Split-Level Renovation Break-Even: $62K Monthly Revenue

Fixed costs $7.3K Overhead base

Contribution margin 71% After variable costs

Break-even revenue $10.3K Monthly target

Break-even timing Month 4 Ramp crossover

Break-even calculator

Test monthly revenue, project costs, and fixed overhead against break-even for a split-level home renovation shop.

Lean Base Full

Monthly revenue Revenue is the pool that covers direct project costs and fixed overhead. $ Lower sales Higher sales Variable expenses These are direct project costs that rise as job volume and scope grow. $ Lower costs Higher costs

Money available to cover fixed costs $362,018 $486,583 revenue - $124,565 variable expenses

Margin ratio

74%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead contribution margin must cover. $ Lean team Bigger team

Break-even chart Revenue Total costs

Which split-level renovation expenses are fixed, and which move with sales?

Cost classification

Break-even gets unreliable when monthly overhead, job-level percentages, and staffing capacity are blended. Keep fixed spend separate from revenue-linked spend so each added project shows its real contribution.

Expense	Cost	Break-Even Treatment	Common Mistake
Design Studio and Shop Rent	Fixed	Include $4,500 per month in baseline overhead before any job volume.	Tying rent to project count when the lease is owed either way.
General Liability Insurance	Fixed	Include $1,200 per month as recurring overhead in the break-even base.	Moving it into job margin instead of treating it as monthly coverage.
Software Subscriptions	Fixed	Include $650 per month as operating overhead for design, estimating, and project control tools.	Ignoring small monthly tools that add up against gross profit.
Subcontractor Labor Pass-Through	Variable	Apply at 12% of first-year revenue because it rises with project sales.	Booking it as fixed labor and overstating margin on added jobs.
Direct Project Material Markup Costs	Variable	Apply at 8% of first-year revenue as a job-level charge tied to project scope.	Using average monthly spend instead of linking materials to revenue.
Municipal Permitting and Inspection Fees	Variable	Apply at 5% of first-year revenue because permits and inspections follow active projects.	Leaving fees out of break-even and finding the gap after jobs start.
Vehicle Maintenance and Fuel	Semi-variable	Start with the $1,800 monthly plan, then review as job travel and site visits rise.	Treating truck spend as fully fixed when fuel and wear climb with volume.
Payroll Capacity	Semi-fixed	Model first-year wages at about $31,458 per month before the project manager hire.	Treating field payroll as fully variable when salaries must be paid during idle weeks.

How does break-even change from a lean launch to a full pipeline?

Scenario table

Break-even gets easier when revenue rises faster than fixed payroll, but the cushion only holds if backlog stays full. The lean case covers overhead with a smaller team, while the base and full cases need more work to justify added staff.

Planning cases only: these figures use model assumptions and are not guaranteed results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean split-level launch	$1.13M	$327k	$443k	71%	$356k	Covers overhead, but cash depends on keeping jobs moving.
Base Year 2 pipeline	$3.43M	$937k	$537k	72.7%	$1.96M	Stronger cushion, but added payroll means backlog must stay full.
Full Year 3 pipeline	$4.87M	$1.25M	$612k	74.4%	$3.01M	Best margin here, with break-even risk low if work is booked ahead.

What breaks the break-even plan if bookings slow or costs creep up?

Stress test

The base plan reaches break-even, but the cushion is thin. A 20% revenue miss, a 10% jump in fixed overhead, or a 5-point margin squeeze all push it back into loss; combined, the model shows about a $158k monthly gap.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$624k	$0 cushion	The base case reaches break-even in Month 4.
Revenue shortfall	Revenue runs 20% below the $624k break-even point.	$624k	$125k gap	A 20% booking miss leaves about an $89k operating gap.
Fixed cost pressure	Monthly overhead rises 10% to about $487k.	$686k	$62k gap	Rent, payroll, or admin creep pushes break-even higher.
Margin pressure	Contribution margin drops 5 points, from 71% to 66%.	$671k	$47k gap	Permit delays, idle carpentry time, or change orders squeeze profit.
Combined pressure	Revenue falls 20%, overhead rises 10%, and margin drops 5 points.	$738k	$239k gap	That turns the model into about a $158k monthly loss.

Should the founder lock in rent, hiring, and equipment before the signed pipeline can carry Month 4 break-even?

Founder checklist

Don’t commit to the studio, crew, or truck spend until the signed and near-signed pipeline can support the Month 4 break-even plan. In Year 1, $45K of marketing at a $1,500 CAC only buys 30 customers a year, so referrals and backlog have to close the gap.

1Signed Pipeline$632K/mo

Confirm near-signed work can scale toward about $632K a month, or the Month 4 break-even plan is too thin to trust.

2Launch Demand30/yr

A $45K Year 1 budget at a $1,500 CAC buys only 30 customers a year, so referrals and repeat work must do most of the launch lifting.

3Project Margin71% CM

Year 1 direct project costs take 29% of revenue, so contribution margin (CM) is 71% before payroll and rent; any pricing slip pushes break-even out.

4Crew Ramp4.5 FTE

Year 1 staffing is 4.5 full-time equivalent (FTE), so the subcontractor bench has to be ready before you sell level transition or structural work.

5Fixed Burn$40.6K/mo

The fixed stack runs about $40.6K a month before marketing and job costs, and the first capex wave is $158K, so test lease and equipment together.

6Cash Cushion$740K

Minimum cash hits $740K in Month 2, so keep working capital separate from profit and don’t fund expansion from early receipts.