The main goal in any business is to make a profit, but to do that you need to understand whether your products or service offering makes financial sense or at least covers the costs associated with it.
A breakeven analysis will identify the point where your total costs and total revenue match. In other words what your sales need to be to move from a loss to a profit. Whilst simple in principle, the mix of different products with different margins and some costs being variable, whilst others are fixed or the impact of needing more staff or premises all affect this important financial analysis.
The purpose is to help you develop a clear business plan and sales target to build a profitable business. Once you know the target you are aiming for then you have a lot more chance of achieving it.
It can also help you to plan for your future. Is that new branch worth opening and when will it turn the corner to generate positive cash flows? Or to determine whether a new product or service can be profitable reducing potential risk and avoiding loss of time, effort and money to prepare and launch.