Brokerage Firm Break-Even Analysis: $176K Monthly Revenue Target

Fixed costs $55.0K/mo Monthly overhead base

Contribution margin 88% After variable costs

Break-even revenue $62.5K/mo Revenue needed

Break-even timing Month 6 Cash turns positive

Break-even calculator

Use this calculator to test monthly revenue against variable expenses and fixed costs for a brokerage firm.

Lean Base Full

Monthly revenue Revenue sets the pool that must cover variable cost and fixed overhead. $ Low revenue High revenue Variable expenses These costs rise with trading and client activity. $ Low costs High costs

Money available to cover fixed costs $130,000 $450,000 revenue - $320,000 variable expenses

Margin ratio

29%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base break-even must absorb. $ Low fixed High fixed

Break-even chart Revenue Total costs

Which brokerage firm expenses are fixed, and which move with sales volume?

Cost classification

Break-even is only useful if fixed overhead stays fixed and trade-linked fees move with revenue. In this model, Month 6 break-even depends on separating monthly commitments from volume-based clearing, data, and transaction costs.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Include as $5,000 monthly overhead from Month 1 through Month 60.	Treating the lease as flexible when revenue is low.
Software Licenses (Operations)	Semi-fixed	Start with the $2,000 monthly base, then step up when seats or tools expand.	Ignoring seat growth as headcount rises.
Legal & Compliance Retainer	Fixed	Include the $3,000 monthly retainer in launch-month break-even math.	Cutting compliance support out of the launch plan.
Utilities & Internet	Semi-variable	Use the $800 monthly base, with room for usage growth as operations scale.	Missing higher usage as staff and systems grow.
CEO, CTO, and Head of Compliance payroll	Fixed	Include $41,667 per month combined, based on $500,000 annual salaries.	Assuming leadership pay can stay unpaid forever.
Engineering, sales, marketing, and support payroll	Semi-fixed	Use $41,667 monthly in the first year, then step up with planned FTE growth.	Hiring ahead of trading volume.
Clearing House Fees	Variable	Model as 4.0% of revenue in the first year, falling to 3.0% by Year 5.	Treating trade-linked clearing fees as overhead.
Regulatory Transaction Fees	Variable	Model as 3.0% of revenue in the first year, falling to 2.0% by Year 5.	Forgetting that each trade adds fee drag.

How does break-even change from a lean launch to a full-service brokerage firm?

Scenario table

As the firm adds people and support, fixed costs rise faster than fee income, so break-even revenue moves up. The higher contribution margin in later years helps, but it does not fully offset the bigger overhead.

Planning assumptions only; actual break-even will move with client mix, hiring pace, and pricing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean digital-first launch	$176,000	$21,120	$154,967	88.0%	$0	Smallest overhead, but the margin for error is thin.
Base client-growth build	$393,000	$40,086	$352,466	89.8%	$0	This is the midpoint where scale starts to cover the core team.
Full-service scaled brokerage	$694,000	$58,990	$634,967	91.5%	$0	Higher margin helps, but the larger cost base keeps the bar high.

What breaks the break-even plan for a brokerage firm?

Stress test

The plan breaks first if client onboarding slows, trade volume comes in light, or clearing and data fees run hotter than planned. A 10% fixed-cost overrun or a jump in variable load can push monthly break-even from about $176,000 to about $182,000–$194,000.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; fixed costs stay at $154,967 and variable load stays at 120%.	$176,000	$0 gap	Break-even holds only if volume lands as planned.
Revenue shortfall	Revenue falls 15% to about $150,000 a month.	$176,000	$26,000 gap	Slower onboarding or weaker trade volume pushes a monthly loss.
Fixed-cost increase	Fixed costs rise 10% to about $170,000 a month.	$194,000	$18,000 gap	Payroll creep and office costs raise the break-even bar.
Margin pressure	Variable expenses rise to 150% of plan.	$182,000	$6,000 gap	Higher clearing or data fees eat most of the cushion.
Combined pressure	Revenue stays near $150,000, variable load rises to 150%, and fixed costs run 10% higher.	$194,000	$44,000 gap	Several small drags together can erase the monthly cushion.

Can you clear Month 6 break-even before you sign the lease and scale acquisition?

Founder checklist

Don't sign the lease or ramp spend until the model clears Month 6 with a $154K cash floor. The first-year test is whether $96.6K of monthly fixed load and about 12% variable costs still leave room to scale.

1Buyer CAC$100 CAC

Verify buyer acquisition stays near $100 before you scale the $500,000 buyer budget, because this is the cleanest proof that demand can grow without killing payback.

2Seller CAC$2,000 CAC

Verify seller acquisition stays near $2,000 before you release the $200,000 seller budget, because you need enough sell-side inventory to make the platform worth using.

3Fixed Load$96.6K/mo

Confirm monthly fixed load is about $96.6K, with $83.3K payroll and $13.3K overhead, and keep the $250K platform build and $100K initial licensing spend separate.

4Contribution Margin88% CM

Verify total variable cost stays near 12% of revenue, so the model keeps an 88% contribution margin to fund payroll and overhead.

5Launch Capacity8 FTE

Test clearing, custody, data feeds, onboarding, support, and supervision with the Year 1 team of 8 FTE before you add volume.

6Cash Floor$176K/mo

Hold at least $154K in cash by Month 6, which implies roughly $176K a month of revenue at an 88% margin, before you lock long commitments.