IT Budgeting Break-Even Analysis: About $44K/Month

Fixed costs $28.9K/mo Base overhead

Contribution margin 78% After variable spend

Break-even revenue $37.0K/mo Monthly target

Break-even timing Month 29 Model breakeven

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against the break-even point for an IT budgeting and cost optimization service.

Lean Base Full

Monthly revenue Top-line billings set the margin left to cover overhead. $ Lower revenue Higher revenue Variable expenses Direct delivery costs and sales spend rise with more work. $ Lower costs Higher costs

Money available to cover fixed costs $44,460 $57,000 revenue - $12,540 variable expenses

Margin ratio

78%

Covers fixed costs

Yes

Fixed monthly costs Office, payroll, and software costs must be covered each month. $ Lower fixed Higher fixed

Break-even chart Revenue Total costs

Which expenses stay fixed and which move with sales in this IT budgeting service?

Cost classification

Break-even gets cleaner when monthly overhead, revenue-linked spend, and hiring steps are kept apart. The $67k launch capex belongs in cash planning, not EBITDA break-even.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Carry $3,500/month as monthly overhead from Month 1 through Month 60.	Tying rent to client volume when it doesn’t move with sales.
Accounting & Legal Fees	Fixed	Carry $1,000/month as recurring overhead in the break-even model.	Dropping it below the line because it feels administrative.
CEO payroll	Fixed	Use $12,500/month based on the $150,000 annual salary and 1.0 FTE.	Treating founder payroll as optional after revenue starts.
Lead IT Consultant payroll	Fixed	Use $10,000/month in the first operating year based on $120,000 annual salary.	Modeling delivery leadership as per-project labor in Year 1.
Sales Manager payroll	Semi-fixed	Model as a hiring step because Year 1 uses 0.5 FTE, then increases later.	Smoothing payroll as a constant percentage of revenue.
Specialized Software Licenses	Variable	Apply 5% of revenue in Year 1, falling to 3% by Year 5.	Hard-coding it as a flat subscription when usage scales with revenue.
Sales Commissions	Variable	Apply 8% of revenue in Year 1, declining to 7% by Year 5.	Leaving commissions out of contribution margin.
Annual Marketing Budget	Semi-fixed	Use $20,000 in Year 1 as a planned spend step, not a per-client fee.	Confusing budgeted campaigns with customer acquisition cost.

How does break-even shift from a lean launch plan to a base operating plan and a full-scale plan?

Scenario table

CM means contribution margin, the share left after variable costs. Lean stays below break-even, base crosses it near Month 29, and full builds a much wider cushion as revenue scales faster than payroll.

Planning assumptions only; actual break-even will move with sales mix, staffing pace, and close rates.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch plan	$12.8k	$2.8k	$32.6k	78%	-$22.6k	Still below break-even; revenue needs more density.
Base operating plan	$86.8k	$16.5k	$58.4k	81%	$11.9k	Break-even clears near Month 29 with a small cushion.
Full-scale plan	$207.9k	$34.3k	$78.0k	83.5%	$95.6k	Wide cushion; profit can absorb slower months.

What breaks the break-even plan for this IT budgeting service?

Stress test

The base plan sits at about $439k of revenue against $343k of fixed overhead and a 78% contribution margin. Slower signups, a 10% rise in fixed costs, or margin slip from discounting and higher contractor or travel spend can push the plan out of break-even fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; revenue stays at about $439k with 22% variable expenses and $343k fixed overhead.	$439k	$0 gap	At the line, with no cushion.
Revenue shortfall	Revenue falls 10% to about $395k.	$439k	$44k gap	A small signup miss creates a mid-five-figure hole.
Fixed-cost pressure	Fixed overhead rises 10% to about $377k.	$483k	$44k gap	Extra headcount or overhead pushes break-even past plan revenue.
Margin pressure	Contribution margin drops from 78% to 73%.	$469k	$30k gap	Discounting, software inflation, or travel-heavy delivery weakens the cushion.
Combined pressure	Fixed overhead rises 10% and contribution margin falls to 73%.	$516k	$77k gap	Delayed retainers plus cost pressure can break the plan quickly.

Can this IT budgeting service clear break-even before you commit to rent and full-time hires?

Founder checklist

If you cannot qualify about $44K a month in billable work, the model is not ready for office rent or more headcount. Hold the commitment until pricing, capacity, and cash still work at Month 29 and the $295K cash low point.

1Pipeline Proof$44K/mo

Book or strongly qualify enough billable work to reach about $44K a month before you sign the lease, because that is the top-line load this model needs to cover break-even.

2Year 1 Rates$180-$220/hr

Confirm clients accept $200, $220, $180, and $190 per hour by service line in Year 1, or the margin drops before the fixed base has a chance to clear.

3Fixed Load$6.35K/mo

Your non-payroll fixed costs already run $6.35K a month, so keep the $3.5K rent off the table unless it improves sales or delivery; after 22% direct costs, you still need 78% contribution margin to cover the base.

4Billable Capacity50 hrs

Make sure the team can cover 20, 15, 5, and 10 billable hours across the four service lines without adding headcount too early, because utilization drives the payback curve.

5Launch Test$20K / $2K CAC

Use the first-year $20K marketing budget to prove customer acquisition cost near $2K before you scale spend to $45K in Year 2.

6Cash CushionMonth 29

Hold enough cash to survive the Month 29 low point, keep the $67K startup capex separate from monthly break-even, and do not add recurring cost until the runway is protected.