Utility Billing Break-Even Analysis: $102K Monthly Revenue

Fixed costs $72.3K/mo Base payroll plus overhead

Contribution margin 83% After variable costs

Break-even revenue $87.2K/mo Revenue to cover base

Break-even timing Month 29 Model turns positive

Break-even calculator

Use this to test whether monthly revenue covers variable costs and the fixed cost base.

Lean Base Full

Monthly revenue Monthly billing and service revenue sets the pool that covers variable and fixed costs. $ Low revenue High revenue Variable expenses Include direct cloud, software, onboarding, and payment costs that rise with revenue. $ Low cost High cost

Money available to cover fixed costs $119,000 $140,000 revenue - $21,000 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead and payroll base break-even must absorb. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which utility billing and customer management expenses are fixed, variable, semi-variable, or semi-fixed?

Cost classification

Break-even gets shaky when payroll, hosting, and support costs are grouped wrong. Here’s the quick math logic: fixed costs set the revenue floor, while variable and semi-variable costs reduce contribution margin.

Expense	Cost	Break-Even Treatment	Common Mistake
CEO salary	Fixed	Include the $180,000 annual salary as a recurring monthly overhead item for the planning range.	Treating executive pay as optional below break-even, which understates the Month 29 cash need.
Office rent	Fixed	Include $10,000 per month in fixed overhead from Month 1 through Month 60.	Spreading rent by client count and making break-even look easier at low volume.
Cloud Hosting & Data Storage	Variable	Subtract as a revenue-linked charge: 6.0% in the first year, falling to 4.5% by the fifth year.	Treating platform spend as purely fixed when usage rises with billing volume.
Third-Party Software Licensing	Variable	Model as a percentage of revenue: 4.0% in the first year, declining to 3.0% by the fifth year.	Locking licensing into fixed overhead and overstating contribution margin at scale.
Client Onboarding & Implementation	Variable	Deduct from contribution margin at 5.0% of revenue in the first year, easing to 3.5% by the fifth year.	Ignoring onboarding drag even though new client wins create setup work before revenue stabilizes.
Payment Processing Fees	Variable	Treat as a direct revenue-linked fee: 2.0% in the first year and 1.7% by the fifth year.	Netting fees against sales without showing the margin hit in break-even math.
Customer Support Specialist	Semi-fixed	Add capacity in steps: starts Month 13 at $55,000 per FTE, then grows from 1.0 FTE to 5.0 FTE by the fifth year.	Treating support labor as purely variable instead of step hiring tied to service volume.
Support ticket handling and overtime	Semi-variable	Keep base staffing in fixed or semi-fixed payroll, but add overtime when support volume exceeds planned capacity.	Assuming every support hour scales neatly with revenue, which hides service strain and churn risk.

How does break-even change across lean, base, and full operating cases for this business?

Scenario table

Lean misses fixed costs, base is near break-even, and full case builds a cushion. First-year fixed costs are $84,833, then rise to $107,333 in Year 2 and $135,250 in Year 3.

Planning assumptions only; actual results will move with client mix, staffing, and cost control.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean operating case	$76,600	$13,022	$84,833	83%	($21,255)	Still below break-even, so cash stays under pressure.
Base operating case	$105,325	$17,905	$84,833	83%	$2,587	Near break-even, so small swings can flip profit or loss.
Full operating case	$143,625	$24,416	$84,833	83%	$34,376	Comfortable cushion, but fixed costs still need control.

What breaks the break-even plan if revenue slips or costs spike?

Stress test

The plan has little cushion: a 10% revenue drop or a 10% fixed-cost jump moves it off break-even fast. If software fees or overtime push variable expense from 17% to 22%, break-even revenue rises from about $102,208 to about $108,800.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$102,208	$0 gap	No cushion if close rates slip.
Revenue shortfall	Monthly revenue falls 10%.	$102,208	$8,483 gap	Slow onboarding can erase the month.
Fixed-cost pressure	Fixed costs rise 10%.	$112,400	$10,192 gap	Higher labor or rent cuts the cushion.
Margin pressure	Variable expense rises from 17% to 22%.	$108,800	$6,592 gap	Software price increases or overtime lift break-even.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and variable expense rises to 22%.	$119,600	$21,600 gap	That mix can push the month deep red.

Can you prove the 11-client path before you lock in the service commitment?

Founder checklist

At 11 clients with $9,575 in average monthly revenue, the model clears about $105.3K a month, which can cover the $84,833 monthly load if Year 1 direct costs stay near 17%. The catch is cash: the model still bottoms out at negative $396K in Month 29.

1Client path11 clients

Confirm signed contracts can reach 11 accounts at the target average monthly revenue before you commit to the full operating stack.

2Launch demand10 clients

Pressure-test the Year 1 $150,000 marketing budget against the $15,000 CAC so the spend can actually buy the client count you need.

3Fixed load$84.8K/mo

Make sure contracted revenue can cover the monthly overhead load before you add more rent, software, or salaried headcount.

4Margin mix83% CM

Keep cloud, licensing, onboarding, and payment costs near 17% total so contribution margin stays high enough to fund overhead.

5Build scope$150K build

Review platform integration scope before the initial build and match support coverage to Month 13 hiring so you do not spend ahead of service capacity.

6Cash trough-$396K

Fund enough reserve to carry the Month 29 cash trough, because the build, marketing, and staffing ramp outrun early collections.