Example Concept: Break-even analysis involves calculating the break-even point (BEP), where total revenues equal total costs, using the formula: BEP = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). By understanding the BEP, small businesses can assess whether they have the capacity to cover additional costs associated with scaling operations, such as increased production, marketing, or staffing. This analysis helps in making informed decisions about when and how to expand, ensuring that growth is financially sustainable.