Biodiesel Manufacturing Break-Even Analysis: $129K/Month

Fixed costs $42.8K/mo Monthly base cost

Contribution margin 80.5% After variable costs

Break-even revenue $53.2K/mo Revenue to cover fixed

Break-even timing Month 1 Launch month

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed costs against the break-even point for biodiesel production.

Lean Base Full

Monthly revenue Revenue is the cash inflow that must cover variable and fixed costs. $ Low revenue High revenue Variable expenses Use feedstock, logistics, and commission costs that rise with output. $ Low spend High spend

Money available to cover fixed costs $2,861,231 $3,430,833 revenue - $569,602 variable expenses

Margin ratio

83%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly plant, payroll, rent, and admin cost base. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which biodiesel production expenses stay fixed, and which move with sales?

Cost classification

Break-even is only useful if costs are sorted by behavior. In this model, $41,800 per month stays fixed, while feedstock, commissions, inputs, utilities, staffing, QA, and compliance rise with output or capacity steps.

Expense	Cost	Break-Even Treatment	Common Mistake
Plant Lease & Property Tax at $25,000/month	Fixed	Include as monthly overhead from Month 1 through Month 60, regardless of gallons produced.	Spreading it per gallon and hiding idle-capacity risk when production drops.
Insurance Premiums at $5,000/month	Fixed	Keep as a recurring monthly charge in the break-even floor.	Reducing it when sales are slow even though coverage still runs.
Software Subscriptions & IT Support at $2,500/month	Fixed	Model as stable admin overhead for the monthly planning range.	Using $25,000/month instead of the model amount of $2,500/month.
Feedstock Acquisition & Logistics	Variable	Apply as 16.0% of first-year revenue, declining to 14.0% by the mature year.	Treating feedstock and trucking as fixed overhead instead of revenue-linked pressure.
Sales Commissions & Marketing	Variable	Apply as 2.0% of first-year revenue, declining to 1.4% by the mature year.	Budgeting it as a flat monthly spend and overstating margin at higher sales.
Chemical Inputs for B100, B20, and B5	Variable	Charge $0.15 per B100 unit, $0.12 per B20 unit, and $0.10 per B5 unit.	Using one blended input rate before product mix is stable.
Plant Utilities, Maintenance, Testing, and Compliance	Semi-variable	Model the usage-linked share by product revenue while allowing a base plant load.	Calling QA and compliance fixed even though higher throughput drives more testing and oversight.
Production Technicians	Semi-fixed	Step payroll from 4.0 FTE in the first year to 12.0 FTE by Year 5 as capacity rises.	Scaling labor perfectly per gallon instead of adding crews in staffing blocks.

How does break-even change from lean to full biodiesel output?

Scenario table

Break-even improves as output rises, because revenue grows faster than fixed overhead. The main swing factor is the feedstock spread, which drives most of the margin in every case.

Planning assumptions only; actual prices, yields, and compliance costs can move results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 case	$1.14M	$267.1K	$98.9K	76.6%	$772.4K	Break-even sits near $129K/month, so this case clears it with room.
Base Year 3 case	$3.43M	$749.9K	$130.1K	78.1%	$2.55M	Break-even rises to about $167K/month, still far below sales.
Full Year 5 case	$7.52M	$1.54M	$156.0K	79.6%	$5.82M	Break-even is about $196K/month, leaving the widest cushion.

What breaks the break-even plan if volume slips or costs rise?

Stress test

Base Year 1 revenue is about $1.138M per month versus a $129K break-even point, so the cushion is still large. The plan gets pressured fast if sales slip, feedstock and logistics rise, or overhead creeps.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$129,000	$1,009,333 cushion	Base plan clears break-even by a wide margin.
Revenue shortfall	Year 1 revenue falls 10% from forecast.	$129,000	$895,500 cushion	Softer demand still clears break-even, but capacity sits underused.
Fixed-cost pressure	Fixed overhead rises by $20,000 per month.	$155,000	$983,333 cushion	Overhead creep is the fastest way to shrink cushion.
Margin pressure	Feedstock and logistics cost 2 points more.	$133,000	$1,005,333 cushion	Feedstock inflation trims cushion before demand does.
Combined pressure	Revenue falls 10%, fixed overhead rises $20,000 per month, and feedstock and logistics cost 2 points more.	$160,000	$864,500 cushion	Low tank turns, spot feedstock buying, and delayed RIN sales are the warning signs.

Can this biodiesel plant prove enough sales before you lock the reactor build?

Founder checklist

Yes, but only if committed demand, feedstock terms, and Month 1 cash all clear the model before you sign the build. Here’s the quick test: sales, supply, and reserve cash have to line up before the reactor and tanks are paid for.

1Offtake Cover$13.66M

Get committed demand for B100, B20, B5, glycerin, and RINs (compliance credits) before major capex, because Year 1 sales only work if you clear $13.66M.

2Feedstock Terms16.0%

Lock feedstock and logistics terms early, because Year 1 feedstock acquisition and logistics already run at 16.0% of revenue.

3Margin Stack82.0%

Check the contribution margin, the money left after variable costs, because Year 1 only leaves about 82.0% before fixed costs.

4Fixed Load$98.9K/mo

Make sure the monthly fixed load stays near $98.9K, or the plant will need more volume than the Year 1 mix can carry.

5Build Scope$2.85M

Confirm utilities, storage, trucking lanes, and safety systems are ready before you spend the $2.85M capital spending (capex) budget, and don't pull forward the Month 13 hires unless utilization is there.

6Cash Cushion$1.085M

Hold at least $1.085M of cash in Month 1, because that is the minimum reserve the model says you need to open.