CONSTRUCTION BREAK-EVEN ANALYSIS.
Break-even analysis answers one question: how much revenue does your business have to do before it makes its first dollar of profit? Break-even revenue equals total fixed overhead divided by gross profit margin percentage. If your annual fixed overhead is $600,000 and your gross profit margin is 20%, your break-even revenue is $3,000,000. Knowing that number changes how you think about job selection, slow seasons, and every overhead decision you make.
The number is useful because it turns vague questions into arithmetic. Should we take the low-margin job to keep the crew busy? That depends on whether the gross profit it throws off covers a month of overhead. Should we hire the second estimator? That depends on how much revenue the salary adds to the floor. Without a break-even figure, both of those get decided on how the year feels. With one, they get decided on a number you can check against the bank statement in ninety days.
WHAT IT MEANS.
Break-even revenue is total fixed overhead divided by gross profit margin percentage, which is the minimum annual revenue the business has to do before it makes its first dollar of net profit.
WHY THE FLOOR IS INVISIBLE.
You don't know how much work you need to stay profitable
Most subcontractors can't say what their break-even revenue is, meaning the minimum annual volume required to cover all fixed costs and overhead before a dollar of profit exists. Without it, slow season planning, job selection, and overhead decisions all happen with no floor to measure against. Every one of those calls then rests on how busy the shop feels.
You're taking low-margin work to stay busy without knowing if it helps
A job that produces revenue but no margin keeps crews busy without moving the profit line. Break-even at the gross margin level tells you how much gross profit the year needs in order to cover overhead. That's what tells you whether a low-margin project helps the annual position or just keeps people occupied.
Overhead decisions get made without their break-even impact
Adding an office manager, a new truck, or a software subscription raises your overhead floor, which raises the revenue you have to do before you make a dollar. Most overhead decisions get judged on whether the expense feels justified. Almost nobody runs the revenue requirement that comes attached to it.
WHAT IT LOOKS LIKE IN DOLLARS.
Break-even revenue equals total fixed overhead divided by gross profit margin percentage. If your annual fixed overhead is $600,000 and your gross profit margin is 20%, your break-even revenue is $3,000,000. At $3M in revenue with 20% gross margins you generate $600,000 in gross profit, which covers overhead and leaves nothing for net profit. Every dollar above $3M at 20% margin goes to net profit.
Job-level break-even analysis shows the minimum contract value at which a specific job contributes to overhead coverage. If your overhead burden per job, based on expected project duration, is $40,000 and your gross margin is 20%, the job has to be at least $200,000 to contribute to overhead coverage rather than just producing gross profit. Anything smaller is being carried by the rest of the book.
Adding a $70,000 employee to overhead at a 20% gross margin requires $350,000 of additional revenue to break even on that hire, before the hire produces any net profit. That's the question to answer before the offer letter goes out rather than after. The salary is the small number and the revenue requirement is the big one.
WHERE THE FLOOR GETS USED.
We build the job-level break-even into ControlQore job setup for Executive clients evaluating a go or no-go. The overhead burden per job comes off expected project duration rather than a flat percentage, so a six week job and a nine month job carry different numbers. The minimum contract value that contributes to overhead becomes a figure you can check before the bid instead of a feeling.
Before a significant overhead addition, we run the revenue requirement for Executive clients so the number is known before the commitment is made. A $70,000 hire at a 20% gross margin needs $350,000 of new revenue to break even. If the backlog and the pipeline don't support that, the answer isn't yet, and it takes ten minutes to find out.
Fixed overhead runs twelve months and doesn't slow down over the winter. If 60% of your revenue comes in during 6 months of active season, the break-even for that stretch is different from the annual average. We build the seasonal break-even into the annual financial plan for Executive clients so peak season gets priced to carry the slow one.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
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