Internal Communications Agency Break-Even: About $51K/Month

Fixed costs $30.9K Monthly fixed base

Contribution margin 72% After variable spend

Break-even revenue $43.0K Monthly target

Break-even timing Month 9 Model payback point

Break-even calculator

Test how monthly revenue, direct costs, and overhead compare with break-even for an internal communications agency.

Lean Base Full

Monthly revenue Revenue is the top line that creates margin to cover overhead. $ Lower sales Higher sales Variable expenses These are the costs that rise with each extra dollar of work. $ Light costs Heavy costs

Money available to cover fixed costs $67,000 $90,000 revenue - $23,000 variable expenses

Margin ratio

74%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that margin must cover. $ Lean overhead Heavier overhead

Break-even chart Revenue Total costs

Which expenses are fixed, and which move with client revenue?

Cost classification

Classify payroll capacity and rent as fixed or semi-fixed, and treat 8% specialist fees plus 3% project software as revenue-linked. If contractor delivery sits in overhead, Month 9 break-even can look cleaner than it really is.

Expense	Cost	Break-Even Treatment	Common Mistake
CEO / Lead Strategist payroll	Fixed	Include the $180,000 annual salary in monthly fixed overhead.	Leaving leadership pay out because the founder also sells or delivers work.
Senior Communications Consultant payroll	Fixed	Treat the $120,000 annual salary as fixed delivery capacity in the current staffing plan.	Moving senior consultant payroll into variable expense just because hours are billable.
Content Creator / Manager payroll	Semi-fixed	Model the first-year 0.5 FTE as a capacity step that rises when content workload grows.	Turning the half-time role into a revenue percentage.
Operations & Admin Support payroll	Semi-fixed	Model the 0.5 FTE as overhead that increases in staffing steps, not by project.	Spreading admin pay across projects as if every dollar scales with sales.
Office rent	Fixed	Include $3,000 per month in fixed overhead for the break-even base.	Putting rent into project margin and understating required revenue.
Third-Party Specialist Fees	Variable	Apply 8% of revenue in the first year as revenue-linked delivery spend.	Treating contractor delivery as overhead instead of revenue-linked spend.
Project-Specific Software Licenses	Variable	Apply 3% of revenue in the first year when licenses are tied to client projects.	Blending project tools with general software subscriptions.
Marketing & Business Development	Semi-variable	Use the 15% of revenue assumption, then check it against the annual marketing budget.	Classifying all marketing as fixed or all customer acquisition spend as delivery expense.

How does break-even move from a lean launch to a full-service internal communications agency?

Scenario table

Lean stays close to break-even with lighter payroll and more contractor use. As the team adds in-house delivery, the margin improves, but the monthly revenue floor climbs fast.

Planning-only scenarios. Figures are modeled assumptions, not guarantees, and actual break-even will shift with client mix, staffing timing, and contractor use.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch, founder-led retainers	$50.7k	$14.2k	$36.5k	72.0%	$0	Lowest revenue floor, but still tight.
Base team, mixed delivery model	$87.9k	$20.1k	$67.9k	77.3%	$0	Better margin, but payroll lifts the target.
Full-service team, in-house delivery	$105.9k	$19.6k	$86.3k	81.5%	$0	Strongest cushion, highest monthly revenue need.

What breaks the break-even plan for an internal communications agency?

Stress test

The plan is most exposed to slow client closes, higher contractor costs, and fixed overhead creep. A 10% fixed-cost rise plus 33% variable expense pressure pushes break-even to about $59,900 a month.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$50,700/month	$0 gap	Base case leaves little cushion.
Revenue shortfall	Revenue runs 15% below break-even.	$50,700/month	$7,600 gap	About $43,100 in monthly revenue leaves a roughly $5,500 operating gap.
Fixed-cost pressure	Fixed costs rise 10% to about $40,123 a month.	$55,700/month	$5,000 gap	Office, software, and payroll creep push the break-even line up.
Margin pressure	Variable expenses rise from 28% to 33%.	$54,400/month	$3,700 gap	Contractor rate increases and low billable use cut contribution margin to 67%.
Combined pressure	Fixed costs rise 10% and variable expenses stay at 33%.	$59,900/month	$9,200 gap	Hiring before signed work makes the plan fragile.

What should the founder verify before committing to payroll, office space, and software for an internal communications agency?

Founder checklist

Before you add office space, software, or more contractors, confirm you can hold at least $50.7K in monthly retained revenue and cover $36.5K in monthly fixed costs with the Year 1 team. If that cushion is not visible by Month 9, the scale-up is early.

1Demand Proof$50.7K/mo

Verify retained monthly revenue can stay above break-even before you commit to a larger payroll or contractor bench.

2Fixed Load$36.5K/mo

Confirm rent, software, insurance, professional services, utilities, supplies, hosting, and Year 1 payroll stay covered without stretching cash.

3Unit Margin72% pre-fixed

Price work at $250, $200, $300, and $225 per hour, then check that the blended mix still leaves room after specialist fees, software, marketing, and incidentals.

4Service Mix3.0 FTE

Make sure the Year 1 team can handle the 60% strategy, 30% content, 10% training, and 20% project consulting mix before the Month 13 hires.

5Cash Cushion$719K

Hold enough cash to survive the Month 16 low point, because the model needs a deep reserve before the business can breathe on its own.

6Launch GateMonth 9

Lock proposal, onboarding, content review, and approval steps before scaling spend, and do not stretch long office or software commitments without break-even confidence.