You're a freelance marketing consultant. How many hours must you bill just to break even?

Your Fixed Costs (Monthly)

Software subscriptions:

• Adobe Creative Cloud: £55
• Project management: £12
• Email marketing: £20
• Accounting software: £15
• Subtotal: £102

Business expenses:

• Professional insurance: £85/month
• Coworking space: £250
• Phone/internet: £45
• Website hosting: £20
• Subtotal: £400

Personal minimum (bills you MUST pay):

• Rent: £800
• Food: £300
• Transport: £100
• Emergency fund contribution: £100
• Subtotal: £1,300

Total fixed costs: £1,802 (let's round to £1,800)

Variable Costs Per Hour

Per billable hour:

• Client meeting tools (Zoom Pro, etc.): £2
• Learning/development (courses, books): £2
• Misc (coffee meetings, transport to client): £1
• Total: £5 per billable hour

Your Rate

Hourly rate: £80

Running the Calculation

Contribution per hour: £80 - £5 = £75

Break-even point: £1,800 ÷ £75 = 24 billable hours per month

What That Means

Per week: 24 ÷ 4 = 6 billable hours

That's incredibly low! Only 6 hours of client work per week to survive.

But here's the catch...

The Reality of Billable Hours

If you work 40 hours per week, how many are actually billable?

Typical breakdown:

• Client work (billable): 20 hours (50%)
• Proposals, quotes: 5 hours
• Admin, invoicing: 3 hours
• Marketing, networking: 8 hours
• Learning, development: 4 hours

So you're working 40 hours but billing 20.

Recalculating Break-Even

If only 50% of your time is billable, you need to work 48 hours per week to bill 24 hours per week.

That's 48 hours of work just to break even. Every hour over that is profit.

To make £3,000/month profit:

• Need: £1,800 (fixed) + £3,000 (profit) = £4,800
• Billable hours needed: £4,800 ÷ £75 = 64 hours
• Actual hours worked: 128 hours (assuming 50% billable)
• That's 32 hours per week worked

More realistic!

Improving Your Position

Option 1: Raise Rate to £100

• New contribution: £95/hour
• New break-even: 19 hours billed (38 hours worked)
• Profit at 64 billed hours: £6,080 - £1,800 = £4,280

Option 2: Cut Fixed Costs to £1,200

• Move to cheaper flat: -£400/month
• Work from home: -£250/month
• New break-even: 16 hours billed (32 hours worked)

Option 3: Increase Billable %

• Better systems, fewer meetings
• Increase to 60% billable
• 24 hours billed = 40 hours worked (normal full-time)

The Lesson

Your break-even looks low (24 hours), but when you factor in non-billable time, you're actually working 48+ hours to hit it. That's why freelance rates need to be 2-3× employee hourly equivalents.

Use the calculator to model your real costs and see your true break-even.