IT Support Break-Even Point: $30K Monthly Revenue Target

Fixed costs $7.5K/mo Base overhead

Contribution margin 75% After variable costs

Break-even revenue $10.0K/mo Revenue target

Break-even timing Month 6 Forecast turn

Break-even calculator

Test whether monthly revenue covers variable expenses and fixed monthly costs, then see how close the business is to break-even.

Lean Base Full

Monthly revenue Revenue sets the margin available to cover fixed costs. $ Low sales High sales Variable expenses Direct costs like software, travel, and subcontractors rise with work volume. $ Lean costs Heavy costs

Money available to cover fixed costs $122,156 $158,659 revenue - $36,503 variable expenses

Margin ratio

77%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead break-even must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which IT service expenses are fixed, variable, or tied to capacity?

Cost classification

Break-even only works when fixed overhead and revenue-linked costs are split cleanly. In this model, Month 6 break-even depends on keeping salary commitments out of variable spend and treating revenue percentages as true volume load.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent ($3,500/month)	Fixed	Add to monthly fixed overhead before calculating required gross profit.	Spreading rent across tickets and making break-even look too low.
Insurance, Utilities and Internet, Professional Services, Telecommunications ($2,700/month)	Fixed	Model as stable monthly overhead within the current planning range.	Ignoring smaller fixed bills because none looks large alone.
CEO / Lead Technician Salary ($95,000/year)	Semi-fixed	Include as committed capacity; it does not move with each ticket.	Treating owner-led labor as variable just because work is billable.
Senior IT Technician Salary ($65,000/year)	Semi-fixed	Keep fixed until workload requires another hire, then step it up.	Assuming salary scales smoothly with revenue instead of hiring steps.
Software Licensing and Tools (8% of revenue)	Variable	Apply as a revenue percentage in contribution margin math.	Putting tool usage in fixed overhead and overstating margin.
Hardware Procurement Costs (5% of revenue)	Variable	Deduct directly from revenue tied to hardware-related sales.	Using service margins on resale work that carries procurement load.
Vehicle and Travel Expenses (8% of revenue)	Variable	Link to field work volume, jobs, and customer visits.	Forgetting travel rises when on-site tickets rise.
Marketing Budget and CAC ($24,000/year; $150 CAC)	Semi-variable	Model the base budget, then connect customer growth to CAC.	Treating all marketing as fixed after launch, even when CAC drives growth.

How does break-even change from a lean IT support setup to a full team?

Scenario table

As staffing rises, fixed costs climb, but the variable-cost share improves a bit. That pushes break-even revenue up from lean to full, so ticket density, managed retainer mix, and technician utilization matter most.

Planning assumptions only; actual results will move with ticket mix, utilization, and sales timing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 setup	$25.3k	$6.3k	$19.0k	75%	$0	Very tight; small misses in volume hurt fast.
Base Year 2 setup	$32.0k	$7.7k	$24.3k	76%	$0	Middle ground, but it still needs steady retainer work.
Full Year 3 setup	$49.2k	$11.3k	$37.9k	77%	$0	Higher cushion only if technician time stays full.

What breaks the break-even plan for IT support?

Stress test

Base case breaks even at about $304k of revenue with 25% variable expenses and $228k of fixed overhead. A 10% revenue miss or a move to 30% variable costs quickly puts profit below zero, so onboarding speed and field-work mix matter most.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change in revenue, variable cost, or fixed overhead.	$304k	$0 gap	The plan sits at break-even.
Revenue shortfall	Revenue falls 10% to about $274k.	$304k	$23k gap	Slow onboarding leaves fixed costs uncovered.
Fixed-cost increase	Fixed overhead rises 10% to about $251k.	$335k	$31k gap	Added staffing or admin pushes the hurdle higher.
Variable-expense pressure	Variable expenses rise from 25% to 30%.	$326k	$22k gap	More on-site work or subcontractor use cuts margin.
Combined pressure	Revenue falls 10%, variable expenses rise to 30%, and fixed overhead rises 10%.	$358k	$59k gap	Weak demand and cost creep can break cash fast.

Is the IT support business ready to lock in rent, hires, and recurring support promises?

Founder checklist

Don’t sign the lease or hire up until the pricing, capacity, and cash stack works on paper. The model breaks even in Month 6, but it still needs about $772K of minimum cash in Month 2, so the runway test is the real gate.

1Service Price$2.1K / $5.6K

Check that managed services can support 25 Year 1 billable hours at $85 an hour and break-fix 45 hours at $125 an hour before you promise fast response times or longer contracts.

2Gross Margin75% CM

With 13% of revenue going to software and hardware COGS and 12% to travel and subcontractors, you keep about 75% before payroll and rent.

3Fixed Load$7.5K/mo

The non-payroll fixed stack is $7,500 a month, including $800 for insurance, so avoid an office lease unless the $304K monthly revenue path is credible.

4Capacity Ramp3.5 hrs

Verify each active customer stays near the Year 1 average of 3.5 billable hours a month and that remote support plus on-site dispatch are documented before you add clients.

5Cash Cushion$772K

Keep enough cash for the Month 2 trough and stage the $158.2K startup capex, because the business does not reach break-even until Month 6.

6CAC Target$150 CAC

Track acquisition cost against the $150 Year 1 target; with a $24K marketing budget, that only buys about 160 customers, so a rising CAC will slow launch demand.