Tradesman Break-Even Analysis: $405K Monthly Revenue Needed

Fixed costs $5.2K/mo Recurring overhead

Contribution margin 72.5% After variable costs

Break-even revenue $7.2K/mo Monthly revenue target

Break-even timing Month 30 Model payback point

Break-even calculator

Test how monthly revenue, variable expenses, and fixed costs work together to reach break-even.

Lean Base Full

Monthly revenue Revenue is the pool that covers direct costs and overhead. $ Low sales High sales Variable expenses Use costs that rise with each job, like materials, fuel, supplies, and overflow labor. $ Low direct High direct

Money available to cover fixed costs $52,480 $69,973 revenue - $17,493 variable expenses

Margin ratio

75%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead base break-even must cover. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in a skilled trade break-even analysis?

Cost classification

Break-even gets unreliable when monthly overhead and job-driven spending are blended. Here, rent and insurance set the base load, while materials, overflow labor, fuel, and supplies rise with completed work.

Expense	Cost	Break-Even Treatment	Common Mistake
Office & Warehouse Rent	Fixed	Use $2,500 per month in recurring overhead from Month 1 through Month 60.	Treating rent as job-driven and understating the monthly sales floor.
Software Subscriptions	Fixed	Use $350 per month as base operating overhead for CRM and scheduling tools.	Dropping software from break-even because it feels small.
Utilities	Semi-variable	Start with the $450 monthly office and warehouse charge, then watch usage as crews and shop activity grow.	Modeling all utility spend as fixed when heavier operations can lift usage.
Business & Liability Insurance	Fixed	Include $300 per month in overhead before calculating required gross profit.	Counting insurance only when jobs are booked.
Material Costs	Variable	Apply the revenue-linked rate, starting at 18.0% in the first year and falling to 15.0% by the mature year.	Using labor-only margin and missing parts, fixtures, and job materials.
Subcontractor Labor (Overflow)	Variable	Apply the revenue-linked overflow rate, starting at 3.0% in the first year and declining to 2.0% by the mature year.	Putting overflow labor into fixed payroll and hiding weak contribution margin.
Vehicle Fuel & Maintenance	Variable	Apply the job-linked rate, starting at 4.0% of revenue and easing to 3.0% as routing improves.	Treating vans as free to operate once purchased.
Salaried Field Staff	Semi-fixed	Add crews in hiring steps as capacity expands, using the lead plumber, electrician, and carpenter FTE plan.	Scaling payroll smoothly with revenue instead of adding it in crew-sized jumps.

How does break-even change from a lean solo launch to a full-capacity tradesman crew?

Scenario table

Here’s the quick math: lean keeps payroll light, base adds a fuller crew, and full capacity adds more marketing plus staffing. That pushes break-even from about $18.7k a month to about $87.3k, while margin improves from 72.5% to 78.5%.

Planning cases only; real break-even will move with job mix, pricing, and staffing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean solo launch	$18.7k	$5.1k	$13.6k	72.5%	$0	Lowest fixed load, so the shop needs the least monthly revenue.
Base staffed launch	$40.5k	$11.1k	$29.4k	72.5%	$0	This is the core launch case, and it needs steady monthly job flow.
Full-capacity crew build	$87.3k	$18.8k	$68.5k	78.5%	$0	Higher staffing lifts the revenue bar, but the margin is stronger.

What breaks the break-even plan for a trades business?

Stress test

Base case is $294k fixed monthly costs, a 72.5% contribution margin, meaning revenue left after direct job costs, and about $405k break-even revenue. That leaves no cushion, so a small revenue miss or a 1-point margin slip can push it underwater.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change in revenue, margin, or fixed costs.	$405,500	$0 gap	There is no cushion if bookings slow.
Revenue shortfall	Monthly revenue lands $10,000 below plan.	$405,500	$10,000 gap	A small booking miss turns into a loss fast.
Fixed-cost increase	Fixed overhead rises by $1,000 per month.	$406,900	$1,400 gap	Overhead creep pushes break-even up before sales move.
Margin pressure	Contribution margin falls 1 point to 71.5%.	$411,200	$5,700 gap	Rework, underpriced materials, or long drive time can do this.
Combined pressure	Revenue is $10,000 lower, fixed costs rise $1,000, and margin falls 1 point.	$412,600	$17,100 gap	Hiring before booked demand becomes risky fast.

Is this trades business ready for the lease, vans, and crew costs before Month 30 break-even?

Founder checklist

Not yet unless the active license is in hand, the $5.23K monthly nonpayroll load is covered, and booked work can carry the added payroll. The model needs $344K of minimum cash and does not reach break-even until Month 30, so every new fixed cost must earn its keep.

1Service mix65% / 55%

Verify early booked work tilts to plumbing repair and electrical install, because Year 1 assumes 65.0% plumbing and 55.0% electrical activity.

2Overhead load$5.23K/mo

Verify the monthly nonpayroll load stays at $5,230, including rent, software, utilities, insurance, licensing, admin, and vehicle insurance.

3Day-one margin72.5%

Verify each quoted job clears the Year 1 contribution margin of 72.5%, using 18.0% materials, 3.0% overflow labor, 4.0% fuel, and 2.5% supplies.

4Crew ramp4.0 FTE

Verify the first operating year can keep 4.0 FTE busy, plus 2 service vans, before you add more payroll.

5Cash reserve$344K

Verify you can keep at least the $344K cash floor through Month 30, since Year 1 EBITDA is -$227K and Year 2 is -$125K.

6Launch spend$15K / $150 CAC

Verify first-year marketing can stay near the $15K budget and $150 CAC while filling the schedule, or the break-even date slips.