Break-Even Calculator for Service Businesses
By BRIX Editorial Team · Updated
A service business breaks even when each job's contribution (average ticket minus direct job cost) adds up to its monthly overhead. Break-even jobs = fixed costs ÷ (ticket − cost per job). With $18,000 of monthly overhead and $225 left from each $450 job, you need 80 jobs, or $36,000 a month.
- Break-even revenue per month
- $36,000
- Break-even jobs per week
- 18.5
- Contribution per job
- $225
- Contribution margin
- 50.0%
- Jobs per month for your profit target
- 107
- Revenue per month for your profit target
- $48,150
- Profit at your current volume
- -$1,800
Your break-even is 80 jobs a month. You're at 72, 8 short, which loses about $1,800 a month. Each extra job adds $225; a higher ticket or lower job cost moves the line too.
Key takeaways
- Break-even jobs = monthly fixed costs ÷ (average ticket − direct cost per job).
- Break-even revenue = fixed costs ÷ contribution margin, where contribution margin = (ticket − job cost) ÷ ticket.
- Put your own salary in fixed costs, or break-even only means the business survives while you work for free.
- Raising prices moves break-even faster than cutting costs, because every dollar of price is pure contribution.
What is the break-even point for a service business?
Your break-even point is the number of jobs, or the amount of revenue, where the money left over from jobs exactly pays your overhead. Below it you lose money every month; above it, each extra job's contribution is profit. For service businesses it's most useful in jobs per month, because that's the number you can see on the schedule. See break-even point for the full definition.
Break-even jobs = F ÷ (T − V) Break-even revenue = F ÷ ((T − V) ÷ T)
- F
- fixed costs per month (overhead, including your salary)
- T
- average ticket: revenue ÷ jobs
- V
- direct (variable) cost per job: materials, field labor, card fees
- T − V
- contribution per job
How to calculate your break-even point
- 1
Add up fixed monthly costs.
Everything you pay whether or not you run a job: rent, office pay, your own salary, insurance, truck payments, software, marketing. The overhead rate calculator has the full list.
- 2
Find your average ticket.
Last few months' revenue ÷ jobs completed. See average ticket.
- 3
Find direct cost per job.
Materials, field labor at its burdened cost, and payment processing fees for an average job. Divide last quarter's job costs by jobs completed.
- 4
Divide.
Ticket − direct cost = contribution per job. Fixed costs ÷ contribution = break-even jobs. Round up; there's no such thing as half a job.
- 5
Add your profit target.
(Fixed costs + target profit) ÷ contribution tells you how many jobs it takes to make the profit you want.
Which lever moves break-even the most?
Three things move the line: price, job cost and overhead. On the worked example, a 10% change to each gives very different results.
| Change | Ticket | Job cost | Overhead | Contribution per job | Break-even jobs |
|---|---|---|---|---|---|
| Starting point | $450 | $225.00 | $18,000 | $225.00 | 80 |
| Raise prices 10% | $495 | $225.00 | $18,000 | $270.00 | 67 |
| Cut job costs 10% | $450 | $202.50 | $18,000 | $247.50 | 73 |
| Cut overhead 10% | $450 | $225.00 | $16,200 | $225.00 | 72 |
A price increase drops straight to contribution, so it cuts break-even the most. That's why raising prices, selling maintenance agreements and offering good-better-best options usually beat cost-cutting.
Break-even by trade
Trades break even in very different ways. A roofer can cover a month with a few jobs, while a lawn crew needs hundreds of visits. These example shops show the spread; the inputs are illustrative, not averages.
| Trade | Shop | Fixed / month | Avg ticket | Cost per job | Break-even jobs | Break-even revenue |
|---|---|---|---|---|---|---|
| HVAC | Service and repair, 3 techs | $32,000 | $520 | $250 | 119 | $61,630 |
| Plumbing | Service and drain, 2 techs | $22,000 | $480 | $230 | 88 | $42,240 |
| Electrical | Residential service, 2 electricians | $24,000 | $650 | $340 | 78 | $50,323 |
| Roofing | Residential reroofs, 2 crews | $45,000 | $14,000 | $9,800 | 11 | $150,000 |
| Landscaping | Maintenance routes, 2 crews | $15,000 | $65 | $38 | 556 | $36,111 |
| Cleaning | Residential cleaning, 6 cleaners | $9,000 | $180 | $110 | 129 | $23,143 |
Common break-even mistakes
- Leaving out your own pay. If you take home whatever's left, put a fair salary in fixed costs so break-even means a business that pays you.
- Using a busy-season ticket. Average tickets swing with the season. Run the numbers for your slow months too.
- Counting field labor as fixed when techs are paid hourly. If tech pay rises and falls with jobs, it's a job cost. If you pay salaries regardless of work, it's fixed. Pick one.
- Ignoring callbacks and free warranty work. Those are jobs that add cost but no ticket. Track your callback rate.
- Only checking once. Break-even moves with every new hire, truck or price change. Rerun it whenever one of those happens.
Jobs you don't get to are jobs that don't count toward break-even. The missed call revenue calculator shows how many go to voicemail.
Frequently asked questions
How do I calculate break-even for a service business?
Subtract your direct cost per job from your average ticket to get the contribution per job. Divide your monthly fixed costs by that contribution. The result is how many jobs a month you need to cover overhead.
What is the break-even revenue formula?
Break-even revenue = fixed costs ÷ contribution margin. Contribution margin is (average ticket − direct cost per job) ÷ average ticket. With $18,000 of fixed costs and a 50% contribution margin, break-even revenue is $36,000 a month.
What costs are fixed and which are variable for a contractor?
Fixed costs stay the same whether you run 50 jobs or 100: rent, office staff, insurance, truck payments, software and your salary. Variable costs rise with each job: materials, hourly field labor, fuel for job driving and card processing fees.
How many jobs do I need to break even?
Divide monthly fixed costs by the profit each job leaves after its direct costs. A shop with $18,000 of overhead that clears $225 per job needs 80 jobs a month. Enter your own numbers in the calculator.
How can I lower my break-even point?
Raise prices, cut direct job costs, or cut overhead. Raising the average ticket usually has the biggest effect because every extra dollar is contribution. In the example, a 10% price increase cuts break-even from 80 jobs to 67.
Should I use break-even jobs or break-even revenue?
Use both. Jobs per month is easier to manage day to day because you can see it on the schedule. Revenue is easier to check against your P&L. If your average ticket changes, the jobs number moves even if revenue doesn't.
Related
- What Is a Break-Even Point?Break-even point is where revenue covers every cost. See how many jobs and how much revenue your trades business needs each month to stop losing money.
- What Is Contribution Margin?Contribution margin is price minus every variable cost of a job. See the formula, how it differs from gross margin, and how to use it before you discount.
- What Is Average Ticket?Average ticket is revenue divided by jobs invoiced. Learn how to calculate it by job type, why a blended number misleads, and how trades shops raise it.
- Overhead Rate CalculatorCalculate your overhead rate as a % of revenue, % of direct labor and $ per billable hour. See what to count as overhead and how to price it into jobs.
- Job Pricing Calculator for ContractorsPrice any job for profit: enter labor hours, burdened rate, materials, overhead and target profit to get the price to quote, your margin and markup.
- Gross Profit per Truck CalculatorCalculate gross profit per truck per day, month and year, the daily number each truck needs to cover overhead, and whether adding a truck will pay.
- Cash Flow Runway Calculator for Trades BusinessesFree cash runway calculator: see how many months your business can cover payroll and bills at the current burn rate, and what it takes to break even.
- Missed Call Revenue CalculatorFree calculator: see how much revenue missed calls cost your trades business per week, month and year. Enter calls, miss rate, booking rate and ticket.
- Maintenance Agreement Pricing CalculatorPrice HVAC, plumbing, pest control and lawn care maintenance agreements from your real costs. Get yearly and monthly prices, margin and tech hours needed.
- Markup and Margin CalculatorConvert markup to margin and margin to markup, or find both from cost and price. Free calculator with a markup-to-margin chart and trade examples.