Contractor Break-Even Analysis

Break-even is the point where total revenue equals total costs — no profit, no loss. Knowing this number tells you the minimum you must generate in a slow month just to keep the lights on, and it's the number that should set your floor for accepting or declining work, especially in the off-season for seasonal trades.

Break-even revenue = Fixed costs / Contribution margin (the percentage of each sale left after variable costs). If your monthly fixed overhead is $12,000 and your jobs typically run a 40% contribution margin after materials and direct labor, your break-even revenue is $12,000 / 0.40 = $30,000 for the month. Anything below that and you're operating at a loss that month, even if individual jobs look profitable.

Once you know your monthly break-even, you can translate it into a job count ('I need at least three kitchen remodels a month') or a crew utilization target, which is far more actionable on a Tuesday morning than an abstract dollar figure. Our Break-Even Calculator lets you adjust fixed costs and margin to see how close you are, and how a slow month changes the picture.