Security Company Break-Even Point: About $130K Monthly Revenue

Fixed costs $22.5K/mo Monthly overhead

Contribution margin 83% After variable costs

Break-even revenue $27.1K/mo Revenue needed

Break-even timing Month 4 Model break-even

Break-even calculator

This calculator tests monthly revenue, variable expenses, and fixed costs against the break-even point for a security company.

Lean Base Full

Monthly revenue More revenue gives you more room to cover overhead. $ Low sales High sales Variable expenses These are direct costs that move with service volume. $ Low direct costs High direct costs

Money available to cover fixed costs $219,900 $265,000 revenue - $45,100 variable expenses

Margin ratio

83%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead contribution margin must cover. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which security company expenses are fixed, and which move with sales?

Cost classification

Break-even gets more reliable when overhead, committed guard payroll, and contract-linked costs are split cleanly. The big miss is treating all payroll as variable when guards are often hired before billable hours are proven.

Expense	Cost	Break-Even Treatment	Common Mistake
Office & Security Operations Center Rent, $12,000/month	Fixed	Include in monthly overhead from Month 1 through Month 60.	Spreading rent across contracts and hiding the true overhead floor.
General Liability & Business Insurance, $4,000/month	Fixed	Include as stable monthly overhead in the break-even model.	Treating required coverage as optional until revenue grows.
Patrol Vehicle Leases & Fixed Maintenance, $3,000/month	Semi-fixed	Hold flat until contract count forces another fleet block.	Modeling each new patrol contract as if it needs a new vehicle immediately.
Security Guards / Patrol Officers, $25,000/month in the first year	Semi-variable	Keep base staffing committed, then let overtime follow billable hours.	Treating all guard payroll as variable before utilization is proven.
Security Operations Center Operators, $9,167/month	Semi-fixed	Add staffing in steps as monitoring coverage and service hours expand.	Assuming operator payroll rises smoothly with every new customer.
Direct Security Equipment Maintenance & Consumables, 4% of revenue	Variable	Apply directly against revenue because usage rises with client work.	Parking consumables in fixed overhead and overstating margin at scale.
Client-Specific Monitoring Software Licenses, 3% of revenue	Variable	Tie license expense to active client contracts and monitoring revenue.	Using one flat software line and missing contract-level margin pressure.
Sales Commissions, 5% of revenue	Variable	Deduct commissions as sales are booked and revenue is earned.	Counting commissions as fixed sales payroll instead of revenue-linked spend.

How does break-even change across lean, base, and full security service mixes?

Scenario table

Break-even sits around $130,000 in monthly revenue. Below that, fixed payroll and overhead still run near $108,000 a month, and variable costs keep taking about 17% of sales.

Planning assumptions only; actual results will move with staffing, collections, and contract mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean guard-heavy mix	$120,000	$20,400	$108,000	83%	($8,400)	Still below break-even, so payroll and overhead leave a gap.
Base contract mix	$130,000	$22,100	$108,000	83%	($100)	Near break-even; small gains in utilization or price can flip profit.
Full-service mix	$150,000	$25,500	$108,000	83%	$16,500	Above break-even, with room for growth before adding more guards or vehicles.

What breaks this security company’s break-even plan?

Stress test

Here’s the quick math: the base plan sits near $130,000 a month at an 83% margin. One lost contract, overtime, or a $1,000 overhead bump pushes break-even up fast, so contract retention and labor control matter more than raw sales.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$130,000	$0 gap	Base plan reaches break-even by Month 4.
Revenue shortfall	Lose one $8,000 Personal Protection contract.	$138,000	$8,000 gap	A single lost account pushes the monthly target up fast.
Fixed-cost pressure	Add $1,000 to monthly overhead.	$131,205	$1,205 gap	Insurance, rent, or admin creep hits break-even right away.
Margin pressure	Raise variable expenses by 1 point, from 17% to 18% of revenue.	$132,000	$2,000 gap	Overtime, fuel, or claims can eat the 83% margin fast.
Combined pressure	Lose one $4,500 On-Site Guarding contract and add $1,000 overhead.	$135,700	$5,700 gap	One miss plus overhead drift can wipe out the cushion.

What should you verify before you lock the lease, hire the first guards, and fund launch?

Founder checklist

Before you commit to rent, vehicles, guards, or marketing, make sure the model can support $130,000 in monthly revenue and still absorb the $695,000 cash need. Month 4 break-even looks good on paper, but Month 6 is the cash low, so timing matters.

1Demand Proof$130K/mo

At $1,200 CAC and $150,000 of Year 1 marketing, confirm new accounts can still push monthly revenue to $130,000 by Month 4, with licenses, permits, and insurance already in place.

2Lease Load$95.5K/mo

Do not lock the $12,000 office and SOC rent or the $3,000 vehicle load until signed work can carry the full fixed base.

3Price Mix83% CM

Keep the listed prices at $4,500 for guarding, $1,800 for patrols, $950 for monitoring, and $8,000 for personal protection, because Year 1 direct and variable costs leave about 83% to cover overhead.

4Frontline Crew5 + 2 FTE

Hire the first 5 guards and 2 SOC operators only when scheduled billable hours can cover about $34,167 a month in frontline payroll.

5Cash Cushion$695K

Keep at least $695,000 in cash ready, because operating break-even hits in Month 4 but cash bottoms in Month 6.

6Startup Capex$445K

Keep the $445,000 setup and equipment spend separate from operating break-even so asset buys do not get mistaken for monthly self-funding.