Security & low voltage
Security Break-Even Calculator
Works break-even for a security business, where recurring revenue covers fixed costs first.
Result
Break-even, not a target. It is the point where the business stops losing money, which is a floor rather than a plan. Owner's pay only counts here if it is inside the fixed costs you entered.
Get a Free Business AuditHow the calculation works
Fixed costs divided by gross profit per job gives jobs needed monthly. The useful refinement in a security business is to net recurring monthly revenue off the fixed costs before dividing, because recurring revenue arrives whether or not anyone installs anything that month. A business with a substantial monitoring book has a much lower installation break-even than the same business without one, which is the structural advantage of the recurring model.
What moves the number
- Recurring monthly revenue, which offsets fixed costs directly.
- Fixed costs including licensing, insurance, vehicles and premises.
- Gross profit per installation.
- Attrition, since the recurring offset erodes without replacement.
Where this one goes wrong
A recurring book makes break-even look comfortable and that comfort is conditional on retention. Netting recurring revenue against fixed costs is correct, and it only holds while the book holds, so a business coasting on monitoring revenue while attrition runs unchecked is heading toward a break-even figure it has not planned for. Review the offset against the attrition rate rather than treating recurring revenue as permanent. The licensing and insurance fixed costs are also worth stating explicitly, since they are a cost of being allowed to trade rather than of trading.
Before you quote
- Net recurring revenue against fixed costs, then review it against attrition.
- Include licensing and insurance as fixed costs of operating.
- Recalculate as the recurring base grows or shrinks.
Questions
About this calculator
How does recurring revenue affect break-even?
It offsets fixed costs directly, because it arrives whether or not anyone installs anything that month. A business with a substantial monitoring book needs far fewer installations to break even than the same business without one, which is the structural advantage of the model.
Is it safe to rely on monitoring revenue to cover overhead?
Only while the book holds. Netting it against fixed costs is correct arithmetic and it is conditional on retention, so a business coasting on recurring revenue while attrition runs unchecked is approaching a break-even figure it has not planned for. The offset needs reviewing against cancellation.
What counts as a fixed cost in security?
Licensing, insurance, vehicles, premises, central station contracts and the core technical staff you keep regardless of volume. Licensing and insurance are worth noting separately, since they are costs of being permitted to trade rather than costs of doing the work.
The formula
break-even jobs = fixed costs / (average job value x gross margin%)
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How to use this calculator
- Monthly fixed costs ($). Rent, office wages, insurance, vehicle payments, software, advertising.
- Average job value ($). Enter your own figure; the page starts at $2,400.
- Gross margin per job (%). Enter your own figure; the page starts at 44%.
The result updates as you type, so you can try a figure, see what it does to jobs needed per month, 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
| Input | Value |
|---|---|
| Monthly fixed costs | $11,000 |
| Average job value | $2,400 |
| Gross margin per job | 44% |
What comes out
| Result | Value |
|---|---|
| Jobs needed per month main result | 11 |
| Revenue needed per month | $26,400 |
| Gross profit per job | $1,056 |
| Jobs per working day | 0.5 |
You need 11 jobs a month, about 0.5 a working day, to cover $11,000 of fixed cost. That is $26,400 of revenue before the business earns anything.
How sensitive the answer is
Holding everything else steady and changing only monthly fixed costs, this is what happens to jobs needed per month. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Monthly fixed costs ($) | Jobs needed per month |
|---|---|
| $5,500 | 6 |
| $8,250 | 8 |
| $11,000 example above | 11 |
| $16,500 | 16 |
| $22,000 | 21 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Monthly fixed costs ($)
- Rent, office wages, insurance, vehicle payments, software, advertising.
- Average job value ($)
- A money amount, starting at $2,400.
- Gross margin per job (%)
- A percentage, between 0 and 95, starting at 44%.
What the results tell you
| Result | What it is |
|---|---|
| Jobs needed per month | The headline result. A number. |
| Revenue needed per month | A money figure. |
| Gross profit per job | A money figure. |
| Jobs per working day | A decimal figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.