Commercial Construction Break-Even Analysis: Month 22 Target

Fixed costs $61.2K/mo Monthly overhead base

Contribution margin 89% After variable work

Break-even revenue $68.7K/mo Needed sales level

Break-even timing Month 22 First break-even

Break-even calculator

Use this calculator to test monthly revenue against variable expenses and the fixed cost base needed to break even.

Lean Base Full

Monthly revenue Revenue sets the pool that covers variable cost and overhead each month. $ Lower sales Higher sales Variable expenses These are direct project costs like subcontractor oversight and client acquisition. $ Lower costs Higher costs

Money available to cover fixed costs $89,700 $100,000 revenue - $10,300 variable expenses

Margin ratio

90%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your margin has to cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which commercial construction expenses are fixed, and which move with sales?

Cost classification

Break-even only works when monthly overhead stays separate from revenue-linked project costs. Rent and software set the fixed hurdle, while subcontractor oversight and client acquisition reduce contribution margin as sales rise.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $10,000 per month as baseline overhead from Month 1 through Month 60.	Linking rent to project revenue instead of keeping it in monthly overhead.
Utilities & Maintenance	Semi-variable	Start with the $1,500 monthly base, then watch usage as site and office activity grows.	Treating all utility spend as fixed when active projects can raise usage.
Professional Services	Fixed	Include $4,000 per month in the fixed break-even hurdle.	Moving legal and accounting into project budgets without a clear job-level trigger.
Software Subscriptions	Fixed	Use $3,000 per month as recurring operating overhead.	Classifying recurring subscriptions as startup setup spend or one-time CAPEX.
Insurance & Bonding Premiums	Semi-fixed	Model the $5,000 monthly base, then step it up when project scale or bonding needs rise.	Assuming premiums move smoothly with revenue instead of in coverage steps.
Marketing & Branding	Semi-fixed	Use $2,500 per month until a planned campaign or new market push changes the run rate.	Mixing steady brand spend with deal-specific client acquisition expense.
Subcontractor Management & Oversight	Variable	Apply 8.0% of revenue in the first year, falling to 6.0% by the fifth year.	Mixing project construction budgets with monthly overhead in the break-even model.
Business Development & Client Acquisition	Variable	Apply 3.0% of revenue in the first year, falling to 2.0% by the fifth year.	Treating sales-driven acquisition spend as fixed when it scales with revenue.

How does break-even shift from a lean single-project build to the full six-project pipeline?

Scenario table

The CM ratio is the share left after variable costs, so more projects raise the cushion faster than fixed overhead rises. Even then, the model does not clear break-even until Month 22.

Planning assumptions only; actual break-even shifts with backlog quality, sale timing, and cash capacity.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean: Office Tower only	$833k	$92k	$61.2k	89.0%	$680k	One project covers overhead, but the cushion is thin.
Base: first three projects	$2.3M	$237k	$97.8k	89.7%	$1.97M	This is the model's break-even case, so timing matters more than margin.
Full: six-project pipeline	$4.55M	$469k	$97.8k	89.7%	$3.98M	Best cushion, but collections still need to land on schedule.

What breaks first if revenue slips or costs rise?

Stress test

Fixed overhead is heavy from day one, and Year 1 contribution margin starts at 89%. A delay in project revenue, a $10,000 monthly overhead hike, or a 1-point margin drop can push break-even out and widen cash burn.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$68,700	$0 cushion	Minimum cash still reaches -$22.64M, so outside funding has to cover the ramp to Month 28 payback.
Revenue shortfall	First project sale slips past Month 22.	$68,700	$68,700 gap	One missed month keeps fixed costs uncovered and pushes breakeven later.
Fixed-cost pressure	Overhead rises by $10,000 per month.	$79,900	$11,200 gap	Extra overhead lifts monthly break-even fast, before revenue can catch up.
Margin pressure	Contribution margin falls 1 point to 88%.	$69,500	$800 gap	Small fee creep still raises the break-even line and trims cash room.
Combined pressure	Sale timing slips, overhead rises $10,000, and margin falls to 88%.	$80,900	$12,200 gap	Cash can sink to -$22.64M, Year 2 EBITDA is -$21.715M, and payback stretches past 28 months.

What must a commercial construction founder verify before signing the lease and hiring the first team?

Founder checklist

Don't lock the lease or hiring plan until you have signed backlog before Month 7 and cash to absorb the Month 21 trough. Break-even lands in Month 22, so the setup has to survive the gap first.

1BacklogBefore Month 7

Verify signed or high-probability work is lined up before the first construction start, or the lease and crew costs will outrun demand.

2Lease Load$27K/mo

Test the full fixed overhead, not just the $10K office rent, because those costs start in Month 1 and hit cash before project revenue scales.

3Margin Load89% CM

Keep project-specific subcontractor management and client acquisition at 11.0% of revenue in Year 1, so contribution margin stays strong enough to cover overhead.

4Hiring Ramp$410K to $850K

Stage hiring only if the pipeline can carry payroll from $410K in Year 1 to $850K in Year 2 without pushing fixed costs ahead of booked work.

5Cash Floor-$22.64M

Check that working capital can survive the Month 21 cash low, because that is the real stress point before the Month 22 breakeven mark.

6Capex Timing$365K

Review the $365K launch capex in phases and delay vehicles if field use is not tied to active jobs, so equipment does not sit idle.