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Calculator · Free

Break-Even Calculator

Find the revenue and billable hours required to cover fixed and variable costs.

Monthly fixed costs

Costs you carry whether or not you sell a job. The owner's salary belongs here — it is a real cost of the business, not a leftover.

$/mo
$/mo

Liability, workers' comp and vehicle policies.

$/mo
$/mo

What you need to live on, not what is left over.

$/mo
$/mo
$/mo
$/mo
Variable cost
How do you want to set it?
$

Field labor, material and subs on a typical job.

$
hrs
Where you are, and where you are going
$/mo

Used to measure your margin of safety.

$/mo

A truck and a tech, a bigger shop, a service manager — whatever you are about to commit to.

Break-even revenue

$40,047per month

At a 41.0% contribution margin, every revenue dollar leaves $0.41 to cover $16,400 of fixed cost.
Jobs per monthAt $2,100 per job
20
Billable hours per month9.0 hrs per job
172 hrs
Break-even revenue per year
$480,558
Margin of safety$1,953 above break-even
4.7%
Profit at current revenue
$800
Fixed cost structure
Fixed costMonthlyAnnualShareRevenue it demands
Shop rent & utilities$1,800$21,60011.0%$4,395
Insurance — liability, comp, vehicle$950$11,4005.8%$2,320
Office & admin payroll$3,800$45,60023.2%$9,279
Owner's salary$7,000$84,00042.7%$17,093
Vehicles — payments, fuel, maintenance$1,450$17,4008.8%$3,541
Software & subscriptions$380$4,5602.3%$928
Loan & equipment payments$620$7,4403.8%$1,514
Other fixed costs$400$4,8002.4%$977
Total fixed cost$16,400$196,800100.0%$40,047

You clear break-even by $1,953 a month

Revenue can drop 4.7% before the business stops covering its fixed costs, and the $1,953 above break-even converts to $800 of profit at your contribution margin. That is 0.9 jobs a month of cushion — one slow week, in most shops.
Adding $9,800 a month of fixed cost
MeasureTodayAfter the hireChange
Fixed cost per month$16,400$26,200+$9,800
Break-even revenue per month$40,047$63,977+$23,930
Break-even jobs per month2031+11
Break-even billable hours per month172274+103
Profit at today's revenue$800-$9,000−$9,800
Revenue needed to hold today's profit$42,000$65,930+$23,930

Growth raises fixed cost today and revenue later

A truck and a technician cost $9,800 a month from the day they start, and the revenue follows months behind. To stand still on profit you need $23,930 more revenue a month — 12 more jobs and 103 more billable hours. Multiply the shortfall by the months it takes to fill that schedule and you have the cash the expansion actually requires. That number, not the payroll cost, is what sinks growing contractors.

What this assumes

  • Fixed costs are those incurred whether or not you sell a job — rent, insurance, salaries, loan payments, software.
  • Contribution margin is the share of each revenue dollar remaining after direct job cost.
  • Owner's salary is treated as a fixed cost, because it is a real cost of the business.

Understanding the result

Growth can bankrupt you

Adding a truck and a technician raises fixed costs immediately and revenue only later. Knowing the new break-even before you hire tells you how many months of runway the expansion requires, which is the difference between growth and a cash flow crisis.

You may also need

The next decision usually follows directly from this one.

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