Group Health Insurance Brokerage Break-Even: $65K Monthly Revenue

Fixed costs $12.5K/mo Core overhead

Contribution margin 92.5% After variable spend

Break-even revenue $13.5K/mo Monthly target

Break-even timing Month 6 Launch ramp

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs to see where this brokerage breaks even.

Lean Base Full

Monthly revenue Monthly sales drive the margin that pays fixed costs. $ Low sales High sales Variable expenses Use direct costs that rise with revenue, like carrier fees and processing. $ Low direct cost High direct cost

Money available to cover fixed costs $240,919 $257,667 revenue - $16,748 variable expenses

Margin ratio

94%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly cost base that revenue must cover, including payroll and overhead. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which costs are fixed and which move with sales in a group health insurance brokerage?

Cost classification

Break-even works only if each expense follows the right sales driver. In the first year, fixed overhead sets the monthly hurdle, while revenue-linked fees reduce contribution margin on every closed group.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent and Facilities	Fixed	Use $4,500 per month from Month 1 through Month 60.	Scaling rent with revenue instead of treating it as a monthly hurdle.
Professional Liability Insurance	Fixed	Use $1,200 per month as recurring operating overhead.	Dropping it below the line and understating break-even overhead.
Software and Technology Subscriptions	Fixed	Use $3,500 per month unless the model adds a usage-based fee.	Calling all software variable without a sales-linked pricing driver.
State Licensing and Compliance Fees	Fixed	Use $800 per month as required compliance overhead.	Burying licensing inside generic admin and losing visibility.
Platform Integration and Data Processing	Variable	Apply 3.5% of revenue in the first year, then follow the annual percentage schedule.	Modeling it as fixed even though it moves with revenue volume.
Carrier Commissions and Referral Fees	Variable	Apply 4.0% of revenue in the first year, then use the declining annual rates.	Forgetting these fees reduces contribution margin on closed groups.
Annual Marketing Budget	Fixed	Treat the $180,000 first-year budget as planned monthly overhead unless tied directly to closed groups.	Counting all marketing as CAC-only spend and missing the monthly cash burn.
Licensed Benefits Advisor Payroll	Semi-fixed	Model payroll in headcount steps: 2.0 FTE in the first year, then 3.0 FTE in the second year.	Hiding producer pay, renewal support, and account work inside generic admin.

How does break-even change across lean, base, and full brokerage staffing paths?

Scenario table

Break-even moves mainly with fixed payroll and marketing, not with premium volume. In the base path, the model clears break-even at about $65.3k in monthly revenue; lean support lowers that bar, while the full team needs a much bigger revenue cushion.

Planning assumptions only. Actual results will shift with sales mix, retention, and staffing pace.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean outsourced-support path	$85.9k	$6.4k	$53.3k	92.5%	$26.1k	Lower overhead drops break-even to about $57.6k, so Year 1 revenue leaves a wider cushion.
Base Year 1 operating path	$85.9k	$6.4k	$60.4k	92.5%	$19.1k	Revenue sits about $20.6k above break-even, so the cushion is positive but not wide.
Full Year 5 staffed path	$450.8k	$24.8k	$142.5k	94.5%	$283.5k	Revenue is about $300.0k above break-even, so the larger team still has room.

What breaks the break-even plan for a group health insurance brokerage?

Stress test

The current plan keeps a $206K monthly cushion above break-even, so the first risk is a 24% sales drop. The next pressure points are higher overhead and more servicing or referral fees, which can erase that buffer fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$653K	$206K cushion	The plan clears break-even with room.
Revenue shortfall	Average monthly revenue falls 25% to $644K.	$653K	$9K gap	A small miss turns the month negative.
Fixed-cost pressure	Payroll, rent, software, or marketing rise 10% above the $604K base.	$719K	$140K cushion	Overhead moves break-even up fast.
Margin pressure	Carrier commissions, referral fees, and platform costs rise from 7.5% to 15% of revenue.	$711K	$148K cushion	Support drag starts to eat the cushion.
Combined pressure	Revenue falls 25%, fixed costs rise 10%, and variable load doubles to 15%.	$782K	$138K gap	This combination pushes the plan below break-even.

What should the founder verify before locking in the first big spend for this group health brokerage?

Founder checklist

Check that licensing, carrier access, and qualified employer demand are real before you lock in fixed costs. With $45.4K in monthly operating overhead, $225K in setup capex, and $655K minimum cash at Month 6, the model only works if pipeline and staffing ramp on time.

1License ReadyBefore launch

Confirm state licensing and professional liability coverage are in place before you sell or advise any employer group.

2Pipeline Proof$1.2K CAC

Verify qualified employer leads are real before you commit the $180K Year 1 marketing budget.

3Fixed Load$45.4K/mo

Make sure rent, software, compliance, and base payroll fit inside monthly overhead before you sign any long-term space or service contract.

4Margin Check92.5% CM

Test the fee mix so platform integration at 3.5% and carrier commissions at 4.0% still leave enough contribution to cover payroll and overhead.

5Staffing Ramp2 FTE

Add advisors and account support only when renewal and onboarding load justify it, since service capacity is the real constraint here.

6Cash Cushion$655K

Fund the $225K setup capex separately and keep runway through the Month 6 minimum cash point.