Soft Story Seismic Retrofit Break-Even Analysis: $100K/Month

Fixed costs $70.6K/mo Payroll plus overhead

Contribution margin 67.5% After variable costs

Break-even revenue $104.5K/mo Monthly target

Break-even timing Month 2 Model ramp point

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a soft story seismic retrofit contractor.

Lean Base Full

Monthly revenue Revenue sets the margin pool that covers overhead. $ Low volume High volume Variable expenses Direct costs rise as project volume and complexity rise. $ Lower costs Higher costs

Money available to cover fixed costs $151,050 $223,750 revenue - $72,700 variable expenses

Margin ratio

68%

Covers fixed costs

Yes

Fixed monthly costs Monthly overhead stays on even when projects slow. $ Lean overhead Higher overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with retrofit project volume?

Cost classification

Break-even is reliable only when overhead stays separate from project-driven spend. If field labor is hired before jobs arrive, it acts fixed, even when the bid prices it into each project.

Expense	Cost	Break-Even Treatment	Common Mistake
Office and Fabrication Shop Rent	Fixed	Carry $12,500 per month as overhead before contribution margin.	Allocating rent only to active jobs and understating slow-month break-even.
General Liability and Professional Insurance	Fixed	Carry $4,200 per month as recurring operating overhead.	Treating insurance as a percentage of revenue when the policy is monthly.
Steel Moment Frames	Variable	Subtract $4,500 per Small Apartment Retrofit before gross margin.	Classing job materials as overhead and overstating project contribution.
Permit Processing Fees	Variable	Model as 1.5% of Small Apartment Retrofit revenue.	Using a flat permit budget even as project count changes.
Referral Commissions	Variable	Apply 3.0% of first-year revenue, then use the forecast rate by year.	Booking commissions as fixed marketing and missing deal-level margin drag.
Direct Marketing Lead Gen	Variable	Apply 5.0% of first-year revenue, then use the forecast rate by year.	Assuming lead spend stays flat while sales volume grows.
Vehicle Maintenance for Crews	Semi-variable	Start with the $2,200 monthly base, then add usage pressure as site trips rise.	Keeping it flat when more crews, miles, and jobsite visits increase wear.
Foreman Capacity	Semi-fixed	Treat the $85,000 salary as fixed once hired, with capacity stepping from 1.0 to 5.0 FTE over the forecast.	Pricing foreman time per job while ignoring that payroll stays after hiring.

How does break-even shift from a lean launch to a full crewed run-rate for a soft-story retrofit contractor?

Scenario table

Break-even is tight at half speed because fixed crews and overhead already run about $71K a month. At the Year 1 average, the cushion opens, and the Year 2 run-rate adds more room even after staffing steps up.

Planning figures only; actual break-even moves with project mix, permit timing, and site delays.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch pace	$112K	$36K	$71K	67.6%	$5K	Just clears break-even, so delays can erase the cushion.
Base Year 1 run-rate	$224K	$73K	$71K	67.5%	$81K	Clears break-even with a solid monthly cushion.
Full Year 2 run-rate	$346K	$109K	$87K	68.4%	$149K	Strong cushion after added staff and higher volume.

What breaks the break-even plan for a soft story retrofit contractor?

Stress test

The base plan clears break-even, but the buffer gets hit fast if one large retrofit slips, fixed shop and crew costs rise, or field margins compress. Losing a single $145K commercial retrofit is the clearest month-to-month risk.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.045M	$119K cushion	Base case clears break-even.
Revenue shortfall	Revenue falls 25%.	$1.045M	$427K cushion	A slipped project still cuts the buffer hard.
Fixed-cost increase	Fixed costs rise 10% to about $776K.	$1.115M	$49K cushion	Overhead leaves little room for error.
Margin pressure	Contribution margin compresses by 5 points.	$1.13M	$34K cushion	Small labor or fee overruns matter more.
Combined pressure	Revenue falls 25%, fixed costs rise 10%, and margin compresses by 5 points.	$1.65M	$27K cushion	One $145K commercial retrofit can tip the month below break-even.

Can you sign the lease and hire the core team before the retrofit pipeline proves the math?

Founder checklist

Only commit once the signed pipeline can carry about $70.6K a month of base load and the job-cost stack. The model shows Month 2 break-even, but that only works if the work is real, not just in the funnel.

1Demand Mix$2.685M Y1

Check that the mix is real: 12 small retrofits, 8 commercial retrofits, 40 structural assessments, 20 design packages, and 10 HOA audits in Year 1.

2Base Burn$70.6K/mo

Add $24.3K of monthly overhead to $46.25K of Year 1 payroll and make sure signed work can cover it before you take space.

3Job Margin75.1% CM

Here’s the quick math: Year 1 direct job costs are about $453.4K, and referral plus direct marketing adds another 8.0% of revenue.

4Core Staff5.0 FTE

Verify the opening team can cover sales, engineering, field work, and admin at 5.0 FTE, then expand to 6.0 FTE in Year 2.

5Cash Floor$1.056M

Hold cash for the Month 2 trough of $1.056M and stage the $512K capex plan against receipts, not hope.

6Lead Close40 reports, 20 designs

Spend on marketing only if leads turn into paid structural reports or engineering packages, not just calls.