Break-Even Calculator
The revenue where you stop losing money — per year, per month, per day, per job.
Your numbers
Your result
- Break-even revenue
- $1,200,000
- Break-even revenue per month
- $100,000
- Break-even revenue per operating day
- $4,800
- Contribution margin per job
- $720.00
- Jobs needed to break even (per year)
- 667
- Jobs needed per month
- 56
- Current profit above break-even
- $120,000
- Margin of safetyHow far revenue can fall before you're losing money.
- 20%
- Revenue needed per $1 of new fixed costEvery dollar of new overhead requires this much new revenue just to stay even.
- $2.50
Only 20% of cushion
A soft quarter puts you at break-even. Before adding any fixed cost, note that each new dollar of overhead needs the revenue shown above to carry it.
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What this number actually tells you
Break-even is the revenue level where gross profit exactly covers your fixed costs. Below it you're funding the business out of your own pocket or your credit line; above it, every additional dollar of gross profit is real profit.
It's the most useful number for making decisions, because it converts every fixed-cost question into a revenue question. A new $60,000 salary at a 40% gross margin isn't a $60,000 decision — it's a $150,000 revenue decision.
Break-even also gives you margin of safety: how far revenue can drop before you're losing money. Most owners have no idea what theirs is, which is why a slow quarter feels like a surprise.
How the math works
- 01Break-even revenue = fixed costs ÷ gross margin %.
- 02Contribution margin per job = average job value × gross margin %.
- 03Break-even jobs = fixed costs ÷ contribution margin per job.
- 04Margin of safety % = (current revenue − break-even revenue) ÷ current revenue × 100.
- 05Revenue required per $1 of new fixed cost = 1 ÷ gross margin %. At 40% margin, $1 of overhead needs $2.50 of revenue.
What to do with the answer
- Post the monthly break-even number where you and your team can see it. It turns 'are we having a good month?' into a fact.
- Run every hire, lease and software subscription through the revenue-per-fixed-dollar number before you sign.
- If margin of safety is under 15%, improve gross margin first. It lowers break-even without cutting anything.
- Recalculate whenever fixed costs change by more than a few percent — not once a year.
Want someone to read these numbers with you?
The Growth Assessment is a 30-minute conversation about what your numbers are telling you and what to fix first. No pitch deck, no PDF.
Schedule Your Growth Assessment Or call (737) 888-0415Questions owners ask about this
What's the difference between gross margin and contribution margin?
For most service businesses they're close enough to use interchangeably: revenue minus the variable cost of delivering the work. Contribution margin is stricter — it counts only truly variable costs — so if some of your field labor is salaried, your contribution margin is a bit higher than your gross margin.
How do I lower my break-even point?
Two levers: raise gross margin (pricing, productivity, material cost) or reduce fixed costs. Raising margin is usually faster and doesn't shrink capability. A 5-point margin improvement can drop break-even revenue by well over 10%.
Should owner pay be a fixed cost in break-even?
Yes, if you want the truth. Leaving your own compensation out produces a break-even number that looks achievable and leaves you unpaid. Include a market wage for yourself in fixed costs.
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