Break-Even Calculator
Work out how many jobs you need each month to cover all your costs and start making profit. Essential for pricing strategy and business planning.
Monthly Fixed Costs
Phone, accountant, memberships, etc.
What you need to cover personal bills
Per-Job Economics
What you typically charge per job
Materials, fuel, subcontractors per job
How much each job contributes to fixed costs (75% margin)
Your Break-Even Point
Jobs Needed Per Month
12
Job #13 and beyond is profit
Break-Even Revenue
£4800
Weekly Target
Profit at Different Volumes
✓ Healthy Break-Even
Your break-even point looks achievable. Focus on consistent marketing to hit 12 jobs/month, then scale.
🎯 Lower Break-Even
Raising prices 10% typically reduces break-even by 15-20%. Easier than cutting costs.
📊 Track Monthly
Recalculate every quarter. Costs creep up and prices change - stay on top of your numbers.
💷 Build Buffer
Aim for 3-6 months of fixed costs in savings. Slow months happen - be prepared.
What is Break-Even Analysis?
Break-even analysis shows you exactly how many jobs you need to sell to cover all your business costs. Before you hit your break-even point, you're losing money. After it, you're profitable. This is THE most important number for any trade business owner to know.
🚨 Why 82% of Trade Businesses Fail in Year 1
Most contractors have no idea how many jobs they need to stay afloat. They price jobs, work hard, stay busy... and run out of money. They never calculated their break-even point.
If you don't know your break-even point, you're flying blind. This calculator fixes that.
Fixed Costs vs Variable Costs
Understanding the difference between fixed and variable costs is critical:
💰 Fixed Costs (Same Every Month)
- • Van lease/finance: £250-£500/month
- • Insurance: Business liability, van, public liability
- • Rent: Workshop, storage, or office space
- • Software subscriptions: Accounting, job management
- • Phone contract: Business mobile
- • Marketing: Website hosting, Google Ads
- • Accountant: Monthly bookkeeping fees
- • Your minimum salary: What you need to live
📈 Variable Costs (Per Job)
- • Materials: Parts and supplies used
- • Subcontractor labour: If you hire help
- • Fuel: Travel to and from jobs
- • Consumables: Sealant, tape, fixings
- • Waste disposal: For renovation/demo work
- • Equipment hire: Specialized tools per job
- • Parking/congestion: City center jobs
The Break-Even Formula
Break-Even Point (in units/jobs):
Break-Even = Fixed Costs ÷ (Average Job Price - Variable Cost Per Job)
The denominator (Average Job Price - Variable Cost Per Job) is called your Contribution Margin - how much each job contributes toward covering fixed costs.
Example: Electrician
- • Fixed costs per month: £3,500
- • Average job price: £400
- • Variable costs per job: £100 (materials, fuel)
- • Contribution margin: £400 - £100 = £300
- • Break-even: £3,500 ÷ £300 = 12 jobs/month
✓ This electrician needs 12 jobs to break even. Job #13 and beyond is pure profit.
Why Break-Even Analysis Matters
1. Pricing Strategy
If your break-even point is 50 jobs/month but you can only realistically do 30, you're pricing too low. You need to raise prices or reduce costs.
2. Cash Flow Planning
Know which months are dangerous. December is slow? You need 3 months of reserves or you'll need emergency loans.
3. Growth Decisions
Hiring an employee adds £2,500/month fixed costs. How many extra jobs do you need to break even? The calculator shows you instantly.
4. Investor/Loan Applications
Banks want to see break-even analysis. It proves you understand your business financially and have a realistic plan to profitability.
How to Improve Your Break-Even Point
You can improve your break-even point (need fewer jobs) by:
🔻 Reduce Fixed Costs
- • Lease van instead of buying (lower monthly cost)
- • Use home as business address (no rent)
- • Cancel unused subscriptions and software
- • Shop around for insurance annually
- • Negotiate better rates with suppliers
- • DIY marketing instead of paying agencies
🔺 Increase Contribution Margin
- • Raise prices (biggest impact)
- • Negotiate better material prices
- • Reduce waste and material overspend
- • Improve efficiency (do jobs faster)
- • Add higher-margin services
- • Optimize travel routes (less fuel)
💡 The Fastest Way to Reduce Break-Even
Raising prices by 10% typically has 3-5x more impact than cutting costs by 10%. Why? Because price increases go straight to your contribution margin.
Example: £400 job with £100 costs = £300 margin. Raise price to £440 = £340 margin (13% improvement). Cut costs to £90 = £310 margin (3% improvement).
Real-World Break-Even Examples by Trade
| Trade | Fixed Costs/Mo | Avg Job | Variable/Job | Break-Even |
|---|---|---|---|---|
| Plumber | £3,200 | £350 | £90 | 13 jobs |
| Electrician | £3,500 | £400 | £100 | 12 jobs |
| Cleaner | £2,800 | £150 | £20 | 22 jobs |
| HVAC Engineer | £4,200 | £800 | £300 | 9 jobs |
| Handyman | £2,500 | £200 | £40 | 16 jobs |
Common Break-Even Mistakes
❌ Forgetting to Pay Yourself
Your salary is a fixed cost. If you need £2,000/month minimum to live, that goes in fixed costs. Otherwise you're not truly breaking even.
❌ Using Average Job Price When Jobs Vary Wildly
If you do both £150 repairs and £3,000 installations, calculate break-even for each separately. Averages hide the truth.
❌ Not Including Tax in Fixed Costs
Set aside 30% of profit for tax. If you break even at 15 jobs but forget tax, you actually need 20+ jobs.
❌ Setting Unrealistic Job Volume
If break-even is 40 jobs/month but you can physically only do 25, your business model is broken. Fix pricing or costs.
Related Calculators
Profit Margin Calculator
Calculate gross profit, net profit, and markup for jobs
Hourly Rate Calculator
Work out what to charge per hour to hit profit goals
Helpful Resources
Use Break-Even as a Dashboard, Not a One-Off
This calculator gives you your number today. The real win is checking in regularly so you know when costs, prices, or workload mean you need to adjust.
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