Technology Consulting Break-Even: About $71K Monthly Revenue

Fixed costs $50.5K/mo Monthly base cost

Contribution margin 77% After variable costs

Break-even revenue $65.6K/mo Revenue to cover

Break-even timing Month 6 Model hits breakeven

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed monthly costs against break-even for a consulting business.

Lean Base Full

Monthly revenue Revenue sets the cash available to cover direct costs and overhead. $ Lower sales Higher sales Variable expenses These are direct costs that move with project work and sales volume. $ Lower spend Higher spend

Money available to cover fixed costs $64,680 $84,000 revenue - $19,320 variable expenses

Margin ratio

77%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that contribution margin has to cover. $ Lean setup Full team

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in a technology consulting firm?

Cost classification

Break-even only works if each expense sits in the right bucket. Here’s the quick math logic: revenue-linked costs reduce contribution margin, while fixed payroll and rent set the monthly hurdle to cover.

Expense	Cost	Break-Even Treatment	Common Mistake
Lead Consultant / CEO salary	Fixed	Include the $180,000 annual salary in recurring payroll coverage.	Excluding owner pay and overstating break-even progress.
Senior Technology Consultant salary	Fixed	Include the $140,000 annual salary per full-time equivalent in payroll.	Treating salaried delivery labor like project-only spend.
Sales & Business Development Manager salary	Fixed	Include the $100,000 annual salary separate from revenue-based commissions.	Blending base salary with the 8.0% commission line.
Third-Party Diagnostic Software Licenses	Variable	Model at 6.0% of first-year revenue, falling to 4.0% by mature year.	Booking it as a flat software subscription.
Subcontractor Fees (Project-Specific)	Variable	Model at 4.0% of first-year revenue because it follows project volume.	Hiding subcontractors inside fixed payroll.
Sales Commissions & Performance Bonuses	Variable	Model at 8.0% of first-year revenue before contribution margin.	Counting bookings without the commission drag.
Project-Specific Travel & Client Expenses	Variable	Model at 5.0% of first-year revenue tied to client delivery work.	Ignoring travel until cash gets tight.
Office Rent	Fixed	Include $8,000 per month as fixed overhead from Month 1 through Month 60.	Letting rent disappear from service-line break-even math.

How does break-even change as this consulting business moves from a lean launch to a full-scale practice?

Scenario table

As the team adds delivery, marketing, and project management, fixed cost rises faster than margin gains. Utilization, rates, and collections still set the real gap, so keep the case editable.

Planning assumptions only; actual results will move with utilization, rates, and collections.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$71k	$16.3k	$54.7k	77%	$0	Lowest burn, but there is little cushion if sales slow.
Base growth	$1.266M	$240k	$1.026M	81%	$0	This is the middle case; break-even is still tight, so watch staffing and collections.
Full-scale practice	$1.638M	$246k	$1.393M	85%	$0	Higher margin helps, but the larger team needs strong utilization to stay even.

What breaks the break-even plan for this technology consulting business?

Stress test

At about $54.7k of fixed monthly cost and a 77% contribution margin, the profit left after variable costs, break-even sits near $71k a month. A small revenue miss, $5k of extra overhead, or a 5-point margin drop can push the plan back below break-even.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$71,000	$0 gap	On plan, but there is no buffer.
Revenue shortfall	Monthly revenue lands $10,000 below plan.	$71,000	$10,000 gap	The month slips straight below break-even.
Fixed-cost increase	Monthly overhead rises by $5,000.	$77,500	$6,500 gap	Added seats or hires need more billable work.
Margin pressure	Contribution margin falls from 77% to 72%.	$76,000	$5,000 gap	Discounting or contractor creep raises the bar.
Combined pressure	Monthly overhead rises by $5,000 and contribution margin falls to 72%.	$82,900	$11,900 gap	Lower utilization plus higher contractor rates can erase Month 6 breakeven.

Can this technology consulting pipeline clear break-even before you lock in rent and new hires?

Founder checklist

Use break-even as the go/no-go test. If signed or near-signed work cannot support about $71k a month, a 77% contribution margin, and the $758k cash trough in Month 6, hold off on the lease, new hires, and extra delivery capacity.

1Pipeline$71k/mo

Verify signed or near-signed monthly revenue can reach about $71k, and keep CAC near the Year 1 level of $2.5k so demand is real before you spend on scale.

2Rate Band$180-$280/hr

Confirm billable rates stay in the $180 to $280 per hour band and most engagements run 10 to 60 hours, because thin scopes at low rates make revenue look full while profit stays thin.

3Base Load$50.5k/mo

Include the $180k founder salary in the launch load, because the base monthly cost is about $50.5k before optional hires and that is the hurdle new revenue must cover.

4Contribution77% CM

Stress test the model at 23% variable expense, which leaves about 77% contribution margin after software, subcontractors, commissions, and travel.

5Staffing RampMonth 13

Keep the project manager and marketing specialist off the payroll until backlog is steady, and avoid office expansion before utilization is stable.

6Cash Runway$758k

Keep enough cash for the Month 6 low point, because the model's minimum cash need is $758k and hiring ahead of that can break the plan.