and find valuable connections.

Attend Business networking Events

Participating in industry conferences, trade shows, and local business networking events can provide valuable opportunities to meet like-minded professionals and potential partners. These events are excellent places to learn, share ideas, and build meaningful relationships. Small Business Development Centers (SBDCs) and Chambers of Commerce are often a good place to start to find business networking events.

Leverage Social Media

Social media platforms

like LinkedIn, Twitter, and Facebook are powerful tools for networking. Join relevant groups, participate in discussions, and share your expertise. Building a strong online presence can help you connect with people beyond your local area and industry.

Join Local Business Groups

Local chambers of commerce, business associations, and networking groups offer excellent opportunities to meet other entrepreneurs and business leaders in your community. These groups often host events, workshops, and meetings that can help you build your network and connect with other business professionals.

Volunteer and Give Back

Getting involved in community service or industry-related volunteer work can help you build meaningful relationships while giving back to your community. Volunteering can also increase your visibility and establish your reputation as a committed and engaged business leader. Remember, networking is a two-way street; by giving back, you also build stronger connections.

Collaborate with Nonprofits

Nonprofits can be valuable partners for small businesses. They often have extensive networks and resources that can benefit your business. Collaboration can also enhance your reputation and brand image, demonstrating your commitment to social responsibility.

Overcoming Common Networking Challenges

Fear of Rejection

Reaching out to new people can be intimidating. Remember, everyone you meet was once in your shoes. Approach networking with confidence and a genuine interest in building relationships. Most people appreciate the initiative and are willing to connect.

Time Constraints

Finding time to network can be challenging, especially for busy entrepreneurs. Prioritize networking activities by setting specific goals and scheduling regular time for them. Treat networking as an essential part of your business strategy, not an afterthought.

Maintaining Relationships

Building a network is just the beginning; maintaining it is equally important. Regularly check in with your contacts, offer help when you can, and stay engaged with your network. Simple gestures like sending a quick email or sharing useful information can keep your relationships strong.

Effective Networking Strategies

Focus on Building Genuine Relationships

Networking is not just about exchanging business cards. Focus on building genuine relationships based on mutual respect and shared interests. Be authentic, listen actively, and show a genuine interest in others. Building trust and rapport is crucial for long-term success.

Provide Value

One of the most effective ways to build strong relationships is to provide value to others. Offer your expertise, share valuable resources, and be willing to help without expecting immediate returns. This approach not only strengthens your relationships but also enhances your reputation.

Stay Consistent

Consistency is key to successful networking. Make networking a regular part of your routine. Attend events, engage on social media, and stay in touch with your contacts. Consistent efforts over time will yield significant results.

Leveraging Nonprofit Resources

Nonprofits often have resources that small businesses might not be aware of, such as grant programs, volunteer opportunities, and extensive networks. Collaborating with nonprofits can provide access to these resources, enhance your business’s visibility, and demonstrate your commitment to social responsibility.

Long-Term Relationship Strategies

Maintaining long-term, impactful relationships requires regular communication and mutual respect. Schedule regular check-ins, celebrate successes together, and always look for ways to provide value to each other. Strong relationships are built on trust and reciprocity.

The Importance of Investing Time in Networking

Investing time in networking is crucial for business growth. Networking opens doors to new opportunities, provides support and guidance, and helps you navigate challenges. Even if you’re hesitant, taking small steps to build your network can have significant long-term benefits.

How to Set Up a Small Business Network

Figuring out how to set up a small business network can feel overwhelming. It’s important to remember that you don’t have to do everything all at once. If you’re looking to start building your network today, consider joining a local business group or an online community.

Attend an in-person event. Introduce yourself and start engaging with others. Networking is about building relationships, so take that first step and watch your small business thrive.

By following these tips and leveraging these insights, you can start building a strong business network that will support your growth and success. Remember, networking is not just about making connections—it’s about nurturing relationships that can provide lasting value. So, take that first step today and watch your small business thrive!

Are you filing your taxes on time? Do you know your sales tax nexus? Want help getting started with these complicated issues? Retail and e-commerce business owners face unique and often complex tax calculations. Prepare your business for tax season throughout the year, learn how to make your tax season easier, and where to turn for trusted help. Let our experts guide you through retail business tax considerations.

Meet the Expert

Oren Shani

Oren Shani is a credit advisor and certified business coach with Accion Opportunity Fund. Oren has over 10 years of experience managing businesses and advising other business owners. He started, managed, and expanded his own business, providing disability accommodations for live events across the country. He now helps entrepreneurs launch and grow their own businesses.

To schedule a free meeting with Oren or any of our expert business coaches, please visit AOF’s Coaching Hub.

Retail Business Tax Considerations

How can small business owners who sell retail products online prepare for tax season?

• Get Organized: The number one thing you can do to have a smoother tax season is keep your business finances organized. First and foremost, separate your personal and business finances. It’s also essential that you use an accounting system (not just your Point of Sales, or POS, system that can easily pull financial reports needed to complete your taxes, like a Profit and Loss Statement.
• Know Your Deadlines: Tax deadlines vary by your business type. It is important that you research and know your tax deadlines. Save them in a calendar and give yourself plenty of reminders as you approach tax season to avoid a time crunch or late fees and penalties.
• Know What You Need: If you are outsourcing, know what you need to share with a tax professional so they can quickly and correctly complete your taxes. Tax professionals will typically need your previous year’s taxes (if this isn’t your first year in business), your sales records, receipts for all of your expenses, and any other financial documentation or reports that you have.

When should small business owners begin to prepare for tax season?

Tax deadlines vary by your business type. Sole-prop, LLC, partnerships, C-Corp, and S-Corp are the most common types of business entities. Learn more about tax deadlines here and consult with your tax professional about tax considerations for retail business apply to your unique situation.

Types of Taxes for Retail Businesses

E-commerce businesses face unique tax requirements. E-commerce businesses typically have to pay the following types of taxes:

• Income Tax
• Employment Tax
• Self-employment Tax
• Sales Tax
• Excise Taxes
• Economic Nexus
• Duties and International Taxes

Consult with your tax professional in advance of tax season to learn which types of taxes are relevant to your business. Let’s explore these common tax types in more detail.

Income Tax

All businesses must file a federal income tax return each year to the IRS. Other income tax requirements vary depending on the state and the legal entity of the business:

• All businesses must file a state income tax return, except businesses based in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
• Partnerships only need to file an information return.
• Business taxes are supposed to be paid throughout the year (quarterly), not at the time the taxes are filed.
• The type of business entity will determine how taxes are paid.

Employment Taxes

As an employer, you have to pay taxes withheld from your employees’ paychecks. An employee is any worker with taxes taken out of their paycheck. You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes.

You are also required to issue a Form 1099-NEC to most contractos that worked with your business. For any contractor to whom you made payments of $600 or more for services performed for your business by people not treated as your employees, such as subcontractors, attorneys, accountants, use From 1099 to report certain payments you make in your trade or business.

Self Employment Taxes

If your net earnings (profit) from self-employment were $400 or more, you must pay self-employment taxes, including the following:

• The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security and 2.9% for Medicare.
• You should receive 1099-NEC if you generated revenue from other businesses.
• This tax is eligible for Qualified Business Income deduction

Sales Tax

There is no federal sales tax in the US. All sales tax is paid to state or local governments. Laws vary significantly by state and can change with little to no notice. Be sure to consult with a tax professional for the most up to date information.

• You must report the amount of sales generated and remit the tax to the state specific tax agency.
• There is no state sales tax in Alaska, Delaware, Montana, New Hampshire and Oregon.
  • Alaska taxes some services, and Delaware still collects a tax on receipts from businesses.
  • Cities or counties within these states may still collect taxes

• You’ll apply for a sales tax or reseller’s permit, which generally exempts your business from paying tax on purchases of wholesale items.
• Some states don’t tax groceries or health-related goods like medicines, so check your local regulations for rates and exempt items.

Excise Taxes

Most businesses won’t incur excise tax. Excise tax is due on specific goods or services at the time they are purchased. Goods subject to excise taxes could include:

• Fuel
• Tobacco
• Alcohol
• Most gambling
• Air transport
• Telecoms
• Heavy duty trucks over 55,000 pounds

Economic Nexus

Much like sales tax, economic nexus requirements vary widely by state. If you are selling products to more than 5 states, experts recommend consulting with a tax professional to determine economic nexus.

In general, if you make a certain amount of sales in another state, you may be required to collect and pay sales tax for that state. That requirement is also called “having an economic nexus” in that state. Some states define nexus as “Destination-Based,” where tax is levied based on where the customer is, not the business. Other states define nexus as “Origin-Based,” business physical location determines the tax rate. Alaska, Delaware, Montana, New Hampshire and Oregon are the only states that do not charge a sales tax.

Nexus conditions in another state can also apply when hiring a remote employee, hosting a tradeshow, or establishing a drop shipping relationship.

Best Practices for Economic Nexus: 

• Make sure you file business licenses in the states in which you do business.
• Determine where you have state nexus, especially destination-based nexus.
• Automate sales tax bookkeeping with software. You will still need to file and remit taxes.
• Determine if you are eligible for any exemptions, like sales tax holidays, wholesalers, etc.
• Let a CPA do all the work for you.

Accounting tools like QuickBooks

can help you to calculate your economic nexus for state sales taxes. If you are ever unsure about your economic nexus, it is always good to speak to a tax professional about your unique situation.

Duties and International Taxes

Duties and international taxes are most commonly paid at the time of purchase or import. Common types include:

• Import Duty
• GST (Goods & Services Tax)
• VAT (Value Added Tax)
• DDP (Delivery Duty Paid)
• DDU (Delivery Duty Unpaid)

What types of business taxes do I need to pay based on MY business type?

The types of taxes that you pay and the tax forms that you need to file vary based on your business entity. Common business entities and their tax implications are listed below.

	Sole-Prop	Partnership	LLC	C-Corp	S-Corp
Definition	Owned by one individual. The business has no existence apart from the owner.	Existing relationship between two or more persons who join together to carry on a business.	Formed under state law by filing articles of organization as an LLC. The members of an LLC are not personally liable for its debts.	A legal entity or structure consisting of shareholder(s). Since a corporation is an entity in its own right, it is liable for its own debts and obligations.	A legal entity or structure consisting of shareholder(s). Since a corporation is an entity in its own right, it is liable for its own debts and obligations.
Tax Implications	Business liabilities are your personal liabilities. Income and expenses of the business are included on your personal tax return. and business profits are taxed as personal income.	A partnership does not pay tax on its income but “passes through” any profits or losses to its partners. Partners must include partnership items on their tax or information returns.	An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity separate from its owner.  Single-member LLCs are taxed like sole-props.	The profit of a C corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends.	An S corporation helps avoid being “double taxed,” as in a C-Corp. It is exempt from federal income tax other than tax on certain capital gains and passive income.
Tax Forms	Schedule C, Schedule C-EZ, or Schedule F, as part of Form 1040, U.S. Individual Income Tax Return.	Form 1065, U.S. Partnership Return of Income, plus other returns that apply.	Varies.	Corporations usually file a Form 1120 series return, plus other returns that apply.	Corporations usually file a Form 1120 series return, plus other returns that apply.

Business Tax Deductions

A business tax deduction is an incurred expense that reduces your taxable income and, as a result, the taxes that you owe.

What can business expenses can I deduct?

To be deductible, a business expense must be ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your field of business. Deductible expenses must relate directly to the work of your business and you cannot have been reimbursed for it.

How do I deduct expenses on my business taxes?

To deduct expenses you must collect all receipts and documented expenses that the business incurred over the tax year. You cannot deduct a business expense without supporting receipts and verified expenses. Remaining income after deducting expenses is your net earnings and is taxable.

What are some signs that a business might be ready for professional help with retail business tax considerations?

If you are already running a business, you are ready to consult with a tax professional. The extent of that professional help will vary depending on how complex your business and business taxes are. If you are selling in many states or purchasing and depreciating large assets like real estate or equipment, you should talk with a tax professional.

Working with a tax professional doesn’t only help you get your taxes submitted by the due date, they can also help you craft a long term tax strategy. They can help you determine the best tax strategy for your business’ long term success.

What is A step or action that business owners can take today to get ready for the tax season?

• Get your accounting up to date.
• Track your revenue, expenses, net earnings, preferable in a dedicated accounting software.
• Make sure you have all of your receipts.
• Get your paperwork in order to minimize how much you are going to be paying your tax advisor. The more organized you are, the fewer hours your tax advisor will have to spend on your taxes.

Disclaimer: While we are so excited to share this impactful information on taxes, this webinar and article are informational and do not constitute official legal, accounting, or tax professional services. We always strongly suggest chatting with your tax professional or accounting service about your specific business needs and retail business tax considerations.