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Key Takeaways
- The baseline monthly operating cost before variable expenses starts near $31,242, dominated by $26,042 in staff payroll for the initial four FTEs.
- A minimum working capital buffer of $660,000 is necessary to sustain operations through the initial deficit period until the projected breakeven point.
- The financial model forecasts a 15-month runway, requiring operations to continue until March 2027 before achieving positive cash flow.
- To accelerate profitability, management must focus on controlling variable expenses, which account for 11% of 2026 revenue, and optimizing the largest cost category, direct labor and payroll.
Running Cost 1 : Staff Payroll
Initial Payroll Load
Your initial monthly payroll commitment for the first 35 employees is estimated at $26,042. This figure covers salaries only for the core team, including the CEO and the Senior IT Technician, but excludes the significant costs associated with employer payroll taxes and employee benefits packages. That's the base number you need to fund.
Cost Breakdown
This $26,042 monthly figure is the gross salary base for 35 FTEs (Full-Time Equivalents). It's derived from internal salary benchmarking for roles like technicians and administrative staff, plus set salaries for executive positions like the CEO. Remember, this is pre-tax; you must add employer FICA (7.65%) and unemployment insurance on top of this estimate.
- Covers 35 salaries.
- Excludes employer taxes.
- Includes CEO/Sr. IT roles.
Payroll Management
Controlling this early expense means managing headcount growth strictly against revenue targets. Avoid premature hiring for non-critical roles if generalists can cover initial needs; that’s a common mistake. If you’re struggling to cover the $26k base, consider pushing the Senior IT Technician start date back by 60 days, defintely.
- Stagger hiring past 35.
- Use contractors initially.
- Benchmark salaries carefully.
True Cash Outlay
The biggest immediate risk after setting the base salary is underestimating the statutory add-ons. If benefits add 25% to salaries and payroll taxes add 10%, your true monthly cash outlay jumps from $26,042 to about $34,000. That's nearly $8,000 more per month you must fund from operating cash before the first dollar of subscription revenue hits.
Running Cost 2 : Office Space
Lock Rent Early
Budget $2,500 monthly for office rent. This fixed cost is essential to house the core team, including the initial 35 FTEs, even when primary service delivery is remote. Honestly, this overhead needs locking down defintely fast to establish operational base.
Rent Inputs
This $2,500 covers the physical location needed for management and core staff. It’s a critical fixed expense, unlike Technician Direct Labor, which scales at 120% of revenue in 2026. You need this space before payroll scales too high.
- Fixed monthly commitment.
- Supports initial 35 employees.
- Must be secured before major hiring.
Manage Space
Since this is a remote IT service, avoid signing long leases immediately. Look for flexible, short-term co-working agreements initially. Signing a 3-year lease now locks in risk when payroll is already $26k. A flexible setup saves capital.
- Favor short-term commitments.
- Avoid long-term physical leases.
- Use space only for core admin staff.
Rent vs. Labor
At $2,500, rent is only about 9.6% of your initial $26,042 monthly payroll expense. This ratio shows rent is small relative to labor, but it must be paid regardless of revenue coming in.
Running Cost 3 : Technician Direct Labor
Labor Cost Warning
Your 2026 plan sets Technician Direct Labor at 120% of revenue. This means the cost to deliver the service exceeds what you bill for it, which is a major red flag. You must immediately map technician efficiency against billable hours to find the gap. Honestly, this projection requires defintely immediate review.
Labor Cost Drivers
This cost covers the wages for technicians actively resolving client issues, tied directly to billable time. To model this accurately, you need the projected 2026 revenue figure and the expected technician utilization rate. What this estimate hides is the impact of that 20% overage on your gross margin.
- Projected 2026 Revenue target.
- Technician billable hour targets.
- Average loaded technician wage rate.
Cutting Labor Costs
You can’t just cut technician pay, but you can improve throughput. Since you guarantee connection in under five minutes, focus on reducing average handle time (AHT). The AI diagnostic tool should help cut resolution time significantly. If you improve efficiency by 10%, you reduce the 120% allocation.
- Boost utilization via better scheduling.
- Use AI tools to cut resolution time.
- Scrutinize non-billable prep time closely.
Review 2026 Model
A 120% direct labor allocation suggests either revenue targets are too low or technician pay/inefficiency is too high for your subscription model. Check if the initial $26,042 monthly payroll scales linearly or if you need more senior, higher-cost staff sooner than planned.
Running Cost 4 : Remote Access & Cloud Tools
2026 Cloud Cost Structure
Your 2026 cloud stack requires a baseline fixed spend of $1,000 monthly for essential software, plus a significant 40% of revenue allocated to usage-based tools. This structure means scalability costs scale directly with sales volume, making margin control tricky. Honestly, this is a major variable expense.
Fixed Software Inputs
Fixed software costs cover your Customer Relationship Management (CRM) system at $400 monthly and the specialized AI Diagnostic Tool at $600 monthly. These are necessary foundational expenses for tracking clients and speeding up resolutions, regardless of how many jobs you run. You need these inputs locked in before calculating true contribution margin.
- Fixed CRM license: $400/month.
- Fixed AI tool license: $600/month.
Managing Usage Spend
Managing the 40% variable cloud cost is critical since it eats margin fast. This usage fee is tied to actual remote sessions or data processing, so watch technician efficiency defintely. If resolution time dips, usage costs spike. Try negotiating tiered pricing on the usage component rather than accepting a flat percentage.
- Benchmark against other variable costs.
- Tie usage fees to technician performance.
Cost Weighting
Compared to fixed payroll ($26,042 monthly) or even the 120% variable labor cost, this 40% revenue share for cloud tools is a huge lever. If you hit $100k revenue, that’s $40k gone just for usage. This cost needs constant review against the value derived from the AI tool's speed advantage.
Running Cost 5 : Digital Ad Spend
2026 Ad Spend Target
You need to acquire about 334 new customers in 2026 using the planned $50,000 marketing budget. This spend must keep your Customer Acquisition Cost (CAC) strictly at $150 per customer. This outlay represents a significant portion of your variable expenses tied to revenue.
Marketing Inputs
This $50,000 annual spend covers all digital advertising efforts for 2026. To hit this target, you must acquire exactly 334 customers ($50,000 / $150 CAC). This budget is set assuming this spend is 70% of your total variable expenses related to acquiring revenue.
- Annual Spend Target: $50,000
- Target CAC: $150
- Required Customers: 334
CAC Control
Managing CAC below $150 is critical because the spend is high relative to projected revenue growth. If onboarding takes too long, churn risk rises, wasting acquisition dollars. You must defintely optimize conversion rates from lead to paid subscriber to maximize the return on every ad dollar spent.
- Avoid long sales cycles.
- Test ad creative weekly.
- Track LTV:CAC ratio closely.
Variable Cost Link
If your actual variable costs tied to revenue exceed the 70% assumption, you must immediately reduce the $50,000 budget or increase the average revenue per user (ARPU). Hitting 334 customers is the operational threshold for this marketing plan to hold true.
Running Cost 6 : Compliance & Admin Fees
Mandatory Admin Budget
You must budget $1,100 monthly for essential compliance overhead. This covers $800 for Legal & Accounting Fees and $300 for Business Insurance, keeping your remote IT support operations safe from risk.
Cost Breakdown
These administrative costs are fixed overhead, meaning they don't change with service volume. Budget $800 monthly for necessary legal counsel and accounting services to manage payroll and tax filings for your US operations. Also, set aside $300 monthly for business insurance policies protecting against operational liabilities.
Managing Fixed Fees
Since these are fixed, optimization focuses on rate negotiation, not volume reduction. Shop insurance quotes defintely annually to ensure competitive premiums for your tech liability coverage. For legal work, use flat-fee retainers instead of hourly billing when possible to control spend.
Action Item
Ensure your initial operating budget strictly allocates $1,100 per month for these non-negotiable compliance expenses. Failing to reserve this amount immediately exposes your growing remote support business to unnecessary regulatory or operational risk.
Running Cost 7 : Utilities & Hosting
Fixed Uptime Budget
You must budget $400 monthly for essential fixed utilities and hosting to keep your remote support operation running 24/7. This covers the basics: $250 for utilities and internet access, plus $150 for website maintenance. If this fails, your service guarantee breaks.
Estimating Hosting Needs
This $400 is a fixed operational baseline. Estimate it by confirming quotes for business-grade internet access (targeting $250) and selecting a reliable hosting package supporting 24/7 traffic (budgeting $150). This cost is non-negotiable for uptime.
- Internet: ~$250 fixed monthly.
- Hosting: ~$150 fixed monthly.
- Total fixed overhead: $400.
Managing Connectivity Costs
Since uptime is defintely your core promise, cutting these too deep is risky. Don't skimp on internet speed; slow connections kill first-call resolution rates. You might save $20 by bundling services, but focus on service level agreements (SLAs) over raw price cuts.
- Avoid cheap, shared hosting plans.
- Bundle utilities if possible.
- Prioritize SLA guarantees.
Operational Context
Compare this $400 against your $26,042 monthly payroll for 35 technicians. Failure here means technicians can't connect to clients, effectively idling expensive labor. This cost is the digital foundation supporting all service delivery.
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Frequently Asked Questions
Fixed monthly operating costs start around $31,242, driven by payroll ($26,042) and fixed overhead ($5,200) Variable costs, including direct labor and marketing, add another 11% of revenue in the first year