Due Diligence Service Break-Even Analysis: Month 6 At $220K/Mo

Fixed costs $156.5K Payroll plus overhead

Contribution margin 73%-81% Modeled range

Break-even revenue $214.4K Monthly cover target

Break-even timing Month 6 Ramp point

Break-even calculator

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

Lean Base Full

Monthly revenue Revenue is the cash base that has to absorb variable and fixed costs. $ Lower sales Higher sales Variable expenses These are direct deal costs that rise with more work. $ Tight costs Heavy costs

Money available to cover fixed costs $606,439 $787,583 revenue - $181,144 variable expenses

Margin ratio

77%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead break-even must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which expenses are fixed, and which move with sales for a due diligence investigation service?

Cost classification

Your break-even holds only if fixed overhead stays separate from deal-linked charges. In this model, first-year fixed payroll is about $133.3k/month, while expert fees at 12% of revenue can erode margin as engagements grow.

Expense	Cost	Break-Even Treatment	Common Mistake
Financial District Office Rent	Fixed	Include $15,000/month in the overhead floor that must be covered before profit.	Spreading rent only across signed engagements and understating slow-month risk.
Enterprise IT and Cybersecurity	Fixed	Include $2,500/month as required security overhead from Month 1 through Month 60.	Treating security tools like deal software instead of baseline operating infrastructure.
Legal and Audit Retainer	Fixed	Include $3,000/month in fixed overhead, regardless of monthly engagement count.	Leaving retainers below the line and overstating EBITDA at break-even.
First-Year Staff Payroll	Fixed	Use $1.6 million/year, or about $133,333/month, as capacity committed before utilization improves.	Modeling all labor as variable and missing the cash drag from idle staff.
Expert Network Subcontractor Fees	Variable	Apply 12% of revenue in the first year as a direct margin deduction.	Treating expert fees as fixed hides margin risk when larger investigations need more outside specialists.
Deal Travel and Client Entertainment	Variable	Apply 6% of revenue in the first year because the model ties this spend to engagement activity.	Burying travel in general overhead and missing deal-by-deal profitability leaks.
Professional Liability Insurance Premiums	Variable	Apply 4% of revenue in the first year as modeled, so it scales with sales volume.	Using one flat annual number when the model treats premiums as revenue-linked.
Marketing and Thought Leadership Content	Semi-fixed	Start with the approved $4,000/month base, then review step-ups as sales capacity expands.	Assuming marketing rises smoothly with revenue instead of approving clear budget steps.

How does break-even change across lean, base, and full utilization for a due diligence investigation firm?

Scenario table

Break-even gets easier as utilization rises because revenue scales faster than the fixed payroll and office load. The catch is cash timing: even profitable consulting work can strain working capital when collections lag.

Scenario figures are planning assumptions based on the model, not a guarantee of results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch control	$196k	$53k	$134k	73%	$9k	Near break-even; one delayed engagement can wipe out profit.
Base funded ramp	$314k	$85k	$191k	73%	$38k	Hits break-even by Month 6, but cash timing still matters.
Full proven pipeline	$1.32M	$252k	$506k	81%	$566k	Strong cushion, but collections still drive cash timing.

What breaks the break-even cushion for this due diligence firm?

Stress test

The cushion holds at the base plan, but it can vanish fast if mandates slow, fixed overhead drifts up, or the mix shifts toward heavier verification work. Year 1 averages about $314k a month, so the $220k break-even point leaves about $94k of room.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$220k	$94k cushion	Base revenue clears break-even with room to absorb variance.
Revenue shortfall	Monthly revenue falls to $220k as mandates slow.	$220k	$0 cushion	EBITDA cushion disappears once revenue meets break-even.
Fixed-cost increase	Monthly overhead rises by $10k, mainly from rent or staffing.	$234k	$80k cushion	Fixed-cost creep narrows the cushion even if revenue holds.
Margin pressure	Variable expenses rise from 27% to 32% of revenue.	$236k	$78k cushion	Higher subcontractor and travel spend cuts contribution margin.
Combined pressure	Revenue falls to $220k, overhead rises $10k, and variable expenses rise to 32%.	$251k	$31k gap	The model slips back under break-even and cash strain can hit Month 6.

Can you prove 3 engagements a month before you lock in hiring, office, and research spend?

Founder checklist

Don't lock in office, software, or hiring until the pipeline can support the model's $27.2K monthly fixed load. In Year 1, about 3 engagements a month at the modeled mix gets you close to break-even, but only if cash still covers the Month 6 trough of $352K.

1Pipeline proof3/mo

Confirm you can close three engagements a month, because that pace only works if the blended engagement value stays strong enough to cover fixed burn.

2Monthly burn$27.2K/mo

Keep rent, IT, marketing, legal, telecom, and admin at this level before you sign long commitments, because this is the cash burn the business must clear each month.

3Contribution73%

Hold travel at 6% and expert network fees near 12% of revenue, plus data and insurance in line, or the margin left for overhead will shrink fast.

4Case depth250h/case

Make sure specialists can cover a 250-hour full-scope case without delay, because delivery depth is the product and missed deadlines hurt repeat work.

5Cash floor$352K

Carry the modeled cash trough into launch, since the plan does not hit its minimum cash point until Month 6.

6Launch demandMonth 1

Require signed work before you add staff or long-term spend, and keep the statement of work tight, because this business needs real billable projects at launch.