ROAS & Break-Even Cost Per Lead Calculator
Work out return on ad spend, break-even ROAS and the most you can pay for a lead before ads start losing money. Useful for anyone buying leads or running paid search for a service business.
Free, no sign-up. Runs in your browser; nothing you type is stored unless you choose to email yourself the results.
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Three steps, about a minute
Step 1
Enter your Average job value and Gross margin after materials and field labor.
Step 2
Set Leads that become jobs, your Monthly ad spend and the Cost per lead you pay.
Step 3
Compare your ROAS with the break-even ROAS, and your cost per lead with the break-even figure.
How the roas calculator works
Leads = monthly ad spend ÷ cost per lead, booked jobs = leads × the percent that become jobs, and revenue = jobs × average job value. ROAS is revenue ÷ ad spend. Break-even ROAS = 1 ÷ gross margin: at a 45% margin you need $2.22 of revenue per ad dollar just for gross profit to cover the ads. Break-even cost per lead = job value × margin × close rate, the most a lead can cost before it loses money. The example ($1,200 job, 45% margin, 30% close, $2,000 spend, $60 leads) shows about 33 leads, 10 jobs, $12,000 revenue, 6.0x ROAS, a $162 break-even lead cost and $3,400 gross profit after ads. Gross margin here means revenue minus direct job costs, before overhead such as rent, office staff and vehicles.
| Average job value | $1,200 |
|---|---|
| Gross margin | 45% |
| Leads that become jobs | 30% |
| Monthly ad spend | $2,000 |
| Cost per lead | $60 |
| Leads per month | 33.3 |
|---|---|
| Booked jobs | 10 |
| Revenue from ads | $12,000 |
| ROAS (revenue ÷ ad spend) | 6x |
| Break-even ROAS | 2.22x |
| Break-even cost per lead | $162 |
| Gross profit after ad spend | $3,400 |
Break-even ROAS = 1 ÷ gross margin. Break-even cost per lead = job value × margin × close rate. Spend below that line and every lead makes money.
Using the numbers like a pro: tips for local service businesses
Use gross margin, not markup. A 50% markup on cost is only about a 33% margin, and mixing the two up makes break-even look easier to reach than it is.
Judge each lead source against its own break-even cost per lead. A channel with pricier leads can still come out ahead if those leads close at a higher rate.
Revenue only counts if you can trace it. Tag jobs in your CRM by lead source, so ROAS comes from booked invoices rather than from what an ad platform estimates.
Want us to do this for you?
Know your break-even cost per lead before you sign up with any lead source. When a platform quotes a price per lead, you can compare it with that ceiling in seconds. Then track booked revenue by source each month and rerun the numbers, so budget moves toward channels that clear the line and away from those that do not.
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ROAS & Break-Even Cost Per Lead Calculator questions
What is a good ROAS for a service business?
A good ROAS is any figure comfortably above your break-even ROAS, which is 1 ÷ gross margin. At a 45% margin, break-even is about 2.2x, so 6x leaves room for overhead and profit. At a 25% margin, break-even is 4x. That is why one business can do well at 3x while another loses money there.
How do you calculate break-even cost per lead?
Multiply average job value by gross margin and by your close rate. A $1,200 job at a 45% margin with 30% of leads closing gives $1,200 × 0.45 × 0.30 = $162. Pay less than that per lead and each lead adds gross profit on average. Pay more and you lose money before overhead.
What is the difference between ROAS and ROI?
ROAS compares revenue with ad spend only: $12,000 in revenue from $2,000 in ads is 6x. ROI looks at profit after all costs, including materials, labor and the ads themselves. A campaign can post a high ROAS and still lose money when margins are thin, which is why this tool also shows gross profit after ad spend.
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