Aluminum Can Recycling Center Break-Even: About $94K Monthly

Fixed costs $30.2K/mo Monthly overhead base

Contribution margin 85.6% After variable costs

Break-even revenue $35.3K/mo Coverage target

Break-even timing Month 1 Launch month

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for an aluminum can recycling center.

Lean Base Full

Monthly revenue Revenue sets the margin pool that covers fixed costs. $ Low sales High sales Variable expenses These rise with output, freight, and direct processing costs. $ Low cost High cost

Money available to cover fixed costs $3,262,616 $3,880,833 revenue - $618,217 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base break-even has to cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which recycling center expenses are fixed, and which move with sales?

Cost classification

Break-even gets reliable when $30,200 in monthly fixed overhead is kept separate from costs that rise with bale volume and revenue. If those buckets blur, Month 1 break-even can look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Lease	Fixed	Hold at $18,000 per month across the planning range.	Spreading lease by bale and hiding the monthly hurdle.
Equipment Insurance	Fixed	Hold at $3,500 per month before contribution margin.	Treating insurance as if it falls when production slows.
Raw Material Sourcing	Variable	Apply per unit by product, from $140 to $170 per unit.	Using one blended rate across all processed aluminum outputs.
Outbound Freight	Variable	Apply as a sales-linked charge, starting at 4.0% of revenue.	Budgeting freight as a flat monthly line.
Sales Commissions	Variable	Apply at 1.0% of revenue when sales are made.	Counting commissions before testing customer and volume mix.
Facility Energy	Semi-variable	Model as plant usage load, shown at 3.0% of revenue.	Calling all power fixed even when shifts and throughput rise.
Equipment Maintenance	Semi-variable	Model as usage-linked upkeep, shown at 1.0% of revenue.	Ignoring wear from shredding, sorting, and baling volume.
Salaried Plant Roles	Semi-fixed	Step staffing as capacity grows, not with each bale sold.	Scaling salaries smoothly with revenue instead of headcount steps.

How does break-even change from a lean launch case to full capacity?

Scenario table

Higher output lifts monthly revenue faster than fixed costs rise, so the break-even cushion widens from Year 1 to Year 5. The business stays profitable in all three cases, but the lean case has the thinnest margin of safety.

Planning cases only; actual break-even will move with input mix, freight, and staffing ramp.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Year 1 lean launch	$1.98M	$450.2k	$72.3k	77.3%	$1.46M	Covered, but this is the tightest cushion.
Year 3 ramp case	$3.88M	$598.1k	$92.4k	84.6%	$3.19M	Break-even coverage improves as fixed costs spread over more volume.
Year 5 full capacity	$5.95M	$909.9k	$112.5k	84.7%	$4.93M	Strongest cushion; added volume outpaces the larger staff base.

What breaks the break-even plan if can prices drop or hauling costs rise?

Stress test

The current plan clears break-even by about $1.05M a month. The main threats are lower can prices, weaker collection volume, freight spikes, contamination losses, and underused labor; a $10K monthly fixed-cost bump adds about $129K to break-even revenue.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$935K	$1.05M cushion	Strong cushion at Year 1 run rate.
Revenue shortfall	Monthly revenue falls by $1.05M to the break-even line.	$935K	$0 cushion	Any extra slip turns coverage negative.
Fixed-cost pressure	Monthly fixed costs rise by $10K.	$1.06M	$919K cushion	Lease, labor, or compliance hikes hit fast.
Margin pressure	Outbound freight rises from 4.0% to 5.0% of revenue.	$1.07M	$909K cushion	Hauling spikes eat cushion, but coverage remains.
Combined pressure	Revenue falls to $935K, freight rises 1 point, and fixed costs rise $10K.	$1.22M	$287K gap	This is the first case that slips below coverage.

What must you prove before signing the lease and buying the recycling line?

Founder checklist

Treat the lease and equipment buy as a go-no-go only after the feed, buyer mix, price, and cash floor all hold. The model only works if Year 1 turns 10,000 units into $23.8M of revenue at a $2,380 blended price while preserving the $983K opening cash floor.

1Inbound flow10,000 units

Verify the inbound stream can feed the full Year 1 output plan, or the line will sit underused and fixed costs will bite harder.

2Offtake mix$2,380/unit

Secure buyers for high purity bales, standard UBC bales, shredded aluminum, briquettes, and de-coated chips before launch, so the first-month sales mix matches the model.

3Lease load$18K/mo

Lock site economics before you sign the lease, because fixed costs and Year 1 payroll add up to about $72.3K a month before variable costs.

4Unit margin87% CM

Check that factory overhead, freight, and commissions stay near 13% of sales, since that leaves about 87% contribution before fixed costs.

5Throughput staff6 FTE

Hire only to the Year 1 throughput test and contamination controls, so labor grows with clean tons and not with hope.

6Cash floor$983K

Keep enough reserve to absorb the opening-month low point, and do not ramp spend until buyer offtake and outbound freight lanes are in place.