MarginWorksBusiness Economics
Owner Income to Required Revenue
What the business needs to bring in this year so overhead is covered and you actually pay yourself the income you want.
Required revenue$171,428.57 / year
Monthly$14,285.71
Weekly$3,296.7
Beyond break-even$0
Required revenue at other income targets
| Scenario | Owner income | Required revenue |
|---|---|---|
| -25% income | $0 | $171,428.57 |
| -10% income | $0 | $171,428.57 |
| Your target | $0 | $171,428.57 |
| +10% income | $0 | $171,428.57 |
| +25% income | $0 | $171,428.57 |
Methodology
Formula: required revenue = (annual overhead + desired owner income) / average gross margin. This is break-even revenue plus what's needed on top to actually pay the owner.
Assumption: gross margin is your average across all jobs before overhead, the same non-persisted assumption used in Overhead Allocation & Break-Even Revenue.
Limitation: a single blended margin assumption across the whole business, doesn't account for a mix of very different job types with very different margins.