Private Security Company Break-Even: $508K Monthly Sales

Fixed costs $38.4K Monthly overhead base

Contribution margin 75.5% After variable costs

Break-even revenue $50.8K Monthly revenue target

Break-even timing Month 8 Launch ramp point

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even.

Lean Base Full

Monthly revenue Revenue is the pool that covers variable costs and fixed overhead. $ Low sales High sales Variable expenses These are direct costs that move with revenue, like guard pay and commissions. $ Lean costs Heavy costs

Money available to cover fixed costs $45,000 $60,000 revenue - $15,000 variable expenses

Margin ratio

75%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly overhead costs the business pays even before new sales. $ Small base Large base

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales for a private security company?

Cost classification

Break-even is only useful if monthly overhead stays separate from per-contract delivery costs. For this model, keep fixed office expenses and semi-fixed payroll apart from guard labor, fleet usage, commissions, ads, and onboarding.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Include $3,500 per month in base overhead from Month 1 through Month 60.	Spreading rent across contracts and hiding the true monthly nut.
General Business Insurance	Fixed	Include $1,000 per month before calculating contribution margin.	Treating required coverage as optional until revenue scales.
Accounting & Legal Fees	Fixed	Include $1,200 per month as recurring administrative overhead.	Booking legal and accounting only when invoices arrive.
Core Management and Admin Payroll	Semi-fixed	Model CEO, operations, sales, and admin payroll at $31,250 per month in Year 1, then step up as FTEs rise.	Treating salaried staff as variable with each new contract.
Security Personnel Direct Costs	Variable	Apply 12.0% of revenue in the first year, declining to 10.0% by Year 5.	Treating guards as fixed overhead, which can underprice jobs.
Fleet Operating Costs	Variable	Apply 3.0% of revenue in the first year, declining to 2.5% by Year 5.	Budgeting fuel and patrol usage like rent.
Client-Specific Tech Maintenance	Variable	Apply 1.5% of revenue in the first year, declining to 1.0% by Year 5.	Forgetting that client tech support rises with active sites.
Client Onboarding & Training Materials	Variable	Apply 1.0% of revenue in the first year, declining to 0.5% by Year 5.	Treating onboarding as fixed even as new contracts rise.

How does break-even change from a lean launch to a fuller ramp for this private security company?

Scenario table

Break-even gets easier as active customers and billable hours rise, because revenue scales faster than fixed payroll. The catch is simple: these figures only work if the acquired customers stay active and buy the expected service mix.

Planning cases only; actual results will move with client mix, staffing, and how fast new accounts activate.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$52.7k	$12.9k	$38.4k	75.5%	$1.5k	Right at break-even, with only a thin cushion.
Year 1 base case	$119.9k	$29.4k	$38.4k	75.5%	$52.2k	Comfortably above break-even if 50 customers stay active.
Year 2 fuller ramp	$223.8k	$51.5k	$49.6k	77.0%	$122.7k	Wide cushion, but only if the service mix holds.

What pushes this private security company past break-even?

Stress test

The break-even line moves fast if a site contract drops, overtime runs hot, or fuel and workers' comp rise. On the current plan, a 10% revenue slip, 10% higher overhead, or a 5-point margin hit pushes break-even from about $508k to $544k-$599k.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$508k	$0 gap	Base case works, but the cushion is thin.
Revenue shortfall	Revenue slips 10% to about $457k.	$457k	$51k gap	One lost site contract can wipe out the cushion.
Fixed-cost pressure	Fixed overhead rises 10% to about $422k.	$559k	$51k gap	Wage, overtime, and admin creep add the same drag.
Margin pressure	Contribution margin falls from 75.5% to 70.5%.	$544k	$36k gap	Higher fuel or workers' comp can push the line up fast.
Combined pressure	Revenue slips 10%, fixed overhead rises 10%, and margin falls to 70.5%.	$599k	$91k gap	Lost work plus cost creep can push break-even near $600k.

What should you verify before you commit to patrol vehicles, hiring, and marketing in a private security company?

Founder checklist

Don’t lock in the big spend until licenses are active, $1,000 monthly insurance is bound, and the Month 8 cash trough is covered. The break-even test is simple: can 22 active customer equivalents carry the $31,250 monthly salaried base and still leave room to grow?

1Demand proof22 accts / 1,760 hrs

Verify you can secure at least 22 active customer equivalents, or 1,760 billable hours at 80 hours each, before adding more fixed overhead.

2Payroll load$31.25K/mo

Confirm the CEO, operations manager, sales manager, and administrative assistant are covered at $31,250 a month before you hire field staff.

3Margin test75.5% CM

Check that contracts clear Year 1 direct and variable costs of 24.5% of revenue, so contribution margin can fund rent, insurance, and growth.

4Fleet trigger$60K later

Delay the $60,000 patrol vehicle until route density is high enough to use it, or cash gets tied up before the service base is full.

5Cash cushion$665K

Keep at least $665,000 of cash ready by Month 8, since that is the modeled low point and breakeven lands in Month 8.

6Launch gate$1.5K CAC

Before the first sales push, confirm licenses are active and insurance is bound at $1,000 per month, then test whether the $1,500 Year 1 CAC fits the $75,000 marketing budget.