Break-Even Calculator

Fixed costs remain the same regardless of how many jobs you do: van finance/lease, insurance premiums, tool subscriptions, phone contracts, marketing spend, software, and accountancy retainers. These must be paid whether you work or not.

Variable costs change with each job: fuel for travel, materials purchased, waste disposal, and any per-job expenses. The more jobs you do, the higher your variable costs, but they only occur when you are working.

Contribution margin is your day rate minus variable costs per day. This is the amount each working day "contributes" towards covering your fixed costs. Once fixed costs are covered, the contribution becomes profit.

As a rule of thumb in cost-volume-profit analysis, a margin of safety of around 20-30% or more is generally considered healthy — it shows how far your billable days could fall before you stop breaking even. Below roughly 15% leaves little cushion, so one quiet week could put you in the red. The right level depends on your cost structure: a business with high fixed costs warrants a larger margin. These are guideline figures, not fixed rules.

Then your contribution per day is zero or negative — every job loses money once fuel and materials are paid — and there is no number of days at which you break even. The calculator shows "Never" and "N/A" rather than a misleading 0 days or 100% safety margin. To fix it, raise your day rate above your variable cost per day, or cut variable costs, so each day contributes something towards your fixed costs.

Either reduce fixed costs (cheaper van deal, shop around for insurance, cut unnecessary subscriptions), reduce variable costs (better fuel economy, less waste), or increase your day rate. Even small reductions across multiple categories add up significantly.