Cost Segregation Study Service Break-Even: $79K Monthly Revenue

Fixed costs $55.2K/mo Base monthly load

Contribution margin 74.5% After variable costs

Break-even revenue $74.1K/mo Monthly target

Break-even timing Month 7 Launch ramp point

Break-even calculator

Test monthly revenue, direct costs, and fixed overhead against break-even for a cost segregation study service.

Lean Base Full

Monthly revenue Use this as the monthly fee and project revenue the model has to absorb. $ Lower sales Higher sales Variable expenses Enter direct costs that rise with each study, review, or advisory hour. $ Lower direct cost Higher direct cost

Money available to cover fixed costs $190,198 $245,417 revenue - $55,219 variable expenses

Margin ratio

77%

Covers fixed costs

Yes

Fixed monthly costs Enter the monthly overhead and payroll the margin must cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in this study service?

Cost classification

Break-even is only reliable when delivery expenses stay below the margin line and overhead stays fixed. Here, first-year non-payroll overhead is $11,000/month before payroll, while commissions, travel, and research materials move with revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Lease	Fixed	Include $6,500/month in non-payroll overhead.	Treating rent as project delivery spend.
Professional Liability Insurance	Fixed	Include $1,200/month in fixed overhead.	Leaving required insurance out of break-even math.
Principal Tax Strategist Payroll	Fixed	Include $175,000/year, or about $14,583/month, before revenue ramps.	Ignoring senior salary load in early months.
Referral Partner Commissions	Variable	Deduct 10.0% of revenue before contribution margin.	Treating referral demand as free revenue.
Site Inspection Travel and Logistics	Variable	Model as 8.5% of first-year revenue, falling to 6.5% by the mature year.	Burying travel inside fixed overhead.
Specialized Tax Research Materials	Variable	Model as 3.0% of first-year revenue, falling to 1.0% by the mature year.	Assuming research needs do not rise with jobs.
Annual Marketing Budget	Semi-fixed	Plan $45,000 in the first year, or $3,750/month, then step up by year.	Cutting spend without replacing lead flow.

How does break-even change from a lean launch to a base ramp and a full staffed model for this cost segregation service?

Scenario table

Lean leaves little cushion, base is the first clean break-even case, and full has the widest spread between revenue and fixed load. Here’s the quick math: revenue scale helps, but added payroll raises the bar too.

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

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean founder-led launch	$87.0K	$22.2K	$55.2K	74.5%	$9.6K	Tight cushion; a small sales dip can erase profit.
Base referral ramp	$175.4K	$42.1K	$71.8K	76.0%	$61.5K	Month 7 is the break-even signal once referrals repeat.
Full staffed scale	$448.8K	$87.5K	$135.6K	80.5%	$225.7K	Wide cushion; the model can absorb more hiring.

What breaks the break-even plan if sales slip or costs run hot?

Stress test

At about $87K of monthly revenue, the plan has only a modest cushion over roughly $58.9K of fixed monthly costs. A 10% revenue dip, a 10% overhead jump, or a 5-point margin slide can push it to break even fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$79,100	$7,900 cushion	The base case clears break even, but the cushion is not wide.
Revenue shortfall	Monthly revenue drops 10% to about $78.3K.	$79,100	$800 gap	Weaker referral flow or slower conversion can wipe out the margin.
Fixed-cost pressure	Fixed overhead rises 10% to about $64.8K per month.	$86,900	$100 cushion	Hiring ahead of signed work leaves almost no room for error.
Margin pressure	Variable expense load rises 5 points, cutting margin to 69.5%.	$84,700	$2,300 cushion	Higher travel and research spend cut the buffer fast.
Combined pressure	Revenue drops 10%, fixed overhead rises 10%, and margin falls to 69.5%.	$93,300	$15,000 gap	All three hits together push the model well past break even.

Can the referral pipeline support break-even before you lock in the lease and hiring ramp?

Founder checklist

Before you commit to the lease and full headcount, prove you can book at least 11 study-equivalent jobs a month with signed work, not just warm leads. The model only clears break-even in Month 7 if demand, staffing, and cash all hold together.

1Referral flow11 jobs/mo

Verify referral partners can deliver 11 study-equivalent jobs a month in signed work, because soft leads do not pay the lease or cover the Month 7 break-even target.

2Fixed load$55.2K/mo

Check the fixed load at about $55.2K a month, including $6.5K lease and $44.2K base payroll, so you know the revenue floor before adding more staff.

3Margin check75% CM

Hold Year 1 contribution near 75%, since direct costs total about 25.5% from travel, database, commissions, and research; if that slips, break-even moves fast.

4Capacity plan35 hrs/study

Test that one study can clear 35 billable hours without senior bottlenecks, and line up contractors or reviewers before you add full-time heads.

5Cash runway$667K

Keep at least $667K of cash through Month 6, because the model does not reach breakeven until Month 7 and weak collections can blow up the runway.

6Build spend$143.5K capex

Control the $143.5K buildout and avoid inventory planning, since this is a service business and the software and equipment spend only works if demand is already showing up.