Production Company Break-Even Analysis: About $38K/Month

Fixed costs $24.6K/mo Base overhead

Contribution margin 70% After variable spend

Break-even revenue $35.1K/mo Revenue floor

Break-even timing Month 8 Launch ramp

Break-even calculator

Test monthly revenue, variable expenses, and fixed monthly costs against break-even for a production company.

Lean Base Full

Monthly revenue Revenue is the cash coming in each month before direct costs and overhead. $ Low sales High sales Variable expenses These are direct project costs that rise as you take on more work. $ Low costs High costs

Money available to cover fixed costs $23,100 $33,000 revenue - $9,900 variable expenses

Margin ratio

70%

Covers fixed costs

$1,500 short

Fixed monthly costs These are the monthly costs you pay even when volume slows. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which production company expenses are fixed, variable, semi-variable, or semi-fixed for break-even?

Cost classification

Break-even only works if fixed overhead stays separate from spend that rises with each shoot. Use recurring salaries and rent as the monthly hurdle, and keep one-time gear purchases in cash runway, not core operating break-even.

Expense	Cost	Break-Even Treatment	Common Mistake
Office rent	Fixed	Include $3,500 per month as recurring overhead from Month 1 through Month 60.	Charging rent to projects and making job margins look too low.
Base payroll	Fixed	Include the first-year salaried team as monthly overhead: $120,000 founder salary plus $95,000 lead producer salary.	Treating salaried leadership like project labor that disappears when shoots slow.
Freelance talent and crew fees	Variable	Model as 15.0% of revenue in the first year, declining by year as assumed.	Locking crew spend into fixed overhead instead of tying it to booked work.
Equipment rental and location costs	Variable	Model as 8.0% of revenue in the first year because usage follows project volume.	Using one flat monthly number even when shoot count changes.
Project-specific software licenses	Variable	Model as 3.0% of revenue in the first year for tools tied to client work.	Mixing project licenses with core software subscriptions.
Marketing and industry event participation	Variable	Model as 4.0% of revenue in the first year when tied to sales activity and deal flow.	Confusing this with the separate annual marketing budget.
Travel and entertainment	Semi-variable	Start with the $500 monthly base, then add project travel when shoots move locations.	Ignoring travel spikes on out-of-town shoots.
Added salaried roles	Semi-fixed	Add salary steps when roles start, including Month 13, Month 19, and Month 25 hires.	Smoothing future hires from Month 1 and overstating early break-even burden.

How does break-even change across lean, base, and full production setups?

Scenario table

More payroll and overhead push the break-even line up. The lean case is closest to the line, the base case adds marketing support for active commercial work, and the full case needs the most monthly revenue.

Planning assumptions only; real crew mix, project timing, and client demand can move break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch with freelancer-heavy crew	$351k	$105k	$246k	70%	$0	Closest to break-even, so small delays matter.
Base active commercial production mix	$381k	$114k	$267k	70%	$0	Marketing is funded, but the break-even line still sits high.
Full staffed film, TV, and post-production mix	$682k	$174k	$508k	74.5%	$0	Highest revenue target, but it supports the widest operating setup.

What breaks a production company's break-even plan?

Stress test

The base plan is tight, so small slips in revenue or margin can wipe out the cushion fast. Delayed deposits, overtime, reshoots, and location overruns are the fastest ways to push break-even out.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$381k	$0 cushion	No cushion if delivery slips.
Revenue shortfall	Revenue falls 10% to about $343k.	$381k	$38k gap	A small sales miss pushes break-even out.
Fixed-cost pressure	Fixed costs rise 10% to about $293k.	$419k	$38k gap	Overhead creep needs more billings.
Margin pressure	Variable expenses rise 5 points to 35%.	$411k	$30k gap	Crew, rental, and software overruns lift break-even.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and variable expenses rise to 35%.	$451k	$70k gap	Slow deals plus cost creep create a wide hole.

Can your signed pipeline carry the first office, crew, and gear commitments?

Founder checklist

Do not lock in office space, salaried hires, or major gear until signed work and pricing can support the fixed load and the early cash dip. In this model, the stress test is whether demand can cover the path to break-even without burning through reserves too fast.

1Pipeline floor$381k/mo

Verify booked work can reach this monthly run rate before you commit to more fixed staff and overhead.

2Fixed load$24.6k/mo

Add Year 1 salaries and office overhead first so you know the burn the business must cover every month.

3Contribution margin70% CM

Check that project pricing still leaves enough after crew, equipment, location, software, and marketing spend.

4Staffing rampMonth 13

Delay the post-production supervisor and office administrator until utilization justifies the extra payroll.

5Cash cushion$806k

Hold enough cash to survive the Month 8 low point, since that is the hardest stretch before EBITDA turns up.

6Launch CAC$2.5k CAC

Track acquisition cost against the Year 1 target and keep rentals in play when they lower fixed risk; buy gear only when the $97k setup wave is clearly earned back.