{ "$schema": "https://soudcoh.com/tools/data/index.json", "slug": "break-even-roas-calculator", "name": "Break-even ROAS and max cost per lead", "category": "Cost per lead", "url": "https://soudcoh.com/tools/break-even-roas-calculator", "dataUrl": "https://soudcoh.com/tools/data/break-even-roas-calculator.json", "currency": "AUD", "updated": "2026-08", "summary": "Work out the most you can afford to pay for a lead, your break-even return on ad spend, and how much profit is left per job at your current cost per lead. Australian dollars, your own numbers.", "whatItDoes": [ "Works out the gross profit sitting behind one enquiry, which is the true ceiling on what an enquiry can cost.", "Gives you the break-even return on ad spend — the revenue every advertising dollar has to bring back before the campaign is merely paying for itself.", "Then shows what your current cost per lead leaves on the table, per lead and per month." ], "howToUse": [ "Enter the average value of a job, before GST and before materials are deducted.", "Enter your gross margin on that job. Gross margin is what is left after labour and materials, not after rent and insurance.", "Enter the share of enquiries that turn into paid work. Count from your own records, not from memory — almost everyone overestimates this one.", "Enter what you are paying for a lead now, then read the headroom figure." ], "formula": [ "Gross profit per job = job value × gross margin", "Gross profit per lead = gross profit per job × lead-to-job rate", "Maximum cost per lead = gross profit per lead (at break-even, nothing left over)", "Break-even ROAS = 1 ÷ gross margin" ], "interpret": [ "The maximum cost per lead is a ceiling, not a target. Paying exactly that means the campaign washes its face and pays you nothing for the risk.", "Most businesses want to spend somewhere between a third and a half of the ceiling, so the account funds itself and still leaves a margin. That is a commercial choice, not a rule from any dataset.", "If your current cost per lead is above the ceiling, you are buying work at a loss. Raising the close rate usually moves the ceiling faster than cutting the cost of the click does." ], "limitation": "This is a single-job calculation. It ignores repeat work and referrals, which is why a business with strong retention can afford far more per lead than this suggests. Run the lifetime value tool afterwards if your customers come back.", "inputs": [ { "key": "jobValue", "label": "Average job value", "kind": "currency", "default": 1000, "min": 1, "max": 10000000, "unit": "AUD", "help": "Your average invoice, excluding GST. A round placeholder — replace it with your own figure.", "sourceId": null, "sourceNote": null, "options": null }, { "key": "margin", "label": "Gross margin", "kind": "percent", "default": 40, "min": 1, "max": 100, "unit": "percent", "help": "What is left after labour and materials, as a percentage of the invoice. Not net profit.", "sourceId": null, "sourceNote": null, "options": null }, { "key": "closeRate", "label": "Leads that become paid work", "kind": "percent", "default": 30, "min": 0.1, "max": 100, "unit": "percent", "help": "Out of every hundred enquiries, how many end in an invoice. Count it from your job book.", "sourceId": null, "sourceNote": null, "options": null }, { "key": "currentCpl", "label": "What you pay per lead now", "kind": "currency", "default": 90, "min": 0, "max": 100000, "unit": "AUD", "help": "From your ad account, or from the cost per lead calculator.", "sourceId": null, "sourceNote": null, "options": null }, { "key": "leadsPerMonth", "label": "Leads per month", "kind": "number", "default": 40, "min": 0, "max": 1000000, "unit": "count", "help": "Used only to scale the headroom into a monthly figure.", "sourceId": null, "sourceNote": null, "options": null } ], "defaults": { "jobValue": 1000, "margin": 40, "closeRate": 30, "currentCpl": 90, "leadsPerMonth": 40 }, "exampleResult": { "headline": { "label": "Most you can pay for a lead", "value": "$120.00", "note": "At break-even. Anything above this loses money on the first job." }, "outputs": [ { "label": "Break-even ROAS", "value": "2.50×", "note": "Revenue needed per dollar of ad spend" }, { "label": "Your ROAS today", "value": "3.33×", "note": "$300.00 of revenue per $90.00 lead" }, { "label": "Gross profit per job", "value": "$400.00", "note": "40% of $1,000.00" }, { "label": "Headroom per lead", "value": "$30.00", "note": "Left over after paying for the enquiry" }, { "label": "Headroom per month", "value": "$1,200.00", "note": "Across 40 leads" } ], "workings": [ { "label": "Gross profit per job", "expression": "$1,000.00 × 40% = $400.00" }, { "label": "Gross profit per lead", "expression": "$400.00 × 30% = $120.00" }, { "label": "Break-even ROAS", "expression": "1 ÷ 40% = 2.50×" }, { "label": "Headroom per lead", "expression": "$120.00 − $90.00 = $30.00" }, { "label": "Maximum monthly spend at break-even", "expression": "$120.00 × 40 leads = $4,800.00" } ] }, "shareableExample": "https://soudcoh.com/tools/break-even-roas-calculator?jobValue=1000&margin=40&closeRate=30", "faqs": [ { "question": "What is a break-even ROAS?", "answer": "It is the return on ad spend at which the revenue you buy exactly covers the cost of delivering the work plus the cost of the advertising. The arithmetic is one divided by your gross margin: at a 40% gross margin, break-even ROAS is 2.5, so every dollar of ad spend has to bring back $2.50 of revenue before you are ahead. At a 25% margin it rises to 4. Margin, not spend, is what sets the bar." }, { "question": "What is the maximum I should pay for a lead?", "answer": "The absolute ceiling is the gross profit sitting behind one enquiry: job value, times gross margin, times the share of enquiries that become work. A $1,000 job at 40% margin closing 30% of the time carries $120 of gross profit per enquiry, so $120 is the point at which the campaign stops contributing. Most businesses aim somewhere between a third and a half of that ceiling so the work still pays them. That split is a commercial preference, not a figure from any dataset, and we are not going to dress it up as one." }, { "question": "Should I use gross margin or net margin?", "answer": "Gross margin — what is left after the labour and materials on that specific job. Net margin subtracts rent, insurance, vehicles and admin, which you pay whether or not the job exists. Using net margin here makes the ceiling look far lower than it is and talks businesses out of advertising that is actually working." }, { "question": "My cost per lead is above the ceiling. Do I stop advertising?", "answer": "Not immediately. Check the close rate first, because it is the multiplier on the whole sum and it is the number people guess at most. A move from 20% to 30% raises the ceiling by half. After that, look at what people actually searched before they clicked: in the accounts we run, the gap between an affordable and an unaffordable cost per lead is usually made of searches that were never going to become a job." }, { "question": "Does this account for repeat customers?", "answer": "No, deliberately. This tool values one job. If your customers come back — maintenance contracts, service plans, a plumber people keep the number for — the real ceiling is higher, and the lifetime value calculator is the one that shows it. We have kept the two separate because a break-even figure inflated by an assumed repeat rate is how businesses end up overspending for a year before anyone checks whether the repeats arrived." } ], "sources": [], "relatedTools": [ "https://soudcoh.com/tools/cost-per-lead-calculator", "https://soudcoh.com/tools/customer-lifetime-value-calculator", "https://soudcoh.com/tools/cost-per-booked-job-calculator" ], "licence": { "terms": "Free to reuse with attribution to SoudCoh and a link to the page it came from. Third-party figures remain the property of the publisher named on each row and must keep their market and year attached.", "attribution": "SoudCoh — https://soudcoh.com/tools" } }