Candle Manufacturing Break-Even Analysis: $287K Monthly Revenue

Fixed costs $19.9K/mo Launch overhead

Contribution margin 74% After variable costs

Break-even revenue $27.0K/mo Monthly target sales

Break-even timing Month 1 First profit month

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed costs against monthly break-even.

Lean Base Full

Monthly revenue Revenue sets the margin left to cover fixed costs. $ Lower sales Higher sales Variable expenses These rise with production, shipping, and payment fees. $ Lower costs Higher costs

Money available to cover fixed costs $51,538 $69,917 revenue - $18,379 variable expenses

Margin ratio

74%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base break-even must cover. $ Lean overhead Higher overhead

Break-even chart Revenue Total costs

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

Cost classification

Break-even gets reliable when each candle-level input sits in unit margin and stable bills sit in overhead. The big trap: $0.50 of direct production labor belongs with each unit, not in fixed overhead.

Expense	Cost	Break-Even Treatment	Common Mistake
Soy Wax	Variable	Subtract $1.00 per unit from revenue before contribution margin.	Using monthly wax spend instead of unit wax usage.
Fragrance Oil	Variable	Subtract $0.60 per unit as a direct input.	Treating scent usage as fixed production overhead.
Glass Vessel	Variable	Subtract $1.20 per unit in the unit margin build.	Ignoring container mix when premium jars grow.
Direct Production Labor	Variable	Subtract $0.50 per unit as direct labor tied to output.	Putting all labor into overhead and overstating margin.
Payment Processing & Platform Fees	Variable	Apply 3.5% of first-year sales as a revenue-linked charge.	Modeling fees as a flat monthly subscription.
Shipping & Fulfillment Costs	Variable	Apply 8.0% of first-year sales to orders shipped.	Leaving fulfillment out of contribution margin.
Workshop & Office Rent	Fixed	Carry $2,500 per month in fixed overhead.	Spreading rent per candle and hiding capacity risk.
Utilities	Semi-variable	Model $300 monthly base plus 0.3% production utilities.	Putting all utilities in fixed overhead.

How does break-even change as candle production moves from lean to full scale?

Scenario table

Break-even gets easier as production scales because the same rent, software, insurance, and salaried roles get spread over more sales. The channel mix isn’t given, so wholesale discounting should be modeled separately.

Planning assumptions only; actual break-even will move with pricing, channel mix, and waste.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 run-rate	$69.9k	$18.4k	$21.1k	73.7%	$30.4k	Positive, but the cushion is still narrow.
Base Year 3 run-rate	$149.3k	$34.2k	$32.8k	77.1%	$82.3k	Fixed overhead is covered with a much safer buffer.
Full Year 5 scale	$241.3k	$49.8k	$39.7k	79.4%	$151.9k	This is the strongest cushion, so break-even risk drops.

What breaks this candle maker’s break-even plan?

Stress test

At $69,900 monthly revenue, $18,400 variable costs, and $21,125 fixed costs, the plan has about $41,200 of cushion above the $28,700 break-even point. The real risk is stacked pressure: softer sales, input inflation, and fixed-cost creep can close that gap fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$28,700	$41,200 cushion	Launch starts with about $41k of headroom.
Revenue shortfall	Monthly revenue falls to $59,900.	$28,700	$31,200 cushion	Sales softness cuts about $10k of cushion.
Fixed-cost rise	Fixed costs rise by $1,000 a month.	$30,100	$39,800 cushion	Rent, payroll, or overhead creep needs more sales.
Margin pressure	Contribution margin drops to 72.7% from discounting or input inflation.	$29,100	$40,800 cushion	Wax, fragrance oil, packaging, and shipping pressure lift break-even.
Combined pressure	Contribution margin drops to 68.7% and fixed costs rise to $26,125.	$38,000	$31,900 cushion	Stacked pressure cuts most of the monthly headroom.

What should a candle maker verify before signing the lease and buying inventory?

Founder checklist

Don’t sign the lease or hire ahead of proof. For this model, break-even only makes sense if monthly demand clears $28.7K, the shop can handle 30,000 first-year units, suppliers are locked, and cash stays above the $1.192M floor after the $67K launch build.

1Demand Floor$28.7K/mo

Use signed orders or committed wholesale demand to clear $28.7K a month before adding overhead, or the plan leans on hope.

2Fixed Load$21.1K/mo

Keep recurring rent, overhead, and Year 1 payroll near $21.1K a month, because faster growth matters more once fixed costs are set.

3Margin Check73.7% CM

Verify the blended contribution margin stays near 73.7% after COGS, payment fees, and shipping, since lower margin pushes break-even out.

4Capacity Ramp30,000 units

Test whether the shop can make, cure, label, pack, and ship 30,000 first-year units with safe storage, ventilation, and waste handling.

5Cash Floor$1.192M

Hold cash above the $1.192M floor after the $67K launch build, so Month 1 spend does not force a rushed sale or bad debt.

6Supplier Lock5 inputs

Lock soy wax, fragrance oil, wicks, vessels, and packaging before you commit to the lease or inventory buy, because one missing input can stall the run.