How many challenge sales do I need to cover my monthly costs?
Quick answer
Divide your monthly fixed costs by the contribution each sale makes after payment fees, commissions, platform cost and expected payouts. A firm with low fixed costs and a healthy contribution per sale needs far fewer sales. Lowering fixed costs is often easier than raising sales.
Detailed answer
Two levers change the answer:
- Fixed costs: staff, software subscriptions and monthly platform fees. Each $1,000 of monthly fixed cost needs more sales to cover it.
- Contribution per sale: price minus variable costs and expected payouts.
For example, a platform with a $2,500 monthly fee needs 50 more sales a month to cover it if each sale contributes $50. A one-time-payment platform removes that line entirely after the purchase.
Run the calculation for a weak month as well as an average one. If your break-even only works with your best-ever sales month, the plan is fragile. Keeping fixed costs small at the start, for example by paying for PropExecutor once rather than monthly, lowers the number of sales you need each month to stay afloat.
A worked example
Fixed costs of $3,000 a month and a contribution of $35 per sale mean about 86 sales a month to break even. Cutting $1,000 of fixed costs reduces that to about 58. Raising contribution to $45 reduces it to about 67.
Use the weak-month version
Plan around the sales of a slow month, not an average one.
PropExecutor team · Updated
Related questions
- How do I calculate the break-even point for a prop firm?
- Marketing and growthWhat commission should a prop firm pay affiliates?
- How do per-account fees compare with flat monthly platform fees?
- Business model and economicsHow should I price my challenges?
- Business model and economicsHow do I model prop firm revenue for the first year?