Legislative Analysis Service Break-Even: About $123K Monthly

Fixed costs $34.9K/mo Monthly base

Contribution margin 87% After variable costs

Break-even revenue $40.1K/mo Revenue needed

Break-even timing Month 26 Forecast crossover

Break-even calculator

Test whether monthly revenue can cover variable expenses and the fixed monthly cost base.

Lean Base Full

Monthly revenue Revenue is the cash in each month before direct costs. $ Low sales High sales Variable expenses These are direct costs that rise with revenue, like data and payment fees. $ Low costs High costs

Money available to cover fixed costs $255,800 $287,417 revenue - $31,617 variable expenses

Margin ratio

89%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the margin has to cover. $ Lean overhead High overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in a legislative analysis business?

Cost classification

Break-even is only useful if fixed overhead stays separate from usage-based fees and scaling payroll. In the first year, variable delivery load is 13% of revenue: 8% data provider and API fees plus 5% payment processing and commissions.

Expense	Cost	Break-Even Treatment	Common Mistake
Chief Executive Officer salary	Fixed	Use $185,000 per year as recurring overhead unless the plan changes leadership pay.	Tying executive pay to each client sale instead of treating it as baseline overhead.
Research staffing payroll	Semi-variable	Model Lead Data Scientist and Senior Policy Analyst payroll by headcount steps as research demand grows.	Treating analyst payroll like per-project delivery spend when it really scales in hiring blocks.
Cloud Infrastructure Base	Fixed	Carry $4,500 per month in fixed platform overhead from Month 1 through Month 60.	Letting the base cloud bill rise with revenue when the model lists it as a flat monthly charge.
Office Lease	Fixed	Carry $6,500 per month as fixed overhead across the planning range.	Moving rent with client count instead of treating it as a committed monthly expense.
Software Subscriptions	Semi-fixed	Start with $1,800 per month, then review step-ups when seats, tools, or operating scale expand.	Assuming subscriptions are fully variable just because users may grow over time.
Data Provider and API Fees	Variable	Apply 8% of first-year revenue; with $738,000 revenue, that is about $59,000 for the year.	Putting data feeds in fixed overhead and overstating contribution margin.
Payment Processing and Commissions	Variable	Apply 5% of first-year revenue; with $738,000 revenue, that is about $36,900 for the year.	Forgetting transaction fees when pricing monthly subscriptions and enterprise accounts.
Marketing budget	Semi-variable	Use the $250,000 first-year budget as acquisition-linked spend, then test it against the $2,800 CAC assumption.	Treating all marketing as fixed even when spend is tied to customer acquisition volume.

How does break-even shift across lean, base, and full operating models for this legislative analysis service?

Scenario table

Break-even moves mostly with fixed payroll, overhead, and marketing. Higher pricing and a better client mix lift the contribution margin, so the full model can absorb a bigger cost base, while the lean model needs much less revenue to stay safe.

These are planning assumptions built from the model inputs, so they show direction and risk, not a guaranteed result.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean validation model	$61.5k	$8.0k	$106.6k	87%	-$53.1k	Needs about $122.5k monthly revenue; Year 1 is well below break-even.
Base funded scale model	$287.4k	$31.6k	$77.8k	89%	$178.0k	Month 26 marks the crossover, so this is the funded scale case.
Full multi-analyst practice	$750.0k	$67.5k	$132.0k	91%	$550.5k	Strong cushion at scale, but only if the larger team and demand both land.

What breaks the break-even plan if revenue slips or costs rise?

Stress test

The plan breaks fast if renewals slip or fixed spend jumps. Year 1 variable costs already take 13% of revenue, so a softer top line or higher marketing budget pushes break-even up and cash down.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.225M	$0 gap	At plan, there is little room for delay.
Revenue shortfall	Year 1 revenue runs at $615K monthly.	$1.225M	$610K gap	Delayed renewals push you below break-even.
Fixed-cost pressure	Marketing budget rises from $250K to $450K annually.	$1.417M	$192K gap	Higher fixed spend needs faster sales.
Margin pressure	Data provider, API, and processing costs start at 13% of revenue.	$1.225M	$0 gap	That 13% drag leaves little room for fee creep.
Combined pressure	Revenue stays at $615K monthly, marketing rises to $450K annually, and CAC stays above $2,800.	$1.417M	$802K gap	Multiple drags can widen the cash gap fast.

What should you verify before you lock in payroll, office space, and marketing spend?

Founder checklist

Before you commit to payroll, office space, and marketing, prove signed or near-signed clients can support about $122.5K in monthly revenue. Month 26 break-even is the target, but the model still hits a Month 25 cash trough of -$1.451M.

1Demand Proof$122.5K/mo

Confirm signed or near-signed clients can reach about $122.5K in monthly revenue, since that is the rough break-even level after Year 1 fixed load and variable costs.

2Price Mix$450 / $2.2K / $8.5K

Validate willingness to pay for the Year 1 tracker, forecast, and API prices before you commit to full sales spend.

3SOW GateBefore hire

Require a signed statement of work before adding analyst payroll, or labor costs will outrun the pipeline.

4Onboarding SpeedPilot first

Test onboarding flow and turnaround with a small live set first, then scale sales only if delivery stays fast and repeatable.

5Office LoadLease later

Delay the $6.5K monthly lease and $40K fitout if remote delivery works, because office spend raises the break-even bar without adding demand.

6Runway Cash-$1.451M

Keep enough cash for the Month 25 trough and watch Year 1 CAC at $2,800, because Month 26 break-even is a target, not a promise.