How many jobs before you're working for yourself?
The first jobs every month pay the bills that come no matter what. Put in your fixed costs, your average job price and what an average job costs to do, and see the job count where you start making money.
If the first line is $0 or less, the price doesn't cover the job's own costs and no number of jobs gets you to break even. Redline's Home dashboard tracks jobs done and money collected against your monthly goal.
Try Redline freeHow the math works
Each job leaves something after its own costs: the price minus the materials, job labor, dump fees and card fees that only happen because the job happened. That leftover is what pays your fixed costs. Divide monthly fixed costs by it and you get the number of jobs that covers them. Round up, because nobody gets paid for 0.6 of a job.
Break-even revenue is the same answer in dollars: fixed costs divided by the share of each job's price that's left over. The last line takes the jobs you expect this month and shows the profit (or loss) at that count.
If the price doesn't cover the job's own costs, the leftover is zero or negative and there is no break-even. More jobs at that price only lose more money. The calculator shows 0 jobs in that case; fix the price first.
Worked example
Monthly fixed costs of $8,000 and an average cost per job of $700, at three average job prices:
| Average job price | Left per job | Break-even jobs | Break-even revenue | Profit at 20 jobs |
|---|---|---|---|---|
| $1,000 | $300 | 27 (26.7) | $26,667 | $2,000 loss |
| $1,200 | $500 | 16 | $19,200 | $2,000 |
| $1,500 | $800 | 10 | $15,000 | $8,000 |
Example figures to show the math, not benchmarks. Use your own averages.
What to watch for
- Fixed and variable have to be split cleanly. Truck payment and insurance are fixed. Fuel is mostly variable. Your own base pay is fixed if you take it every month.
- Averages hide the mix. A month of small service calls and a month of two big installs can have the same average and very different results. Run your main job types separately.
- Seasonal trades should look at the year, not the month. Twelve months of fixed costs have to be covered by the months you can work.
- Raising price moves break-even far more than cutting costs on small items. In the table, $200 more per job takes the count from 27 jobs to 16.
- Break-even means you've covered the bills. Profit starts on the next job.
Questions contractors ask
Where do I get the average job price?
From last year's invoices: total revenue divided by the number of jobs. If you take very different kinds of work, split them and run each kind.
Is labor fixed or variable?
Crew paid only for hours worked on jobs is variable. Salaried staff, or a crew you pay through slow weeks, is fixed. Put each person where their pay actually behaves.
How does Redline help me keep track?
Redline's Home dashboard has a monthly goal ring, a jobs done ring and a collected-this-month gauge against your target, and it shows money sitting in the pipeline (sold but not scheduled, done but not invoiced, overdue). Ask "what did I collect this month?" in the chat for the number. The dashboard works on every plan and counts jobs you move to Paid as collected; the chat's collected and overdue figures come from invoicing, which is on Solo ($29 a month).
Related
Keep reading
- Overhead rate calculatorOverhead as a share of revenue, per billable hour and as a markup on job cost.
- Job profit calculatorSee what a job really makes after materials, labor and overhead.
- Hourly rate calculatorTurn pay, overhead and billable hours into the rate you should charge.
- Redline RPMsWhere the money is sitting on Home, and the next move from the chat.