Break-Even Analyzer

What gross margin should I use for my trade?

Your own, from recent jobs: (job value − materials − direct labour, including subs) ÷ job value. Margins vary too much by trade, market, pricing and how you count labour for a published figure to stand in for yours. Service and repair work usually runs richer margins than big installs, so if you do both, run the tool separately for each. If you don't track job costs yet, start there: it's the number this whole calculation rests on.

Should management fees be included?

Yes — they're a real monthly cost. The tool starts at $1,500 as an example; enter your own fee. If you're running ads in-house, set it to $0 plus your real internal time cost.

What happens above break-even?

Each additional job adds its gross profit (job value × margin) toward overhead and profit. If break-even is 3 jobs and you book 10, jobs 4-10 add 7 × (job value × margin) — but until you pass the half line the tool shows, overhead rarely gets covered.

How is this different from the ROI calculator?

ROI Calculator projects full-funnel results from ad spend + CPL + close rate + job value. This Break-Even tool answers the simpler question: 'what's the minimum job count I need to be profitable?' — useful for setting realistic minimum-volume goals.

Does break-even change month-to-month?

Yes — seasonally and with offer changes. For example, a smaller winter average job and a tighter margin push the break-even job count up, while a bigger summer job pulls it down unless ad spend rises with the season. Recalculate quarterly or whenever you change pricing, materials cost, or ad spend. A stale break-even number can make you falsely believe you're losing or winning.

What's the difference between break-even and 'profitable'?

Break-even here = gross profit on the jobs covers ad spend + management fee. Profitable = gross profit also covers overhead and your salary. Hitting break-even on Meta doesn't make the broader business profitable. The tool shows two more lines using this site's rule of thumb: enough jobs for twice the break-even gross profit keeps ad costs under half of it, and four times is the comfortable plan (a quarter). Because jobs come in whole numbers, those counts are rounded up from the exact multiples. Use this tool to set the floor; use the ROI Calculator to project the ceiling.

Should I include cost-of-goods in margin or treat it separately?

Include it in margin. The 'Gross Margin on Jobs' field should = (Job Value − COGS) / Job Value. So if you sell a $4,000 roof for $4,000 with $2,400 in materials + sub-labor, your margin is 40%. The remaining $1,600 covers ad spend, management fees, your time, and net profit. Don't double-count COGS by trying to factor it elsewhere — keep margin clean and consistent.

How does the break-even point change for trades with strong recurring revenue (pest control, lawn care)?

Recurring revenue dramatically lowers your effective break-even. If a $300 monthly pest service customer stays 18 months, real lifetime revenue is $5,400, not $300. So a $300 cost-per-acquisition that looks unprofitable on the first invoice ($300 cost vs $300 revenue) brings in 18x its cost in revenue over that lifetime (profit depends on your margin). For recurring trades, replace 'first job value' with 'expected 12-month customer value' in the Job Value field, and break-even drops accordingly — if customers really do stay. Run the LTV Calculator (/tools/ltv-calculator) to lock in your real lifetime number first; then plug it into break-even for the right answer.

What if my margin varies dramatically between job types — should I run break-even per service line?

Yes, separately. Many contractors have 2-3 service lines with different margins: hypothetically, a roofing company might have repair (60% margin, $2K avg ticket) and replacement (35% margin, $12K avg ticket). Running blended numbers in this calculator gives you a fictional 'average' break-even that matches no actual job type. Better: run the calculator twice — once with repair numbers, once with replacement numbers. You'll see two different break-even thresholds. Then set ad campaigns + creative to match each segment ('Free leak inspection — same-day' for repairs vs 'Whole-roof replacement consultation' for replacements). Blending them tends to optimise for whichever has more volume, and the higher-margin segment gets neglected.

How do I account for fixed overhead (insurance, vehicles, office, salaries) in the break-even math?

Don't include fixed overhead in this calculator — it would distort the unit-economics question. This calculator answers: 'For each marginal job, am I profitable on the ads that brought it?' Fixed overhead is paid regardless. Better approach: run THIS calculator first to confirm marginal profitability (each booked job covers ad cost + COGS); then separately calculate 'how many TOTAL booked jobs do I need monthly to cover fixed overhead?' = monthly fixed cost ÷ (avg job value × gross margin). Two different math problems: (1) ad campaign profitability per job (this tool); (2) overall business break-even per month (separate calc). Conflating them gives you an artificially-high break-even number that makes profitable campaigns look unprofitable. Keep ad math + overhead math in separate buckets.

What's the right way to read this calculator's output to know whether I should INCREASE or DECREASE budget?

Three-zone interpretation (the multiples and budget steps are rules of thumb, matching the site's quarter/half rule): (1) ZONE A (jobs booked at 4x break-even or more — ad + management cost is a quarter of gross profit or less) — room to scale. INCREASE budget in steps of about 15-20%, giving each a few weeks; (2) ZONE B (2x to 4x break-even — costs between a quarter and a half of gross profit) — profitable but tight. HOLD budget; improve close rate or offer to move into Zone A; (3) ZONE C (under 2x break-even — costs more than half of gross profit) — overhead rarely gets covered, and under 1x the ads lose money outright. CUT budget (say 30-40%) AND audit fundamentals (offer, creative, targeting). It's easy to sit in Zone B for months without realising it — 'breaking even' but not actually growing. Push for Zone A with tactical changes (better offer, fresh creative, fixing follow-up speed) BEFORE adding more budget. More money on Zone B campaigns just means more break-even spend; the path to profit is moving the campaign INTO Zone A first, then scaling.

How does break-even change when I'm running multiple campaigns simultaneously vs a single campaign?

Run break-even per campaign separately, then aggregate. Why: each campaign has different CPL + close rate + job value combinations. A 'good' campaign in Zone A subsidizes a 'bad' campaign in Zone C — your aggregate looks healthy while you're actually wasting half your budget. Run THIS calculator per campaign or per major audience-creative-offer combo. Identify Zone C campaigns + cut or fix them. Identify Zone A campaigns + scale them. Your aggregate break-even should drift downward over time as you prune the losers. Contractors who only check aggregate break-even see 'we're profitable overall' and can miss losing campaigns being kept alive by winning ones. Per-campaign discipline is how you progress from 'profitable on average' to 'profitable on every line item.'

How do I model the impact of price increases on my break-even point — does charging more help or hurt?

Price increases dramatically lower break-even AND raise total profit. The math: if your job value goes from $5K to $6K (20% increase) at the same gross margin %, your per-job profit jumps proportionally. Break-even job count drops by ~17%. Example: at $5K avg job × 35% margin = $1,750 gross profit per job. Monthly ad + management cost $5K = 2.86 break-even jobs. Same business with $6K avg job × 35% margin = $2,100 per job. Break-even = 2.38 jobs. The 20% price increase results in ~17% fewer break-even jobs needed. A price rise can lower your close rate somewhat, so model both effects: run the calculator with your current numbers, then again with prices raised 15% and a slightly lower close rate. The break-even improvement is often larger than the volume you would need to lose to cancel it out — but test on a subset of new leads before rolling it out.

How do I model break-even when I'm running a sale or seasonal discount that temporarily reduces my margin?

Discount campaigns require recalculating break-even at the discounted economics. Example: standard pricing $8K avg job × 35% margin = $2,800 gross profit per job. Discount campaign at $6.5K with the same $5,200 job cost = $1,300 gross profit per job (a 20% margin — the discount comes straight out of margin). With $5K of monthly ad + management cost, standard break-even is 1.79 jobs/mo; discount break-even is 3.85 jobs/mo. The discount needs more than twice as many booked jobs (+115%) to break even — so unless it drives far more volume, you're worse off. Three-way decision framework: (1) MODEL standard break-even; (2) MODEL discount break-even; (3) ESTIMATE the volume lift the discount needs to drive — if you can't realistically more than double bookings, the discount loses money. Discounts run without this maths can lose money for a quarter before anyone notices. Discounts can work, but only if you've math-tested the volume requirement first.

How do I read a break-even result that says I need 4-5 booked jobs/mo when I'm only currently doing 2/mo — should I just quit?

Don't quit; diagnose. If break-even shows 4-5 jobs/mo and you're at 2/mo, there are three likely explanations: (1) AD SPEND too low — a budget that small rarely generates enough leads to judge or optimise, so the fixed management fee dominates; (2) AD + MANAGEMENT COST too high for the volume — check whether the fee or a fragmented ad budget is out of proportion to what your market can deliver; (3) PRICE or MARGIN too low — if your jobs are priced below your market, each one covers less of the cost, and a price rise lowers break-even directly. Pick the most fixable of the three. Below break-even, 'sell more' is the instinct, but fixing cost or price is often easier. Run the diagnostic before concluding the channel is broken.

How does break-even change as the business grows from solo-operator to 5-employee team to 20-employee team?

Each team-size threshold means recalculating the business-level break-even (the separate overhead calculation above: monthly fixed cost ÷ gross profit per job) at the new fixed-cost structure. Three growth-stage thresholds, with illustrative figures assuming a $5K average job at 35% margin ($1,750 gross profit per job): (1) SOLO — fixed costs of $2-5K/mo means breaking even at roughly 1-3 booked jobs a month; (2) SMALL TEAM (3-7 employees) — fixed costs of $25-50K/mo means roughly 14-29 jobs a month; (3) LARGER TEAM (10-20 employees) — fixed costs of $80-150K/mo means roughly 46-86 jobs a month, unless larger teams also raise average job value, which they usually need to. The big jump comes with the first hires, when overhead rises faster than productive capacity. Operations efficiency matters more than growth speed at this scale. Recalculate at each transition point and plan your hiring against those thresholds. Contractors who hire reactively, once they're swamped, often skip recalculating break-even at the new fixed cost and lose money for a few months while revenue catches up to overhead.