MarginWorksOverhead Allocation & Break-Even Revenue
Spread your annual overhead across billable hours, and see the revenue floor you need just to break even, before any owner profit.
Break-even revenue at other gross margins
| Margin scenario | Break-even revenue |
|---|---|
| Thin (25%) | $240,000 |
| Below average (30%) | $200,000 |
| Typical (35%) | $171,428.57 |
| Above average (40%) | $150,000 |
| Strong (45%) | $133,333.33 |
Next Decision
Based on your results, these related decisions are available.
- Crew Cost & Required Billable RateUse your real overhead-per-hour instead of leaving it at zero.
- Job Profit CheckUse your real overhead-per-hour instead of leaving it at zero.
- Owner Income to Required RevenueSee what revenue you need beyond break-even to actually pay yourself.
- HVAC Billable Technician Rate & Dispatch RadiusUse your real overhead-per-hour instead of leaving it at zero.
Methodology
Formula: overhead per hour = annual overhead / billable hours per year. Break-even revenue = annual overhead / average gross margin. This is the revenue level at which gross profit dollars exactly cover overhead, zero net profit.
Assumption: "gross margin" here means your average margin across all jobs before overhead is subtracted, a different number from the per-job target margin used in the pricing engines. Confirm your own average rather than relying on the default.
Limitation: this is zero-profit break-even only. See Owner Income to Required Revenue for the revenue needed to actually pay yourself on top of break-even.