HR Consulting Break-Even Analysis: Cover Costs At $35K/Month

Fixed costs $26.3K/mo Core monthly base

Contribution margin 81% After direct costs

Break-even revenue $32.5K/mo Revenue target

Break-even timing Month 18 Model break-even

Break-even calculator

Use this calculator to test whether monthly revenue covers variable expenses and the fixed monthly cost base.

Lean Base Full

Monthly revenue Revenue is the cash coming in before direct costs. $ Lower revenue Higher revenue Variable expenses These are direct costs that rise with client work, like travel, training, and outside specialist fees. $ Lower costs Higher costs

Money available to cover fixed costs $8,384 $10,225 revenue - $1,841 variable expenses

Margin ratio

82%

Covers fixed costs

$41,916 short

Fixed monthly costs This is the monthly cost base revenue must cover, including rent, software, insurance, admin, and payroll. $ Lower fixed Higher fixed

Break-even chart Revenue Total costs

Which HR consulting expenses are fixed, and which move with sales?

Cost classification

Break-even gets reliable only when payroll, rent, delivery fees, and marketing are placed in the right buckets. Misclassify one large item, and Month 18 break-even can look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Lead HR Consultant / Founder salary, $150,000/year	Fixed	Include as recurring monthly overhead of $12,500 before testing break-even revenue.	Treating founder pay as optional after launch.
Senior HR Consultant payroll, 0.5 FTE in Year 1	Semi-fixed	Add as a capacity step; Year 1 base payroll is $50,000 before scaling to higher FTE levels.	Modeling consultant payroll as fully variable with client revenue.
Administrative Assistant payroll, 0.5 FTE in Year 1	Semi-fixed	Carry the Year 1 support capacity as $22,500, then step up when staffing increases.	Leaving admin support out until the firm is profitable.
Office Rent, $3,500/month	Fixed	Use the full monthly rent in overhead because it runs from Month 1 through Month 60.	Spreading rent only across billable client hours.
Technology & Software Subscriptions, $1,200/month	Fixed	Treat as fixed overhead unless a separate client-seat charge is added to the model.	Calling all software variable without a usage driver.
Third-Party Specialist Fees, 8% of Year 1 revenue	Variable	Deduct from revenue as a delivery expense that rises with client work.	Budgeting it as a flat monthly contractor allowance.
Client-Specific Software Licenses, 4% of Year 1 revenue	Variable	Apply as a revenue-linked delivery charge for client-specific tools.	Mixing client licenses into fixed subscription overhead.
Annual Marketing Budget, $15,000 in Year 1	Semi-variable	Keep the planned spend in the model, then test customer acquisition cost against new clients.	Cutting marketing after launch and still assuming client growth.

How does break-even change across lean, base, and full-service HR consulting?

Scenario table

Break-even rises as fixed payroll grows and the cost mix shifts. Retainer density and staff utilization matter more than top-line growth.

Scenario figures are planning assumptions, not guarantees, and they can move with client mix, staffing, and contractor use.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean HR Consulting	$347K	$83K	$263K	76%	$0	Low fixed load, but retainer density still has to hold.
Core HR Consulting	$529K	$111K	$418K	79%	$0	This is the tightest planning case, so utilization must stay disciplined.
Full-Service HR Consulting	$804K	$96K	$707K	88%	$0	Best margin, but higher payroll makes underused staff expensive.

What breaks the break-even plan for this HR consulting firm?

Stress test

The base plan is almost flat at $347K revenue against about $346K break-even. A 10% revenue miss opens a $26K gap, and 29% variable expense or a 10% overhead hike pushes break-even to roughly $371K to $381K.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$346K	$1K cushion	The plan is basically at breakeven.
Revenue shortfall	Revenue falls 10% to about $312K.	$346K	$26K gap	A small top-line miss wipes out the cushion.
Fixed cost increase	Fixed overhead rises 10% to about $289K.	$381K	$34K gap	Overhead creep pushes the plan below breakeven.
Margin pressure	Variable expenses rise to 29% of revenue.	$371K	$24K gap	Higher contractor fees and travel cut the margin.
Combined pressure	Revenue falls 10% and fixed overhead rises 10%.	$381K	$68K gap	Delayed retainers and cost creep can erase the year-one cushion.

Can you sign enough HR consulting work to cover payroll before you add full-time staff and office overhead?

Founder checklist

Do not add heavier overhead until the signed pipeline covers break-even and the cash plan reaches the Month 18 trough. The model only works if demand, pricing, and staffing all hold together.

1Signed Pipeline14 retainer eq.

Verify you have signed work equal to at least 14 retainer equivalents, or about 7 projects, before you add heavier payroll.

2Unit Margin76% CM

Check that each billed hour keeps about 76% after specialist fees, software, travel, and training, or scopes will push breakeven out.

3Fixed Load$25.1K/mo

Keep the current office, admin, tech, insurance, and payroll load near $25.1K a month until revenue is repeatable.

4Staff RampMonth 13

Keep the contractor bench through Month 12 and delay the junior consultant and marketing hire until utilization is proven in Month 13.

5Cash Runway$694K

Hold at least $694K of cash runway, because the model does not reach breakeven until Month 18 and Year 1 EBITDA is -$151K.

6CAC Test$1.5K CAC

Check customer acquisition cost (CAC) stays near $1,500, because a $15,000 Year 1 marketing budget only buys about 10 customers.