You do not cover overhead with revenue.
You cover it with gross profit, and that is a much smaller number. A builder doing a million dollars at 24% is not bringing home a million dollars worth of anything — he has $240,000 of gross profit to run the whole company on. Break-even is that arithmetic, run backwards.
Rent, trucks, insurance, admin pay, software — everything not charged to a job.
Contract price minus direct job cost, as a percent of price.
Your work
Every job up to the break-even point pays the rent. Nothing before it pays you.
Why margin moves this more than volume does
| Gross margin | Revenue needed to cover $240,000 | Jobs at $85,000 |
|---|---|---|
| 18% | $1,333,333 | 15.7 |
| 21% | $1,142,857 | 13.4 |
| 24% | $1,000,000 | 11.8 |
| 28% | $857,143 | 10.1 |
| 32% | $750,000 | 8.8 |
Six points of margin is worth more than half a million in revenue here, and it does not require hiring anybody, buying a truck, or finding more work. That is the whole argument for pricing discipline: the cheapest revenue you will ever add is the margin you are already leaving on the table.
One caution. This assumes overhead holds steady as volume changes. It usually does not — past a point you need another PM, another truck, more insurance. When overhead steps up, break-even steps up with it, which is why growth so often feels like running to stand still.
Do this at scale
Break-even only works if the margin number is real.
Most builders are estimating margin, not measuring it. These two turn it into something you actually know.
Job Costing & WIP Tracker
Committed and actual cost against the estimate, phase by phase, with a WIP schedule that shows where each job really sits.
Company Cash Flow Report
True cash position across jobs and months, so a profitable year on paper does not turn into a cash problem in March.
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