Software Patch Management Service Break-Even Analysis: $82K Monthly Revenue

Fixed costs $16.2K Base overhead

Contribution margin 92% After variable costs

Break-even revenue $17.6K Monthly target

Break-even timing Month 16 Model break point

Break-even calculator

Use this calculator to test monthly revenue against variable expenses and fixed monthly costs for a software patch management service.

Lean Base Full

Monthly revenue Money in each month before direct costs and overhead. $ Low sales High sales Variable expenses Direct costs that rise with each dollar of revenue. $ Low direct High direct

Money available to cover fixed costs $309,302 $332,583 revenue - $23,281 variable expenses

Margin ratio

93%

Covers fixed costs

Yes

Fixed monthly costs Monthly overhead the contribution margin has to cover. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in a software patch management service?

Cost classification

Break-even is reliable only when fixed overhead, revenue-linked costs, and hiring steps are separated. Here, Month 16 break-even depends on covering committed monthly spend before counting EBITDA upside.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent and Utilities	Fixed	Include $6,500 per month in base overhead.	Tying rent to endpoint count.
Cybersecurity Insurance Premiums	Fixed	Include $1,800 per month before launch revenue.	Treating insurance as optional after contracts start.
RMM and Security Software Licensing	Fixed	Include $4,200 per month as committed platform spend.	Assuming tools scale only after revenue arrives.
Legal and Compliance Audits	Fixed	Include $2,500 per month in monthly overhead.	Pushing compliance outside break-even math.
Cloud Infrastructure and Hosting	Variable	Deduct 4.5% of revenue in Year 1, falling to 3.5% in Year 5.	Counting revenue before hosting load.
Sales Commissions and Referral Fees	Variable	Deduct 3.5% of revenue in Year 1, falling to 2.5% in Year 5.	Ignoring commissions on referred revenue.
Senior Security Engineer labor	Semi-fixed	Add $125,000 per FTE as hiring steps rise from 1.0 to 6.0 FTEs.	Smoothing headcount as a perfect revenue percentage.
Annual Marketing Budget	Semi-variable	Test $120,000 in Year 1 to $750,000 in Year 5 against CAC from $2,500 to $1,600.	Raising spend without checking acquisition efficiency.

How does break-even change from the lean launch case to the full managed service case?

Scenario table

The lean case still runs below break-even because fixed overhead is heavy relative to revenue. As the mix shifts to higher-priced tiers and more volume, the same cost base is easier to cover and profit turns positive.

Planning-case figures are model assumptions, not a promise of future results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean founder-led launch	$59.9k	$12.6k	$75.8k	79.1%	-$28.4k	Below break-even, with a monthly loss.
Base recurring service	$175.0k	$27.4k	$110.4k	84.4%	$37.3k	Above break-even, with room to absorb overhead.
Full scaled managed service	$834.4k	$101.2k	$249.1k	87.9%	$484.1k	Well above break-even, with a wide profit cushion.

What breaks the break-even plan if sales slip or costs jump?

Stress test

Year 2 still clears overhead with about a $55,400 monthly cushion at $175,000 revenue. The plan gets tight if contracts slip, onboarding drags, or staffing and tool costs rise together.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$119,600	$55,400 cushion	Healthy cushion, but overhead stays heavy.
Revenue shortfall	Year 2 revenue falls 10% to $157,500.	$119,600	$37,900 cushion	Slipped contracts cut the cushion fast.
Fixed-cost increase	Fixed costs rise 15% to about $127,000 per month.	$137,600	$37,400 cushion	More payroll or overhead eats the margin.
Variable-expense pressure	Variable expense rate rises 5 points to 12.7%.	$126,500	$48,500 cushion	Tool or labor creep pushes break-even up.
Combined pressure	Revenue falls 20%, variable expense rises 5 points, and fixed costs rise 15%.	$145,500	$5,500 gap	Three hits together leave almost no room.

What should the founder verify before committing to full launch spend in a patch management service?

Founder checklist

Before you buy the full launch, prove you can fill about $82.4K a month in recurring contracts, cover the $75.8K fixed burden, and still hold $369K of cash through Month 16. Year 1 EBITDA is a $341K loss, so don’t commit the full $192K launch capex until runway is clear.

1Recurring MRR$82.4K/mo

Secure enough recurring contracts to clear the break-even target before heavy hiring, because this service only scales cleanly when monthly retainer revenue is in hand.

2Tier Fit$450 / $1.1K / $2.2K

Confirm the Year 1 monthly prices match the promised service levels, and keep the $1,500 onboarding fee separate from recurring revenue.

3Unit Margin92% CM

Check that 4.5% cloud hosting and 3.5% sales commissions still leave enough contribution margin before payroll and overhead.

4Fixed Burn$75.8K/mo

Make sure the listed rent, insurance, licensing, audits, admin, and salaries can be paid until revenue catches up.

5Support Ramp1→8 FTE

Test patch-window coverage and escalation paths before adding strict-service clients, since support staffing rises fast from 1 FTE to 8 FTE.

6Cash Reserve$369K / Month 16

Hold the cash cushion through Month 16 and keep $2,500 Year 1 CAC low enough against contract value before you scale acquisition.