Home▸Financial Models & Markets▸Small Business Cost Model — Cash Flow & Break-Even

💹 Small Business Cost Model — Cash Flow & Break-Even

Project a UK small business's cumulative cash flow month by month: starting capital, fixed costs, variable costs as a percentage of revenue, and monthly revenue growth, with the break-even month marked.

Financial Models & Markets3DEasy60 FPS

The Model

Monthly profit = monthly revenue − (fixed costs + monthly revenue × variable cost %). Cumulative cash flow adds each month's profit onto the running balance, starting from your entered starting capital, while monthly revenue compounds at the chosen growth rate — the same shape as an early-stage business gradually acquiring customers.

Fixed vs Variable Costs

Fixed costs (rent, salaries, software, insurance) are paid every month regardless of how much revenue comes in. Variable costs (materials, packaging, payment processing, commissions) scale directly with revenue as a percentage. Together, fixed + variable costs form the total cost the business must cover before turning a profit.

Reading the Break-Even Month

The break-even month is the first month the cumulative cash balance crosses from negative back to zero or above — the point at which accumulated profit has repaid the initial capital drawdown. Real UK startup costs commonly range from roughly £1,500 for a lean sole-trader setup to £12,000+ for a limited company with branding, a built website and part-time staff, all of which shows up here as the starting capital and fixed-cost inputs.

About this simulation

This simulation projects a small UK business's cash position month by month: starting capital is drawn down or built up by monthly profit, computed as revenue minus fixed costs and a variable cost percentage of revenue, while revenue itself compounds at a chosen monthly growth rate — the classic trajectory of an early-stage business finding its feet.

🔬 What it shows

A cumulative cash-flow line over your chosen number of months, shaded green wherever the balance is positive and red wherever it dips below zero, with a pulsing marker at the break-even month — the point where accumulated profit first pays back the initial capital drawdown.

🎮 How to use

Set starting capital, fixed monthly costs, variable cost percentage, starting monthly revenue and its monthly growth rate, then extend or shorten the projection window to see whether — and when — the business becomes cash-flow positive within your chosen timeframe.

💡 Did you know?

Real UK startup costs commonly range from around £1,500-£4,000 for a lean sole-trader setup to £12,000+ once you add a limited company, professional branding, a built website and part-time staff — small changes to that starting-capital and fixed-cost input can shift the break-even month by many months.

Frequently asked questions

How is monthly profit calculated here?

Monthly profit = monthly revenue − (fixed costs + monthly revenue × variable cost percentage). Fixed costs are paid every month regardless of revenue; variable costs scale directly with revenue, representing things like materials, packaging or payment-processing fees.

What does the break-even month actually mean?

It is the first month in which the cumulative cash balance — starting capital plus all profits and losses since — crosses back to zero or above after having gone negative. It marks the point where the business has earned back its initial capital outlay, not simply the point where monthly profit turns positive.

Why does revenue grow every month instead of staying flat?

The model compounds monthly revenue by a fixed growth percentage, mirroring how an early-stage business typically acquires customers gradually rather than launching at full scale — a more realistic shape than assuming constant revenue from day one.

What if the cash-flow line never crosses back above zero?

That means, at the given fixed costs, variable cost percentage, starting revenue and growth rate, the business does not recover its starting capital within the projected number of months — the stat panel reports the break-even month as "not reached" in that case.

How much does it typically cost to start a small UK business?

Estimates vary widely by structure and ambition: a bare-bones sole-trader setup with minimal marketing can be £1,500-£4,000, a limited company with some software and marketing spend often lands at £4,000-£12,000, and a fuller launch with comprehensive branding, a custom website and staffing can exceed £12,000.

⚙ Under the hood

Three.jssmall businesscash flowstartup costsbreak-even month

3D · Three.js / WebGL renderer · 60 FPS target · runs fully client-side, no install