Remodeling Service Break-Even Analysis: About $42K/Month

Fixed costs $8.7K/mo Base overhead

Contribution margin 78% After variable costs

Break-even revenue $11.2K/mo Monthly target

Break-even timing Month 3 Model break-even

Break-even calculator

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

Lean Base Full

Monthly revenue Revenue sets the pool that covers direct costs and overhead. $ Lower sales Higher sales Variable expenses These are project costs that rise as sales rise. $ Lower costs Higher costs

Money available to cover fixed costs $110,000 $140,000 revenue - $30,000 variable expenses

Margin ratio

79%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the margin has to cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which remodeling expenses stay fixed, and which move with sales volume?

Cost classification

Break-even is only useful if fixed overhead and job-linked expenses are split cleanly. Treating salaried staff or vehicle spend as fully variable can make Month 3 break-even look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Office/Showroom Rent	Fixed	Include $4,500 per month in base overhead before profit.	Spreading rent across jobs and missing slow-month pressure.
Business Insurance	Fixed	Include $1,200 per month regardless of project count.	Assuming insurance falls when fewer jobs close.
Project Specific Permits & Fees	Variable	Model at 5.0% of revenue in the first year.	Using one flat permit amount for every project type.
Specialized Tool Rental & Consumables	Variable	Model at 3.0% of revenue in the first year.	Classifying job-specific rentals as general overhead.
Digital Advertising & Lead Generation	Variable	Model at 10.0% of revenue in the first year, then test against CAC.	Ignoring the $1,500 first-year customer acquisition cost.
Project Management Software Licenses	Variable	Model at 4.0% of revenue in the first year if tied to project volume.	Treating all software as fixed when usage scales with jobs.
Vehicle Maintenance & Fuel	Semi-variable	Start with the $1,000 monthly base, then watch job distance.	Using one fleet amount even when service areas expand.
Sales & Marketing Coordinator Payroll	Semi-fixed	Add payroll in a step when the role starts at 0.5 FTE.	Treating salaried labor as variable instead of monthly break-even pressure.

How does break-even shift across a lean owner-led remodel, a base team, and a fuller crew buildout?

Scenario table

Break-even moves with payroll first, then job mix. The lean setup keeps overhead lighter, the base setup sits near the threshold, and the fuller crew only helps if it keeps enough large projects moving.

Planning assumptions only; actual jobs, labor, and close rates can move these results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean owner-led remodel	$168,000	$36,960	$331,000	78%	-$199,960	Well below break-even; it needs more large jobs or less overhead.
Base remodel with sales support	$453,846	$99,846	$354,000	78%	$0	At break-even; one delay or rework hit can push it negative.
Full crew buildout	$854,000	$169,092	$554,000	80.2%	$130,908	Above break-even, but only if the crew stays loaded.

What breaks the break-even plan for a remodeling service?

Stress test

The base plan breaks even at about $424k of revenue with 22% variable expenses and $331k of fixed costs. The main risks are slower sales, overhead creep, and margin pressure from permits, rework, and subcontractor price hikes.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change in fixed costs or margin.	$424k	$0 gap	This is the floor; any miss before scale turns into loss.
Revenue shortfall	Revenue slips to $350k while costs hold.	$424k	$74k gap	At $350k revenue, operating loss is about $58k.
Fixed-cost pressure	Fixed costs rise to $354k after sales support.	$453k	$103k gap	Higher overhead needs more sales just to stand still.
Margin pressure	Direct costs rise from 22% to 27%; margin falls to 73%.	$453k	$103k gap	Permits, rework, and subcontractor pricing eat the cushion.
Combined pressure	Fixed costs reach $354k and margin falls to 73%.	$485k	$135k gap	At $350k revenue, operating loss is about $98k.

What should a remodeling founder verify before locking in showroom rent, payroll, and vehicles?

Founder checklist

Don't lock in showroom space, payroll, or a second vehicle until lead flow, signed work, and cash can carry the fixed load. For this remodeling model, break-even only holds when CAC stays near $1,500 and backlog covers the monthly run rate.

1Lead Flow$30k / $1.5k CAC

Verify Year 1 lead flow can support the $30k marketing budget and a CAC near $1,500 before you scale ads, because weak acquisition burns cash faster than it builds backlog.

2Fixed Burn$8.7k/mo

Confirm the $8.7k monthly fixed burn from rent, insurance, utilities, vehicles, website, accounting, and supplies before adding more payroll, because this cost hits every month.

3Direct Load22%

Keep the direct project load near 22% by pricing permits, tool rental, ads, and software into each job, or your margin will look healthy on paper and slip in cash.

4Crew RampMonth 7-13

Tie staffing to scheduled backlog before you add the Sales and Marketing Coordinator in Month 7 or the Junior Carpenter in Month 13, because crew gaps or excess labor both hurt break-even.

5Cash Buffer$790k

Protect the Month 2 cash low point with about $790k on hand, since the model can fail on timing even when projects are sold.

6Backlog Mix$424k-$453k/mo

Verify signed work clears the $424k-$453k monthly break-even band and still reflects the Year 1 mix, where kitchen, bathroom, whole-house, and room-addition jobs drive the load on crews and cash.