Break-even is the revenue at which the business covers everything and keeps nothing. Below it you are losing money; above it you are making it.
Most owners have never calculated theirs, and most who do are surprised by how high it is.
How it works
Take your monthly overhead — everything that continues whether or not you sell anything. Divide it by your gross margin as a decimal.
Twelve thousand a month of overhead at a 40% gross margin needs thirty thousand of revenue to break even.
That is the number to know. Not the overhead, not the margin — the revenue figure that clears both.
Why it changes how you think about a quiet month
A month at twenty-eight thousand in that example is not "a bit down". It lost money, and it lost it while everybody was busy.
Knowing the figure turns a vague feeling about a slow period into something you can act on in week two rather than discovering in the accounts six weeks later.
The daily version is more useful
Divide it by working days and you get what the business has to bill each day to stand still.
That number is the one worth having in your head, because it makes every decision comparable. A day lost to a callback, a van off the road, a technician on holiday — each has a cost you can now name.
What raises it
Overhead, silently. Every subscription, every vehicle, every hire raises the break-even point and none of them announce it.
That is the argument for reviewing overhead against this number rather than in isolation: a cost is not "only two hundred a month", it is five hundred of revenue you now have to find every month, forever.