Subtitling Agency Break-Even: Month 9 Revenue Coverage Plan

Fixed costs $38.6K/mo Core monthly overhead

Contribution margin 70.5% After variable spend

Break-even revenue $54.8K/mo Revenue to cover overhead

Break-even timing Month 9 Launch-month break point

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for a subtitling and translation agency.

Lean Base Full

Monthly revenue Revenue is the pool that covers direct cost and overhead. $ Low sales High sales Variable expenses Direct costs like freelance linguists, cloud tools, commissions, and payment fees rise with each project. $ Low direct cost High direct cost

Money available to cover fixed costs $89,321 $124,750 revenue - $35,429 variable expenses

Margin ratio

72%

Covers fixed costs

Yes

Fixed monthly costs This is the overhead and payroll the margin must cover each month. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which subtitling agency expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful if fixed monthly overhead stays separate from revenue-linked delivery spend. In the first year, delivery variables total 29.5% of revenue, so treating linguist work as payroll would overstate the sales needed to reach Month 9 break-even.

Expense	Cost	Break-Even Treatment	Common Mistake
Office lease	Fixed	Hold at $4,500/month from Month 1 through Month 60.	Rolling office fit-out into rent; fit-out is capital spend.
Subtitling software subscriptions	Fixed	Use the $1,200/month base subscription as fixed overhead.	Mixing base subscriptions with usage overages in one line.
Freelance linguist payments	Variable	Model at 18.0% of first-year revenue, about $113,040 on $628,000 revenue.	Treating subcontracted language work as fixed payroll.
Cloud infrastructure and artificial intelligence API costs	Variable	Model at 5.0% of first-year revenue, about $31,400 on $628,000 revenue.	Leaving processing costs out of gross margin.
Sales commissions	Variable	Model at 4.0% of revenue across all forecast years.	Counting commissions as fixed sales headcount.
Transaction and payment processing	Variable	Model at 2.5% of first-year revenue, falling to 2.0% by the mature year.	Using a flat dollar fee instead of a sales-linked rate.
Senior Project Manager staffing	Semi-fixed	Add capacity in $85,000-per-year full-time employee steps as workload grows.	Scaling management payroll job by job instead of in hiring steps.
Revision labor and quality control overages	Semi-variable	Add only when rework, rush volume, or review hours exceed planned capacity.	Hiding rework inside margin with no volume trigger.

How does break-even change from a lean founder-led model to a staffed base case and a full-service setup?

Scenario table

Lean keeps overhead lighter, but the cushion is thin. The base case is the clean pivot point: margin improves as the team scales, but break-even still depends on steady monthly volume.

Planning assumptions only; actual break-even will move with mix, staffing, and sales pace.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean founder-led localization	$52.3k	$15.4k	$42.4k	70.5%	-$5.5k	Needs about $60.1k monthly revenue, so the cushion is tight.
Base staffed project management	$201.1k	$54.9k	$76.6k	72.7%	$69.6k	Break-even is about $105.3k a month, with room if volume stays steady.
Full-service multi-language volume	$488.5k	$122.1k	$107.4k	75.0%	$259.0k	Break-even rises to about $143.2k monthly, but scale gives more cushion.

What breaks this break-even plan for the localization agency?

Stress test

Base break-even is about $601k a month on $424k of fixed overhead and a 70.5% contribution margin. A 15% revenue miss leaves a $64k gap, and a 5-point cost swing lifts break-even to $647k to $672k.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$601k	$0 cushion	Any slip in billed hours or collections moves it under water.
Revenue shortfall	Revenue lands 15% below the target.	$601k	$64k gap	A modest miss leaves a meaningful monthly hole.
Fixed-cost increase	Fixed overhead rises by $5k a month.	$672k	$71k gap	More overhead needs more top-line fast.
Margin pressure	Freelance and revision costs add 5 points to variable spend.	$647k	$46k gap	Higher linguist rates or rework burn through margin.
Combined pressure	Revenue is 15% lower while fixed and variable costs both rise.	$655k	$144k gap	Demand softness plus cost creep creates the widest hole.

What should the founder verify before locking in payroll, office space, and software?

Founder checklist

Prove the booked pipeline can carry the Year 1 load before you commit to more payroll, a lease, or a bigger build. The model needs about $38.6K of fixed burn a month, $677K of minimum cash by Month 8, and a clear path to Month 9 break-even.

1Booked pipeline$628K

Verify signed work and late-stage quotes can support Year 1 revenue, because EBITDA is still -$121K and break-even lands only in Month 9.

2Fixed burn$38.6K/mo

Verify the team, lease, software, insurance, utilities, and admin stay near this monthly burn before you add more fixed commitments.

3Margin check70.5% CM

Verify variable costs stay near 29.5% of revenue in Year 1, with freelance linguists at 18.0%, cloud and AI at 5.0%, sales commissions at 4.0%, and processing at 2.5%.

4Active load12.5 hrs

Verify enough active customers can absorb 12.5 billable hours each per month in Year 1, and keep rate discipline at $150, $90, and $75 per hour unless scope changes.

5Cash runway$677K

Verify cash stays above the model's minimum by Month 8, since the company reaches its lowest cash point before the break-even month.

6Capex gateMonth 9

Verify you can delay nonessential capex, office fit-out, and platform customization until the break-even path is visible, because launch capex totals $135.5K.