Break-Even Analysis Calculator

1. Enter your monthly fixed costs. These are expenses you pay regardless of how many projects you complete: office rent, insurance, vehicle payments, owner salary, office staff, marketing, and software. If you already used our Overhead Cost Calculator, pull those numbers directly.

2. Enter your average project revenue. This is the typical contract value for one project. If your projects range widely, use the median value or run the calculator multiple times with different project sizes.

3. Set your average gross margin. Gross margin is the percentage of project revenue left after direct job costs (field labor, materials, subcontractors, permits). Most GCs land between 25% and 35%. If you are unsure, 25% is a conservative starting point.

4. Review your results. The calculator shows how much total revenue you need to cover all fixed costs (break-even revenue), how many projects that translates to, and the revenue targets needed to achieve 5% and 10% net profit.

Break-even revenue is the minimum annual revenue your business needs to cover all fixed costs. Every dollar of revenue above break-even is net profit. Every dollar below means you are losing money.

Here is how this calculator computes the key numbers:

Example: A GC with $17,500/month in overhead ($210,000/year) and a 25% gross margin needs $840,000 in annual revenue to break even. If the average project is $50,000, each project generates $12,500 in gross profit, meaning 17 projects per year (about 1.4 per month) are required just to cover costs.

The profit-target section takes it further. To earn a 10% net profit on top of covering overhead, you need to generate even more revenue. The formula adjusts the denominator: Revenue_for_Target = Fixed_Costs / (Gross_Margin% - Target_Net%). This is the revenue level where you are not just surviving but building a sustainable business.

Setting annual revenue goals. Break-even analysis turns vague targets like "grow the business" into a concrete revenue number. You know exactly how many projects you need per month to cover costs and hit your profit goals.

Deciding whether to hire. Adding a project manager or another crew increases your fixed costs. Run the new numbers through the calculator to see how much additional revenue you need to justify the hire.

Evaluating pricing changes. If you raise your markup from 25% to 30%, your break-even revenue drops significantly. This calculator lets you see the impact before you change your pricing.

Slow-season planning. Most GCs have seasonal dips. Knowing your monthly break-even number helps you decide whether to cut costs, pursue smaller projects, or dip into reserves during the off months.