Signal · Owner

Break-even billable days

The number of billable days per month you need at your average day rate to cover fixed costs (overheads + payroll + drawings).

Owner

What the signal measures

The number of billable days per month you need at your average day rate to cover fixed costs (overheads + payroll + drawings).

Why it matters

For a service business, the single most useful management number is "how many billable days at my average day rate do I need this month to cover fixed costs?" Everything above that number is profit; everything below is a loss. Compass computes the number from your posted fixed costs (overheads + payroll + drawings baseline) divided by your average realised day rate.

How to act on it

Print it on the wall. Every quote becomes a "does this move me closer to or past break-even for the month?" decision. If the break-even days-per-month number is higher than what your team can realistically deliver, the drafted action is a fixed-cost review or a rate rise — whichever is lower-friction.

Worked example — fixture consultancy

On the fixture, Meridian's combined fixed costs (rent + software + subcontractors + drawings) divided by the average realised day rate produce a break-even figure of somewhere around 12-14 billable days per month. That number, more than any P&L, tells you whether next month is a good month or a bad one.