Transitioning from Google Map Editor to OpenStreetMap

After using Google Maps for quite a while, I enjoyed areas that had buildings populated on the map, Google does a very good job of this, however since Google Map Maker closed, I felt somewhat disenfranchised with their mapping system, It became a lot harder to edit their maps and the experience is just not as good as Map Maker was.

screenshot showing local shops and residential estate on google maps
A Google Maps screen capture of my neighborhood.

Then one day I discovered OpenStreetMaps and the simplicity of their map editor filled the hole in my heart that Map Maker left. I found that Open Street Maps iD editor was both friendly to use and better than Map Maker, the iD editor had a much more intuitive interface and the wiki made the transition generally easy and enjoyable.

screenshot showing local shops and residential estate on open street map
An Open Street Maps screen capture of my neighborhood.

As with any change, there was a little bit of a learning curve but the wiki was informative and allowed me to transition from my amateur interest in the topic of cartography into a full-blown contributor to the eco-system. I also have started using the JOSM editor a little and have found that its tools have made contributing much easier for bulk operations and mainly use the iD editor for tidy-up or casual map corrections or contributions.


Why Open Street Map?

Contributing to a closed system like Google maps was never really a problem for me using my local knowledge to correct open times and add photos to locations, but once I discovered Open Street Maps, I sort of feel like there’s no going back. There are a lot of reasons I like Open Street Map,

  • Its Open, the maps can be used in any application, the license only requires that OSM is credited when your application is public. (Copyleft Attribution-Share-Alike)
  • Its used in a lot of applications that I use already, updating the map on OSM will improve those applications too.  🙂
  • Editing polygons seem to be a lot easier than Google Map Editor.
  • Using an Open system would be preferable over something that in the future could potentially become a closed source or paid for.

I intend to update my local area, as Open Street Maps relies on community contributions it is apparent that it has not been updated in a while. Watch this space.

What is Break-even analysis useful for anyway?

What does Break-even calculate?

Here is a Break-even chart. It represents a 24 day period.

graph showing break-even anaylysis from 11 to 24 days
y = cash x = days

Break-even is when a business is not making any losses or profit, seen in the chart above at 11 days. It can be seen that the yellow total costs line, is the same angle as the variable costs line, plus fixed costs. It also can be determined, that the blue shaded are represents the magin of safety as after that all costs are paid.

What is Margin of Safety?

The margin of safety is how much additional units you have sold in a given period. For example, in the graph below, we are on our 18th day.

graph showing break-even anaylysis from 11 to 18 days

On this day we have spent approximately $680 since day 1, and by day 18, we have made $1040 revenue, so our margin of safety is $1040-$680= $360, however margin of safety does not work in money so we need to convert it back to units, so if each unit sells for $10, then our margin of safety is 36 units.

What is Break-even useful for? (Advantages and Disadvantages)

  • The point at which you aren’t making any losses or profit.
  • It allows you to identify problems you may face with cash flow on new investments, for example;
    • Investing in a more expensive warehouse may not be financially viable, as the investment would create a small margin of safety.
    • Increasing variable cost may make break-even harder to achieve.
  • It allows a business to ‘relax’ it’s workload after it has reached it’s margin of safety, as it no longer needs to cover costs. Everything made past the break-even point is profit.
  • It may allow an entrepreneur identify where they may want to take risks.
  • It also allows an entrepreneur to identify when a theorised project is not financially viable.
  • It focuses on what output is required before a business reaches profitability
  • Helps management and Finance providers better understand the viability of a risk or business idea.
  • It does not cater for potential changes in the moment
  • Unrealistic assumptions that everything stays the same.
  • It is more of a planning aid, than a decision tool.

However there are limitations of the chart, as it does not allow you to anticipate economy of scale, changes in fixed cost or demand. The most important factor that it allows you to calculate is the point that you aren’t making any losses or profit.

How is Break-even calculated?

 

 

Break-even Output = Fixed Costs / Contribution per unit


Contribution per unit = Selling price per unit - Variable cost per unit

or

Contribution per unit = Contribution per unit x Number of units sold

Common AS-Level Business Studies Equations

Here is a list of routinely forgotten equations for Business Studies, make sure to memorise them.

Equations


Total Contribution =

Total revenue - Total variable cost

Contribution per unit =

Selling price per unit - Variable cost per unit

or (for total contribution)

Contribution per unit x Number of units sold

Profit =

Total contribution - Fixed cost

Break-even Output =

Fixed cost / Contribution per unit


 What do they mean?

  • Contribution is useful for a business to be responsible for a range of products, it allows them to calculate how much money they make on a sale.
  • The Break-even charts (and equation) is a tool that allows you to show total costs at all possible levels of output or demand from zero to maximum capacity. Break-even is not given in money, and should be the amount of units sold.
  • Profit is money made, not taking anything into account other than fixed and variable cost.
  • Contribution per unit, is just total contribution per unit. So to get it, divide by the amount you sell of a product (or use the other formula). Don’t confuse this with break-even.

When calculating using these equations it is important to consider external factors. Such as extrapolation or economic variables that could be changing the data. However you may not get questions like this in the exam.

Sometimes four mark questions may ask about productivity. For example, these questions do not want you to describe the formula, they may want you to state it. But make sure to stick to  the ‘because, leading to, therefore and such as’ structure. Otherwise you may not be answering the question correctly.

Break-even output is easier to consider it as the fixed costs divided by the contribution per unit, like so. If it costs $500 in rent, and you get $1 for every candy bar you sell, you need to sell 500 candy bars. Because $500 / $1 is 500 not $500.

Remember that break-even output is never given as money. Remember also to consider confidence intervals may mean that the data given is not accurate, as well as the accuracy of the data you have received.


comments hear-say equationsRemember that the information you have may be hear-say and not 100% accurate, things may change. The variable cost of items may raise, or lower. Total contribution may not be accurate if the business sells multiple products at different prices. Make sure to base your equations off all of the information available, don’t take short-cuts.

"Revenue is vanity, Profit is sanity, Cash is King!"

Remember, its not percentages or ratios that businesses put in the bank, it’s dollars. credit. So think about how valuable the data you have actually is. Make sure you understand the numbers! cash flow shortages can be negated with better trade terms. Having predictable cash flow is preferable, so make sure that you mention it.