Dr. Paul Borosky, DBA, MBA
Business Consultant & Author
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How to Know If a Business Idea Will Work Before You Open
Working harder does not change the math. Price and volume do.
Most new owners find out whether a business works by opening it and watching the bank account. That is an expensive way to learn something one sheet of paper can tell you a month before opening day. Run three checks first.
Last Updated: 10/27/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
How Do You Know If a Business Will Work Before You Open?
Textbook Definition
A feasibility check compares a business’s break-even point, the sales volume at which revenue covers fixed and variable costs, with realistic demand and operating capacity, including a market wage for the owner.
In Plain English
Find out how many customers it takes to cover your bills and pay you. Then check whether you can serve that many. If the number is bigger than your capacity, the business does not work at your current price.
Break-Even
Overhead ÷ What Each Sale Leaves
Ridgeline, with Mike’s pay: 36 customers
“What each sale leaves” is price minus job costs. Accountants call it contribution margin. The full formula, with more examples, is in how to calculate your break-even point.
Show the Math
Ridgeline’s Break-Even, Two Ways
Mike charges $50 a weekly mowing. About 4.33 weeks in a month means each customer brings in about $217 a month. Job costs of $7 a mowing (fuel, line, blades) come to about $30 a month. Each customer leaves about $187.
| Break-even | Monthly costs | Each customer leaves | Customers needed |
|---|---|---|---|
| Business only | $2,050 | $187 | 11 |
| Business plus Mike’s pay | $6,550 | $187 | 36 |
Overhead: loans $1,100 + insurance $550 + phone and software $400. Mike’s household needs $4,500 a month from the business. Fictional example from the book.
The Method
How to Run the Three Checks
Split your costs.
Overhead stays the same whether you have one customer or fifty: rent, insurance, loan payments, phone. Job costs rise with each sale: fuel, materials, card fees.
Find what each sale leaves.
Price minus job costs. For a monthly service, turn it into a monthly number per customer.
Divide, then round up.
Overhead divided by what each sale leaves. You cannot sign 0.96 of a customer.
Run it again with your pay.
Add what your household needs from the business. A business that covers its bills but cannot pay its owner is not working yet.
Check capacity.
Can you deliver that much work in a week? If not, change the price or the plan before you open. Hustle does not fix it.
Price or Volume?
At $55 instead of $50, each Ridgeline customer brings in about $238 a month and leaves $208. Break-even with Mike’s pay drops from 36 customers to 32. At 40 customers, that $5 is about $840 more a month. Price from your break-even up, not from the competitor down.
Two Owners, Same Town
Mike vs. Dale: Same Lawns, Different Math
| Per weekly customer | Mike at $50 | Dale at $40 |
|---|---|---|
| Brings in per month | $217 | $173 |
| Job costs per month | $30 | $30 |
| Leaves per month | $187 | $143 |
| Customers needed to pay the owner | 36 | 46 |
| Weekly capacity | About 40 | About 40 |
Dale: about $2,000 overhead + $4,500 pay = $6,500 ÷ $143 = 45.5, rounds to 46. Fictional, from the book.
Dale priced by calling the competitor and coming in $5 under. His business cannot pay Dale. Not in a good month, not in a great one. He does not know it yet, because nobody ran the number.
Owner Warning
What Do Owners Get Wrong Before Opening Day?
- Picking a target that feels right, like a nice round 30 customers.
- Running break-even without their own pay.
- Pricing from the competitor down instead of the break-even up.
- Never checking whether they can physically do the work.
- Counting only the interest on loans instead of the full payment.
- Forgetting the off-season months still carry the loan payments.
From the Book
The Step Most Owners Skip
Chapter 3 · Will This Business Work?
Break-Even With and Without Paying Yourself
A business that covers its bills but can’t pay its owner isn’t working. It’s a hobby with a truck payment.
Break-even, pricing, capacity, and what to do about each. It is all in the book.
Get the Book on Amazon →Testing an Idea for a Lender or Investor?
A feasibility check is the heart of a good business plan. Dr. Paul builds the break-even, the projections, and the plan around them. See business plan writing services.
Beyond the Book
Need Help With Your Own Numbers?
Do it yourself, hand it off, or work through it together.
Business Plan Templates
The statements, prebuilt. A Word plan plus an Excel model for your industry.
See the Templates →Business Plan Writing
Hand it off. Dr. Paul writes the plan and the numbers that back it up.
See Plan Writing →Business Consulting
Straight answers on the numbers that run your business, from Dr. Paul.
See Consulting Options →FAQ
Business Feasibility Questions
How do I know if my business idea is profitable?
What is the break-even formula?
Should I include my own salary in break-even?
What if my break-even is more than I can handle?
Keep Going
Related Guides
This guide is part of the small business finance guide.
Written by Dr. Paul Borosky, DBA, MBA, business consultant, author, and adjunct finance instructor with an MBA focused in finance.
This page is for general educational purposes only. It is not legal, financial, tax, accounting, or lending advice. Tax rules change by place and by year. Ridgeline Landscaping and its figures are a fictional illustration from the book, not a projection for your business. For decisions about your own business, consult a qualified professional.