Marawood Construction Accounting
Financial Planning Tool All Tools

Breakeven Revenue Calculator

Every contractor has a number they must hit before they make a single dollar of profit. Most don't know what it is. This tool calculates it — and shows you what happens to that number when your margins or overhead change.

The most important number most contractors have never calculated. Your breakeven revenue is the minimum you must generate in a year just to cover your overhead — before a single dollar flows to profit. Below it, you are losing money no matter how busy you are. Above it, every additional dollar of gross profit goes straight to the bottom line. Knowing this number changes how you think about every bid you write.
The formula is simple. The implications are not.

Breakeven Revenue = Total Annual Overhead ÷ Gross Margin %

A contractor with $800,000 in overhead and a 20% gross margin needs $4,000,000 in revenue just to break even. The same contractor at 18% margin needs $4,444,000 — a two-point margin drop adds $444,000 to the breakeven. This is why pricing discipline matters so much: margin erosion doesn't just reduce profit, it raises the bar you have to clear before you make any profit at all.

Your Numbers

Annual Overhead Costs

Enter your fixed and semi-fixed overhead costs — expenses that exist whether you win one job or ten. Do not include direct job costs (labour, materials, subcontractors).

$
$
$
$
$
$
$
$
$
Total Annual Overhead $500,000
Revenue & Margin
$
20.0%
Use your actual trailing 12-month gross margin. Gross margin = (Revenue − Direct Job Costs) ÷ Revenue.
$
Overhead Recovery Rate
—
—
Overhead recovery rate is your overhead as a percentage of revenue. It tells you how many cents of every revenue dollar go to keeping the lights on — before a single cent of profit. Your gross margin must exceed your overhead rate to make a profit.
Breakeven in Jobs

Abstract revenue targets become real when you think about them in jobs. At your average job size, here is what breakeven means in concrete terms.

Jobs to Break Even
—
Jobs at Current Revenue
—
—

Your Breakeven Position

Breakeven Revenue
—
minimum annual revenue to cover overhead
Margin of Safety
—
—
Revenue Gap / Surplus
—
above / below breakeven

Where You Stand

Breakeven
$0 — —
—

Sensitivity Analysis — How Breakeven Shifts

If Gross Margin Changes
If Overhead Changes
How to read this: The highlighted row is your current position. Each row above and below shows how your breakeven changes with a different margin or overhead level — and whether your current revenue still covers it. Red = current revenue below breakeven at that scenario. Green = current revenue above breakeven.

Sensitivity Chart — Margin vs. Breakeven

The curved line shows how your breakeven revenue rises as gross margin falls — notice how it accelerates steeply at lower margins. The flat line is your current revenue. Where the two lines cross is the margin level at which your business tips below breakeven.

Breakeven Revenue (by margin %)
Your Current Revenue
Profit Zone
Loss Zone
Adjust Gross Margin 20.0%

Assessment

Enter your numbers above to see your assessment

Fill in your overhead costs and margin above to see a plain-language assessment of your breakeven position.

Next Steps — Marawood Construction Accounting
Now you know the number — let's make sure you're building toward it
Breakeven is the floor. Profit is the goal.

Knowing your breakeven is the first step. Building the overhead structure, pricing strategy, and job costing system that gets you above it — and keeps you there — is what Marawood does. Book a free 30-minute call and we will walk through your numbers together.

Free 30-minute session No obligation Specific to your business
Book a Free Session

Or call 403-803-5907