Appliance Store Break-Even Analysis: About $194k/Month

Fixed costs $30.4K/mo Overhead plus payroll

Contribution margin 86.5% After variable costs

Break-even revenue $35.1K/mo Target sales volume

Break-even timing Month 22 Model hits breakeven

Break-even calculator

Use this calculator to see how monthly revenue, variable expenses, and fixed costs drive break-even for an appliance store.

Lean Base Full

Monthly revenue Higher sales give you more room to cover fixed costs. $ Low revenue High revenue Variable expenses These are the costs that rise with each sale, like commissions, marketing, warranties, and haul-away. $ Light costs Heavy costs

Money available to cover fixed costs $81,108 $93,767 revenue - $12,659 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base the store must cover before profit starts. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which appliance store expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful if fixed overhead stays below contribution after sales-linked costs. In this model, rent and core overhead sit still, while commissions, marketing, warranties, and haul-away move with appliance sales.

Expense	Cost	Break-Even Treatment	Common Mistake
Showroom Rent	Fixed	Use $8,000 per month from Month 1 through Month 60.	Spreading rent per unit and hiding the monthly hurdle.
Utilities	Fixed	Use $1,200 per month in the base overhead load.	Treating normal showroom utility spend as sales-linked.
Business Insurance	Fixed	Use $500 per month as recurring operating overhead.	Dropping required coverage from break-even overhead.
Store payroll	Semi-fixed	Model wages by planned full-time equivalent staffing steps by year.	Treating delivery and installation labor as free capacity.
Sales Commissions	Variable	Apply 6.0% of revenue in the first year.	Counting commission as fixed payroll and overstating margin.
Digital Marketing Campaigns	Variable	Apply 4.0% of revenue in the first year.	Adding a flat ad budget when the model uses sales percentage.
Cost of Extended Warranties	Variable	Apply 2.0% of revenue in the first year.	Booking warranty sales without the related warranty expense.
Haul-Away Service Costs	Variable	Apply 1.5% of revenue in the first year.	Ignoring disposal work when appliance volume rises.

How does break-even change across lean, base, and full appliance store formats?

Scenario table

Lean traffic can cover only part of the overhead, base gets close to break-even, and full format has the widest cushion. The main swing factors are traffic, conversion, and the mix of big-ticket appliances.

Planning assumptions only; actual results will move with traffic, staffing, and product mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean showroom ramp	$95k	$12.8k	$30.4k	86.5%	$52.2k	Still the most fragile case; a soft week can dent the cushion.
Base showroom plan	$200k	$24.4k	$36.0k	87.8%	$139.6k	Nearer break-even control; keep conversion and payroll tight.
Full showroom build	$358k	$39.0k	$40.0k	89.1%	$279.0k	Best cushion here; scale only if floor space and staff stay productive.

What breaks the break-even plan for this appliance store?

Stress test

The cushion is thin in Year 2. At about $200k a month, the plan only has about $12k of EBITDA, so a 10% sales dip, a 2-point margin slip, or a 10% fixed-cost bump can flip it negative fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$188,000	$12,000 cushion	Base case sits only a little above break-even.
Revenue shortfall	Monthly revenue falls 10% to about $180,000.	$205,000	$25,000 gap	A small traffic drop turns into a monthly loss.
Fixed-cost pressure	Fixed costs rise 10% to about $396,000.	$224,000	$24,000 gap	Rent, payroll, or overhead growth eats the cushion.
Margin pressure	Contribution margin falls 2 percentage points at $200,000 revenue.	$228,000	$28,000 gap	Higher commissions, freight, or warranty drag hurts fast.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and margin slips 2 points.	$297,000	$97,000 gap	Weaker weekend traffic, sub-55% conversion, higher commissions, freight pressure, warranty drag, and slow installer capacity can wipe out the cushion.

What should you verify before signing the lease and placing the first appliance order?

Founder checklist

Don’t sign the lease or place big inventory orders until the traffic, staffing, and cash plan can support Month 22 break-even. Year 1 traffic is 390 visitors a week, monthly payroll plus fixed overhead is about $30.4K, and minimum cash bottoms at $506K in Month 24.

1Launch Demand390/wk

Check that Year 1 traffic can really reach 390 visitors a week at 4.0% conversion, because that is the opening demand base the store needs.

2Lease Load$8K/mo

Sign the showroom lease only if the $8,000 monthly rent still fits inside the $11,200 fixed overhead and leaves room for payroll and slow sales months.

3Contribution Margin86.5%

The visible non-inventory load is 13.5% of sales in Year 1, so 86.5% is left before payroll and rent; confirm supplier quotes before you trust the spread.

4Staff Ramp4.5 FTE

Year 1 staffing is 4.5 FTE across the manager, two sales associates, one delivery tech, and half a customer service role, so hire only as traffic proves the ramp.

5Cash Cushion$506K

Plan for the cash trough, not just opening spend, because minimum cash lands at $506,000 in Month 24 and Year 1 EBITDA is still negative at $189,000.

6Startup Spend$220K

Confirm supplier terms and delivery capacity before promotions, because startup purchases total $220,000 across build-out, display appliances, the vehicle, tools, POS hardware, furniture, security, and the website.