Candle Making Business Break-Even Analysis: $25K Monthly Revenue

Fixed costs $14.6K/mo Overhead base

Contribution margin 58% After variable

Break-even revenue $24.9K/mo Sales target

Break-even timing Month 2 Launch ramp

Break-even calculator

Test monthly candle revenue against variable costs and fixed costs to see where break-even lands.

Lean Base Full

Monthly revenue Revenue is the cash in that can cover variable and fixed costs. $ Lower sales Higher sales Variable expenses These costs move with each candle, diffuser, or spray sold. $ Tighter costs Heavier costs

Money available to cover fixed costs $23,500 $43,750 revenue - $20,250 variable expenses

Margin ratio

54%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base the margin has to cover. $ Lean setup Bigger setup

Break-even chart Revenue Total costs

Which candle making expenses are fixed, and which move with sales?

Cost classification

Break-even gets reliable when batch materials are kept separate from monthly overhead. Here’s the quick math: fixed expenses set the monthly hurdle, while unit materials and sales fees reduce contribution on each order.

Expense	Cost	Break-Even Treatment	Common Mistake
Classic Soy Candle materials	Variable	Treat soy wax, fragrance oil, wick, jar, and label as $7.80 per unit before revenue-based fees.	Putting batch inputs into overhead and overstating margin.
ScentScape Collection materials	Variable	Model premium wax, exclusive fragrance, custom vessel, collection box, and special label as $14.50 per unit.	Using the standard candle material rate for premium products.
Packaging & Shipping Costs	Variable	Apply as 10.0% of first-year revenue, then reduce by forecast year as volume improves.	Treating shipping as fixed when each sale adds pack-out work.
Payment Processing Fees	Variable	Apply as 3.0% of first-year revenue, tied directly to completed sales.	Forgetting card fees and overstating contribution per order.
Workshop Rent	Fixed	Use $2,500 per month as the core monthly overhead hurdle.	Dividing rent by units too early and hiding idle capacity.
Utilities	Fixed	Use $400 per month in this model; track production utility usage separately if added later.	Mixing base utilities with batch usage without a clear driver.
E-commerce Platform Fees	Fixed	Use $200 per month while the subscription stays stable across the planning range.	Charging the platform fee to each unit sold.
Consumer Product Safety Commission compliance and testing	Fixed	Use $100 per month as recurring compliance overhead for break-even planning.	Leaving safety testing out because it doesn’t touch each unit.

How does break-even change from a lean launch to base scale and full production?

Scenario table

Higher volume lifts the contribution margin ratio because packaging, shipping, and payment fees fall from 13.0% of revenue in Year 1 to 10.6% in Year 3. That gives more room above fixed costs and lowers break-even risk.

Planning case only; actual break-even moves with product mix, pricing, and fee rates.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch mix	$43,750	$18,240	$14,583	58.3%	$10,927	Break-even is covered by Month 2, but the cushion is modest.
Base scale mix	$69,625	$27,680	$18,167	60.2%	$23,778	Higher volume widens the cushion and lowers fee pressure.
Expanded production mix	$110,917	$42,016	$22,083	62.1%	$46,818	This is the strongest cushion, with the lowest break-even risk.

What breaks the break-even plan for this candle business?

Stress test

The base plan has room, but it gets tight fast if demand slows or wax, fragrance, shipping, or discounting pressure margins. The combined stress case shows the cushion nearly gone, so monthly sales pace and input costs need close tracking.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$25,000	$18,750 cushion	Base case covers fixed costs with room left.
Revenue shortfall	Monthly revenue falls 15% to $37,188.	$25,000	$12,188 cushion	Demand softens, but the plan still clears break-even.
Fixed-cost pressure	Fixed monthly costs rise 20% to $17,500.	$30,012	$13,738 cushion	Overhead creep cuts into the break-even buffer.
Margin pressure	Contribution margin falls 5 points to 53.3%.	$27,360	$16,390 cushion	Wax, fragrance, shipping, or discounting push break-even up.
Combined pressure	Revenue falls 30%, margin drops 5 points, and fixed costs rise 20%.	$31,796	$1,171 gap	Three hits at once can put the business slightly underwater.

Can you prove demand and unit economics before you commit to the workshop lease?

Founder checklist

The model says break-even lands in Month 2, but only if demand, pricing, and costs hold. Before you sign a lease or buy inventory, make sure the $25,000 monthly target, the $31.82 average sale, and the 58.3% margin still pencil out.

1Launch Demand$25K/mo

Verify paid orders can reach the $25,000 monthly break-even target before you lock in the $2,500 workshop rent.

2Fixed Load$3.75K/mo

Keep fixed overhead near $3,750 a month, including $2,500 rent, $150 insurance, and Consumer Product Safety Commission (CPSC) testing, because that sets the floor.

3Unit Pricing$31.82 / $9.13

Check that the mix holds a $31.82 weighted average selling price and about $9.13 of direct materials per average unit before you buy deep inventory.

4Contribution58.3%

Keep contribution margin at the 58.3% base case, with packaging and shipping near 10% of revenue and payment fees near 3%, or ad spend gets risky.

5Capacity Ramp1,375/mo

Match workshop output to 16,500 Year 1 units, or about 1,375 a month, and delay extra help until sales can pay for it.

6Cash Cushion$1.182M

Hold enough cash for the Month 2 trough; the model shows minimum cash of $1.182 million, and the $26,800 launch equipment and setup spend belongs outside profit break-even.