Construction Company Break-Even Analysis: $786K Monthly Revenue

Fixed costs $11.6K/mo Overhead base

Contribution margin 76% After variable costs

Break-even revenue $15.3K/mo Monthly target

Break-even timing Month 7 Model crossover

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even.

Lean Base Full

Monthly revenue Revenue sets the pool that pays variable costs and fixed overhead. $ Low sales High sales Variable expenses Direct project costs like supervision, equipment rental, permits, and software rise with sales. $ Low direct cost High direct cost

Money available to cover fixed costs $55,936 $73,600 revenue - $17,664 variable expenses

Margin ratio

76%

Covers fixed costs

$1,706 short

Fixed monthly costs These monthly costs stay in place even when project volume slows. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales for this construction business?

Cost classification

Break-even is only reliable if field costs reduce contribution margin and overhead stays below the line. Misclassifying leases, insurance, or payroll as job-level spend can make Month 7 break-even look easier than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Include $4,500/month in baseline overhead before calculating required gross profit.	Allocating rent to jobs and understating true monthly overhead.
Business Insurance	Fixed	Include $1,200/month as recurring overhead across the planning range.	Treating insurance like a project charge instead of a standing obligation.
Permit & Regulatory Fees	Variable	Reduce contribution margin by 4% of revenue in the first year.	Leaving permit fees out of bid margin math.
Direct Project Supervision & Quality Control	Variable	Model as 8% of revenue in the first year because it rises with active project volume.	Putting all supervision in overhead and overstating job contribution.
Specialized Equipment Rental (Project-Specific)	Variable	Model as 7% of revenue in the first year for project-specific equipment needs.	Assuming rented equipment is covered by fixed fleet spending.
Project Manager Payroll	Semi-fixed	Add payroll in capacity steps, from 1.0 FTE in the first year to 2.0 FTE by the third year.	Scaling payroll smoothly with revenue instead of adding staff before revenue catches up.
Site Supervisor Payroll	Semi-fixed	Model staffing jumps from 1.0 FTE in the first year to 3.0 FTE by the fifth year.	Classifying supervisors as fully variable when they are capacity commitments.
Skilled Tradesperson (Core Team) Payroll	Semi-fixed	Treat the core crew as capacity payroll, rising from 1.0 FTE to 2.0 FTE by the third year.	Mixing core payroll with subcontracted field labor and hiding break-even risk.

How does break-even change across lean, base, and full scenarios for a construction company?

Scenario table

Break-even moves fast because revenue, crew load, and project mix change together. Lean barely misses coverage, base lands on break-even, and full creates a wide cushion only if labor, permits, and equipment rental stay on plan.

Planning assumptions only; actual break-even will move with project timing, labor use, and rental costs.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean backlog plan	$764K/month	$183K/month	$597K/month	76%	-$17K/month	Near break-even; a small delay or overrun turns cash negative.
Base break-even plan	$786K/month	$189K/month	$597K/month	76%	$0/month	At break-even; any slip in utilization pushes a loss.
Full staffed production	$2,553K/month	$562K/month	$772K/month	78%	$1,219K/month	Strong cushion if staffing, permits, and rentals stay on plan.

What breaks the break-even plan first for this construction company?

Stress test

The plan sits right on the edge at about $786K of revenue and a 76% contribution margin. A 10% revenue drop or a 10% overhead bump each opens a real gap, and labor, insurance, and rental overruns make that gap widen fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$786K	$0 cushion	At plan, break-even is tight.
Revenue shortfall	Revenue falls 10% to about $707K.	$786K	$60K gap	Delayed starts and weak backlog hurt fast.
Fixed-cost pressure	Fixed costs rise 10% to about $657K.	$864K	$78K gap	Overhead creep pushes break-even up.
Margin pressure	Variable expenses rise from 24% to 29%.	$841K	$55K gap	Labor, fuel, and rental overruns squeeze margin.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and margin drops to 71%.	$925K	$155K gap	All three pressures break the plan.

Should you buy the trucks and open the workshop before the project pipeline can fund break-even?

Founder checklist

Don’t commit to trucks, the workshop, or a full-time team until signed and likely work can cover about $786K a month, and cash stays above $462K through Month 7. The first $345K of setup capex is real cash burn, not paper spend.

1Signed Work$786K/mo

Verify signed and likely jobs can support at least $786K/month, because below that the fixed build outruns revenue.

2Fixed Burn$57.6K/mo

Verify office, vehicles, software, insurance, and payroll stay near $57.6K/month before project costs, because this is the burn that must clear every month.

3Direct Margin76% CM

Verify Year 1 pricing and direct labor keep costs near 24% of revenue, so contribution margin stays around 76% and can fund overhead.

4Launch Team6.0 FTE

Verify the launch team can cover sales, estimating, field work, admin, and skilled labor at 6.0 FTE without gaps that slow delivery.

5Cash Cushion$462K

Verify you can hold at least $462K of cash through Month 7, since the model’s minimum cash point lands there.

6Bid Pipeline10 customers

Verify the Year 1 $25K marketing plan at a $2.5K CAC can produce about 10 customers, and that the bid pipeline, subcontractor coverage, permits, and insurance are already in motion.