Information Security Break-Even Analysis: $86K/Month By Month 31

Fixed costs $54.7K/mo launch base

Contribution margin 78% after variable spend

Break-even revenue $70.1K/mo monthly target

Break-even timing Month 31 model crossover

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed costs against break-even for an information security service.

Lean Base Full

Monthly revenue More revenue gives more room to cover fixed overhead. $ Low revenue High revenue Variable expenses These are direct costs like commissions and training that rise with each client. $ Lower cost Higher cost

Money available to cover fixed costs $81,120 $104,000 revenue - $22,880 variable expenses

Margin ratio

78%

Covers fixed costs

Yes

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

Break-even chart Revenue Total costs

Which information security expenses are fixed, and which move with sales?

Cost classification

Break-even is only reliable when stable overhead stays fixed and revenue-linked items reduce contribution margin. In the first year, the modeled variable load is 22% of revenue before payroll, rent, and admin overhead.

Expense	Cost	Break-Even Treatment	Common Mistake
Launch payroll roles	Fixed	Use about $46.7k/month in first-year fixed overhead for the founder, lead architect, senior analyst, and sales manager.	Treating all labor as variable because client work changes by month.
Office Rent	Fixed	Include $3,500/month in fixed overhead from Month 1 through Month 60.	Dropping rent from break-even because it is not tied to delivery volume.
Legal & Accounting Services	Fixed	Include $1,500/month as recurring fixed overhead in the operating break-even model.	Modeling recurring compliance and accounting support as a one-time setup item.
General Software Subscriptions	Fixed	Use $1,000/month as fixed overhead while the subscription base stays within the planned range.	Treating all software as variable, even when the monthly subscription is stable.
Cloud Infrastructure Costs	Variable	Apply 8% of first-year revenue as a variable charge that lowers contribution margin.	Using one flat monthly cloud estimate instead of scaling it with revenue.
Technology & Software Licensing	Variable	Apply 7% of first-year revenue unless contracted minimums create a fixed floor.	Treating all licensing as fixed and overstating margin at higher sales volume.
Sales Commissions	Variable	Apply 5% of first-year revenue as a direct selling expense tied to closed sales.	Putting commissions in fixed payroll and hiding the true contribution margin.
Client Security Training Materials	Variable	Apply 2% of first-year revenue for client-facing training content and materials.	Forgetting onboarding materials, which makes each new customer look too profitable.

How does break-even change from a lean launch to a full operating model?

Scenario table

More retainers help, but each step up also adds payroll and tools. So break-even only improves if higher-priced compliance work lifts contribution margin (CM) faster than headcount.

Planning assumptions only; actual break-even will shift with retainers, staffing, and client mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$20.8k	$4.6k	$56.0k	78.0%	-$39.8k	Revenue sits well below the ~$71.8k break-even run rate, so losses stay heavy.
Base case	$143.0k	$26.6k	$115.7k	81.4%	$0.8k	Revenue is almost at the ~$142.2k break-even run rate, so a small close-rate lift matters.
Full scale	$419.1k	$63.7k	$191.1k	84.8%	$164.3k	Revenue sits above the ~$225.3k break-even run rate, so there’s a cushion.

What breaks the break-even plan for this information security service?

Stress test

Year 3 is barely above break-even, with only about a $10,000 monthly cushion. A 10% revenue dip, higher fixed costs, or a 5-point margin hit each flip the plan into a loss, and combined pressure gets ugly fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1,706,000	$10,000 cushion	Tiny cushion; one slow month can erase it.
Revenue shortfall	Monthly revenue falls 10% to $1,544,000.	$1,706,000	$162,000 gap	Slow renewals can wipe out the cushion.
Fixed-cost increase	Fixed costs rise 10% to $1,527,000 a month.	$1,876,000	$160,000 gap	Analyst overtime or higher tool spend raises the floor.
Margin pressure	Variable expenses rise 5 points, cutting margin to 76.4%.	$1,817,000	$101,000 gap	Subcontractor-heavy delivery pushes break-even up.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and margin drops 5 points.	$1,999,000	$455,000 gap	Three hits at once drive about a $348,000 monthly loss.

What should the founder verify before locking in the first big spend for information security services?

Founder checklist

Don’t add fixed cost until you have signed recurring work, a clear path to the model’s $861K monthly break-even revenue, and enough cash to survive the Month 30 dip. In this business, demand has to lead payroll, not follow it.

1Pipeline proof$861K/mo

Confirm signed recurring work can support the model’s break-even revenue, and keep Year 1 marketing at $150K until the channel proves it can scale toward $500K in Year 3.

2Fixed load$54.7K/mo

Year 1 payroll plus overhead runs about $54.7K/month before variable costs, so any lease or hire has to pay back fast.

3Margin check78%

Year 1 direct costs are 15% COGS plus 7% variable expense, so keep pricing and service mix strong enough to hold contribution margin near 78%.

4Launch capex$175K

Stage the $175K build across platform, equipment, lab, office, software, and web work so delivery is ready before full-scale selling.

5Capacity ramp1→5 FTE

Approve analyst hires only when recurring monitoring, escalation, and reporting work fills the next seat.

6Runway checkM30, -$456K

Protect cash because minimum cash reaches -$456K in Month 30, and use Month 31 break-even as the next funding checkpoint.