Steel Jacketing Service Break-Even: About $142K Monthly Revenue

Fixed costs $96.1K/mo Base monthly burn

Contribution margin 71% After variable costs

Break-even revenue $136.3K/mo Monthly target

Break-even timing Month 21 First profit month

Break-even calculator

Test monthly revenue, direct costs, and fixed overhead against break-even for a steel jacketing service.

Lean Base Full

Monthly revenue Revenue sets the cushion left to cover fixed overhead. $ Low rev High rev Variable expenses These are direct project costs that rise with work volume. $ Low cost High cost

Money available to cover fixed costs $192,610 $259,583 revenue - $66,973 variable expenses

Margin ratio

74%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead contribution margin must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

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

Cost classification

Break-even is only useful if steel plate, freight, and bonding move with project revenue, while rent and core systems stay fixed. Misclassifying variable job costs as overhead makes Month 21 break-even look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Industrial Yard and Office Lease	Fixed	Model at $12,500 per month from Month 1 through Month 60.	Allocating rent per job and understating the monthly break-even floor.
Engineering Design Software Subscriptions	Fixed	Model at $1,800 per month before any project volume assumptions.	Linking software spend to revenue when it is a base operating charge.
Raw Steel and Fabrication Materials	Variable	Apply 14.0% of first-year revenue, declining to 12.0% by the fifth year.	Treating steel plate as fixed overhead instead of a job-linked input.
Third Party Specialized Welding Supplies	Variable	Apply 6.0% of first-year revenue, declining to 4.0% by the fifth year.	Hiding welding consumables in general overhead and overstating margin.
Project Logistics and Heavy Freight	Variable	Apply 5.0% of first-year revenue, declining to 3.0% by the fifth year.	Budgeting freight as flat when larger or remote projects lift spend.
Performance Bonding and Project Insurance	Variable	Apply 4.5% of first-year revenue, declining to 3.0% by the fifth year.	Treating bonding as fixed overhead instead of revenue-tied project coverage.
Utilities and Communications	Semi-variable	Start with the $1,200 monthly base, then pressure-test increases as site activity rises.	Keeping utilities flat while crews, equipment use, and field coordination grow.
Lead Certified Welder wages	Semi-fixed	Step labor capacity from 2.0 FTE in the first year to 8.0 FTE by the fifth year.	Spreading wages evenly per hour and missing crew-count jumps.

How does break-even change from lean ramp to base case to full scale?

Scenario table

Year 1 is a ramp test with heavy overhead, so losses are still wide. By Year 2 the model is close to break-even, and Year 3 finally shows a small operating profit.

Planning figures only; actual results will move with project mix, staffing, and timing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 ramp	$77.8K	$23.0K	$111.0K	70.5%	-$56.2K	Backlog is there, but overhead still outruns margin.
Base Year 2 operating case	$169.8K	$46.7K	$131.1K	72.5%	-$8.0K	Very close to break-even; small misses still push it red.
Full Year 3 scale case	$259.6K	$67.0K	$179.4K	74.2%	$13.3K	Positive profit gives a small cushion for crew expansion.

What breaks the break-even plan for steel jacketing?

Stress test

Here’s the quick math: Year 1 revenue is $934K against about $1.70M of break-even revenue, or roughly $142K a month, so the plan still needs about $770K more top line. If bids slow, steel and freight jump, or fixed overhead grows before backlog is signed, cash can slip fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change in Year 1 mix, prices, or fixed load.	$1.70M	$770K gap	Break-even lands in Month 21.
Revenue shortfall	Year 1 revenue runs 20% below plan.	$1.70M	$957K gap	Slow bid conversion widens the cash gap.
Fixed-cost increase	Annual fixed overhead rises 10% before backlog is signed.	$1.87M	$936K gap	Idle crews and extra overhead push break-even out.
Margin pressure	Direct costs rise to 35.0% of revenue from steel, freight, bonding, overtime, and rework.	$1.84M	$909K gap	Margin squeeze eats the cushion fast.
Combined pressure	Year 1 revenue is 20% below plan, fixed overhead rises 10%, and direct costs rise to 35.0%.	$2.03M	$1.28M gap	This is the path to the -$543K cash low in Month 29.

What should you verify before signing the yard lease and buying the rigs?

Founder checklist

Before you sign the yard lease or buy the rigs, prove you have enough signed or near-signed work to cover $23.8K a month of fixed overhead and a Year 1 payroll of about $72.3K a month. Break-even lands in Month 21, so heavy spend needs pipeline proof first.

1Signed backlogNear-signed

Verify enough signed or near-signed projects to cover the opening months, because fixed overhead starts at $23.8K a month before delivery is steady.

2Overhead load$23.8K/mo

Check that the lease, software, insurance, storage, utilities, and admin spend fit the base plan, since that cost runs from Month 1.

3Job margin70.5% CM

Price each job so raw steel, welding supplies, freight, and bonding leave room, because Year 1 direct costs take 29.5% of revenue.

4Crew capacity8.5 FTE

Confirm certified welders, field techs, engineering review, and ops support can hold the Year 1 workload, which assumes 8.5 FTE.

5Cash gap-$543K

Plan working capital for the $543K minimum cash gap in Month 29, or the build can outrun collections before EBITDA turns positive.

6Scale gateMonth 21

Hold off on a larger shop or second crew until Month 21 break-even is real, because the model still needs time to pay back the upfront build.