Agency Break-Even Calculator

An agency has fixed costs that arrive whether or not anything completes — premises, salaries, software, portal subscriptions — and variable costs that arrive per deal. Break-even is the number of transactions where the contribution from each one finally covers the fixed base.

It is the single most useful number for a small agency, because everything below it is a loss regardless of how busy the month felt.

The calculation

Contribution per deal = average fee − variable cost per deal. Break-even = fixed monthly costs ÷ contribution. To include a profit target, add it to the fixed costs before dividing.

Worked example

With 12,000 of fixed monthly costs, an average fee of 4,500 and 900 of variable cost per deal, each transaction contributes 3,600 — an 80% contribution margin. Break-even is 3.3 deals a month, and reaching an 8,000 monthly profit needs 5.6.

Watch the fee, not the volume

Because fixed costs are covered by contribution, a small change in average fee moves break-even sharply. Raising the average fee from 4,500 to 5,000 lifts contribution to 4,100 and drops break-even to 2.9 deals — the same result as winning half a deal more every month, without any extra work.

Frequently asked questions