Building Contractor Break-Even Analysis: $246K Monthly Revenue

Fixed costs $7.3K/mo Base overhead only

Contribution margin 82% After variable costs

Break-even revenue $8.9K/mo Monthly target

Break-even timing Month 4 Model breakeven

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs to see when a building contractor breaks even.

Lean Base Full

Monthly revenue Revenue is the pool that has to cover direct costs and overhead. $ Low volume High volume Variable expenses These are direct project costs that rise with more work. $ Tighter jobs Costlier jobs

Money available to cover fixed costs $47,675 $58,140 revenue - $10,465 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base contribution margin must cover. $ Lean overhead Higher overhead

Break-even chart Revenue Total costs

Which building contractor expenses are fixed and which move with sales at break-even?

Cost classification

Break-even is reliable only if job costs stay out of overhead. Keep rent and core admin as fixed, but tie permits, site travel, field capacity, and project-linked fees to job volume.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Include $3,500 per month in fixed overhead before calculating required gross profit.	Allocating rent to each job and hiding the true monthly hurdle.
Business Insurance	Fixed	Include $800 per month as fixed overhead for the monthly planning range.	Treating insurance as job-based when it does not rise with each project.
General Software Subscriptions	Fixed	Include $500 per month as recurring overhead, not as a project charge.	Spreading software across jobs and overstating project-level margin.
Professional Services	Fixed	Include $1,000 per month for accounting and legal support in fixed overhead.	Leaving admin support out of break-even because it is not tied to one job.
Project-Specific Subcontractor Oversight	Variable	Reduce contribution margin by 5.0% in the first year because it moves with project revenue.	Burying field oversight inside overhead and overstating job profitability.
Project-Specific Permitting & Compliance Fees	Variable	Reduce contribution margin by 3.0% in the first year because fees are project-linked.	Averaging permits into overhead and missing low-margin jobs.
Vehicle Maintenance & Fuel Base Plus Site Visits	Semi-variable	Split the $700 monthly vehicle base from project-specific travel and site visits at 4.0%.	Putting all travel in overhead instead of separating base fleet cost from job mileage.
Project Delivery and Sales Payroll Steps	Semi-fixed	Add payroll in steps as roles start: project manager, site supervisor, estimator, and business development staff.	Burying labor capacity inside overhead instead of modeling each staffing step.

How does break-even change from a lean contractor setup to base scale and full capacity?

Scenario table

As the team gets bigger, fixed costs rise, so the business needs more monthly revenue to stay safe. Stronger margin helps, but backlog flow and billing timing still decide how much cushion you really have.

Planning assumptions only. These figures show modeled break-even scenarios, not guaranteed results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean first-year contractor setup	$246k	$44.3k	$20.2k	82%	$181.5k	Low overhead keeps the break-even bar lower, but delays can still tighten cash.
Base scale contractor build	$578k	$92.5k	$48.6k	84%	$437.0k	This is the first real scale step, so steady backlog is what protects the cushion.
Full capacity contractor build	$855k	$119.7k	$73.6k	86%	$661.8k	Highest cushion on paper, but only if the larger team stays fully fed with billable work.

What breaks the contractor's break-even plan?

Stress test

The plan breaks first on timing: with about $20,175 of fixed overhead and an 82% contribution margin, break-even is roughly $24.6k a month. Delayed starts, higher travel and site costs, or fee disputes can turn a thin cushion into a loss.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$24.6k	$0 gap	Any slip below this turns into a loss.
Revenue shortfall	Monthly revenue falls 20% from $30k to $24k.	$24.6k	$604 gap	A small delay or weaker close leaves no cushion.
Fixed-cost increase	Fixed overhead rises 10% to $22.2k a month.	$27.1k	$2.9k cushion	Higher overhead eats most of the room to breathe.
Margin pressure	Variable expenses rise from 18% to 23%.	$26.2k	$3.8k cushion	Fee creep and rework push break-even up fast.
Combined pressure	Revenue falls to $24k while overhead rises 10% and variable expenses move to 23%.	$28.8k	$4.8k gap	A slow start and cost creep create a monthly loss.

Can this contractor support the overhead before the lease and fleet are locked in?

Founder checklist

Don’t commit to the overhead until the backlog, cash, and staffing can carry the Year 1 load. Before bidding, make sure the work, insurance, lease, and equipment plan fit the $246,000 monthly break-even target.

1Backlog Proof$246K/mo

Verify you already have signed or near-signed work that can cover monthly break-even revenue before you add more overhead.

2Fixed Load$20.2K/mo

Confirm the Year 1 fixed load stays at $20,175 a month and the $150,000 launch capex is funded before you lock the lease, vehicles, tools, and software.

3Margin Stack82% left

Check that project-specific oversight, permits, travel, and sales fees stay near 18% of revenue so enough stays above the line to cover overhead.

4Staff RampMonth 13 PM

Confirm backlog can absorb the move from 1.0 CEO/Lead Project Manager and 0.5 administrative support in Year 1 before the full Project Manager starts in Month 13.

5Cash Cushion$832K min

Verify you can hold at least the Month 2 minimum cash of $832,000 because the low point hits before the team and equipment ramp are fully productive.

6Launch Demand$12K / $1.2K CAC

Check that Year 1 marketing at $12,000 and a $1,200 CAC can still feed enough early jobs while referrals and repeat work build.