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Contractor & construction

Contractor Break-Even Calculator

Works the jobs or revenue needed to cover a contractor's fixed base.

Your numbers

$
$
$
$
What you want left over after everything is paid.

Result

Jobs per month to break even 62
Break-even revenue $59,111
Jobs to hit your profit target 96
Contribution per job $450
Break-even is 62 jobs a month. Your $15,000 profit target needs 96, which is 33 more.

Fixed and variable costs are assumed steady across the month. Seasonal trades should run this on a peak month and a slow month separately.

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How the calculation works

Fixed costs divided by contribution per job, or by gross margin for a revenue figure, giving what has to be sold to cover the cost of being in business. The fixed base continues through weather, quiet periods and the off-season regardless of whether work is happening.

What moves the number

  • Fixed costs including vehicles, insurance and any retained staff.
  • Contribution per job after direct costs.
  • Job mix, since contribution varies widely.
  • Seasonality in outdoor trades.

Where this one goes wrong

Run break-even for a weak month as well as an average one, because in a seasonal trade the fixed base has to be covered in January as well as June and the figure that matters is whether the quiet months are survivable. Employed crews raise it substantially, since they turn a variable cost into a fixed one and a quiet month is then absorbed entirely by the business.

Before you quote

  • Run break-even for a weak month as well as an average one.
  • Count employed crews as fixed cost in quiet periods.
  • Use contribution by job type rather than blended.

Questions

About this calculator

Why calculate break-even for a weak month?

Because the fixed base is level and the work is seasonal. A figure that looks comfortable in June can be unreachable in January, and whether the quiet months are survivable is the question the calculation should answer.

Do employed crews raise break-even?

Substantially, because they turn a variable cost into a fixed one. A quiet month is then absorbed entirely by the business, which is the structural trade-off against the flexibility of subcontracting.

Should it be expressed in jobs or revenue?

Both are useful. Revenue is easier to compare against a pipeline; jobs per month is easier to act on. Using contribution by job type rather than a blended average makes either version more reliable.

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How to use this calculator

  1. Fixed costs per month ($). Enter your own figure; the page starts at $28,000.
  2. Average job price ($). Enter your own figure; the page starts at $950.
  3. Variable cost per job ($). Enter your own figure; the page starts at $500.
  4. Target monthly profit ($). What you want left over after everything is paid.

The result updates as you type, so you can try a figure, see what it does to jobs per month to break even, and change it back. Nothing you enter is sent anywhere or saved.

A worked example

These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.

What goes in

InputValue
Fixed costs per month$28,000
Average job price$950
Variable cost per job$500
Target monthly profit$15,000

What comes out

ResultValue
Jobs per month to break even main result62
Break-even revenue$59,111
Jobs to hit your profit target96
Contribution per job$450

Break-even is 62 jobs a month. Your $15,000 profit target needs 96, which is 33 more.

How sensitive the answer is

Holding everything else steady and changing only fixed costs per month, this is what happens to jobs per month to break even. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.

Fixed costs per month ($)Jobs per month to break even
$14,000 31
$21,000 47
$28,000 example above 62
$42,000 93
$56,000 124

Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.

What each figure means

Fixed costs per month ($)
A money amount, starting at $28,000.
Average job price ($)
A money amount, starting at $950.
Variable cost per job ($)
A money amount, starting at $500.
Target monthly profit ($)
What you want left over after everything is paid.

What the results tell you

ResultWhat it is
Jobs per month to break evenThe headline result. A number.
Break-even revenueA money figure.
Jobs to hit your profit targetA number.
Contribution per jobA money figure.

Overhead is where these go wrong

Pricing and margin figures are only as good as the cost you put in. If your cost covers parts and wages but not the van, the insurance, the phone and the unbilled hours, the markup is paying for those before it becomes profit, and the margin you think you are making is not the one you are making.

Find the jobs you already paid for

A free audit shows how many of your inbound leads never got a response, and what closing that gap is worth.