Fraud Detection Service Break-Even Analysis: $199K Monthly Revenue

Fixed costs $121.6K/mo Overhead plus payroll

Contribution margin 80% After variable costs

Break-even revenue $152.0K/mo Monthly target

Break-even timing Month 5 Model break-even

Break-even calculator

Test whether monthly revenue covers variable expenses and fixed costs, and see where break-even lands.

Lean Base Full

Monthly revenue Revenue is the cash coming in each month before direct costs and overhead. $ Lower sales Higher sales Variable expenses These are direct costs that rise with revenue, like cloud, data access, commissions, and support. $ Lower direct Higher direct

Money available to cover fixed costs $623,805 $771,083 revenue - $147,278 variable expenses

Margin ratio

81%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the business has to cover before profit starts. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which fraud detection expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful if data fees, screening load, support, and commissions rise with volume instead of sitting in fixed overhead. In this model, fixed monthly overhead is $27,000 before payroll, while first-year payroll adds about $94,583/month.

Expense	Cost	Break-Even Treatment	Common Mistake
Office rent and utilities	Fixed	Use $12,000/month from Month 1 through Month 60 before calculating contribution margin.	Scaling rent with revenue instead of space capacity.
Cybersecurity insurance	Fixed	Use $3,500/month as recurring operating overhead in the monthly break-even base.	Leaving required security coverage out of fixed burn.
Legal and regulatory compliance	Fixed	Use $5,000/month as a baseline compliance load before sales volume changes.	Treating compliance as optional until enterprise customers arrive.
Software subscriptions	Fixed	Use $2,500/month within the current planning range and revisit when seats or tools step up.	Calling all software variable because user seats may grow later.
First-year payroll	Fixed	Use about $94,583/month, based on $1,135,000 in first-year salaries divided by 12.	Omitting salaried product, engineering, sales, and success staff from break-even.
Cloud infrastructure and hosting	Variable	Deduct 8.0% of revenue in the first year, declining to 6.0% in the mature year.	Modeling hosting as flat while transaction screening volume rises.
Data consortium access fees	Variable	Deduct 4.0% of revenue in the first year, declining to 3.0% in the mature year.	Treating volume-based data fees as fixed.
Customer success and support coverage	Semi-variable	Keep base manager coverage in payroll, then add outsourced support at 3.0% of revenue in the first year and 2.0% in the mature year.	Treating support as all fixed when client tickets rise with usage.

How does break-even shift from a lean launch to base growth and full capacity?

Scenario table

Break-even moves as revenue, pricing mix, and staffing change. The lean case clears the about $199K first-year monthly threshold, the base case widens the cushion, and full capacity has the strongest buffer but the heaviest payroll load.

Scenario figures are planning assumptions built from the model, not guarantees; pricing, mix, and headcount can move break-even fast.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch model	$348K	$70K	$174K	80%	$104K	Clear of break-even, but the cushion is modest.
Base growth model	$756K	$136K	$334K	82%	$286K	Healthy cushion; higher payroll is covered at this scale.
Full-capacity model	$1.54M	$246K	$546K	84%	$745K	Strong cushion, though the larger team keeps fixed costs high.

What breaks the break-even plan if revenue slows or costs creep up?

Stress test

At $348K average monthly revenue, the plan has about a $149K cushion over a $199K break-even. Slower onboarding, more false positives, higher fixed costs, and manual review hours rising faster than contract revenue are the main ways that cushion shrinks.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$199,000	$149,000 cushion	Healthy cushion if onboarding stays on pace.
Revenue shortfall	Monthly revenue falls 20% to about $278K.	$199,000	$79,000 cushion	Still above break-even, but with less room for slippage.
Fixed-cost pressure	Fixed costs rise 10% to about $175K a month.	$219,000	$129,000 cushion	Rent, insurance, and compliance creep tighten the margin.
Margin pressure	Variable expenses rise from 20% to 25% of revenue.	$212,000	$136,000 cushion	Higher cloud, data, or support spend pushes break-even up.
Combined pressure	Revenue falls 20%, fixed costs rise 10%, and variable expenses move to 25%.	$233,000	$45,000 cushion	Slower onboarding or more false positives could erase the cushion.

What should you verify before committing to the first-year marketing spend and launch build?

Founder checklist

Before you lock in the $450K first-year marketing budget and the launch build, make sure the pipeline, CAC, staffing, and cash reserve fit the Month 5 break-even path. If one of those slips, the model gets tight fast.

1Pipeline$450K

Verify recurring contract demand can support the first-year marketing spend before you scale paid acquisition.

2CAC$1,200

Check that customer acquisition cost stays near $1,200 before you widen paid channels.

3Funnel2.5% / 15.0%

Test visitor-to-trial and trial-to-paid conversion, because weak funnel rates break the revenue ramp.

4Load Test5,000 / 25,000 / 200,000 tx

Confirm support, rule tuning, and data access can handle entry, mid, and enterprise transaction loads.

5Payroll$94.6K/mo

Staff against the first-year payroll run rate so headcount does not outrun sales before break-even.

6Runway$391K

Keep at least $391K of cash for the Month 5 dip, and keep the $550K launch build separate from monthly burn.