Cardboard Recycling Break-Even: About $81K Monthly Revenue

Break-Even Metric Cards

Fixed costs $14.3K Monthly overhead base

Contribution margin 70.5% After variable costs

Break-even revenue $20.3K Revenue to cover fixed

Break-even timing Month 33 Model break-even point

Break-Even Calculator

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a cardboard recycling operation.

Lean Base Full

Monthly revenue Revenue drives the margin left to cover fixed costs each month. $ Low sales High sales Variable expenses These are direct costs that rise with collected and processed volume. $ Low direct cost High direct cost

Money available to cover fixed costs $102,195 $135,200 revenue - $33,005 variable expenses

Margin ratio

76%

Covers fixed costs

$22 short

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

Break-even chart Revenue Total costs

Which cardboard recycling expenses are fixed and which move with sales?

Cost classification

Break-even gets unreliable when committed costs are treated like pay-as-you-go costs. Here, the key is separating depot overhead and salaried route capacity from fees that rise with revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Office & Depot Rent	Fixed	Use $5,000 per month in fixed overhead from Month 1 through Month 60.	Spreading rent across pickups too early and hiding the monthly cash burden.
Fleet & General Liability Insurance	Fixed	Use $2,500 per month as a fixed operating charge in break-even.	Modeling insurance as volume-based even though coverage is committed monthly.
Software Subscriptions	Fixed	Use $1,000 per month for CRM, routing, and billing software.	Dropping software from break-even because it feels small versus trucks and payroll.
Recycling Facility Processing Fees	Variable	Apply 12.0% of revenue in the first year, falling to 8.0% by Year 5.	Using one flat dollar amount instead of tying fees to processed volume and revenue.
Collection Fleet Fuel Costs	Variable	Apply 6.0% of revenue in the first year, falling to 4.0% by Year 5.	Treating fuel as fixed when route miles rise with more customer pickups.
Payment Processing Fees	Variable	Apply 1.5% of revenue in the first year, falling to 1.1% by Year 5.	Forgetting card and billing fees when calculating contribution margin.
Collection Drivers Salaries	Semi-fixed	Model driver payroll in staffing steps: 3 FTE in Year 1 and 6 FTE in Year 2.	Treating all driver labor as variable when base staffing is committed before full route density.
Utilities & Internet	Semi-variable	Start with the $800 monthly base, then review usage as processing activity rises.	Assuming the whole bill is fixed even as depot activity and billing volume increase.

How does break-even change from a lean launch to a denser route?

Scenario table

The lean case stays below fixed cost, the base case lands at operating break-even, and the denser Year 2 route adds a small cushion. Here’s the quick math: higher customer capacity and a better price mix lift contribution faster than fixed overhead.

Planning assumptions only; pickup count, tonnage, and bale resale value stay editable because actual route density changes the result.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$42.5k	$12.5k	$57.2k	70.5%	-$27.2k	Below break-even; fixed cost is still uncovered.
Year 1 break-even case	$81.2k	$24.0k	$57.2k	70.5%	$0.0k	Operating break-even; small swings move profit fast.
Year 2 dense route	$116.3k	$31.4k	$73.5k	73.0%	$11.4k	Small cushion; better density helps, but payroll still matters.

What breaks the break-even plan for this cardboard recycling business?

Stress test

The cushion depends on dense routes, steady resale value, and tight fleet costs. If signed accounts slow, fuel spikes, or baled cardboard sells for less, break-even moves out fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$812k	$0 cushion	Plan sits right on break-even.
Revenue shortfall	Revenue falls 10% to about $731k.	$812k	$57k gap	Fewer signed accounts leave the month short.
Fixed-cost increase	Monthly fixed costs rise 10% to about $629k.	$893k	$81k gap	Depot and overhead creep push the hurdle up.
Margin pressure	Variable expenses rise 5 points, cutting contribution margin to 65.5%.	$874k	$62k gap	Fuel, processing, or contamination squeeze cash left.
Combined pressure	Revenue falls 10%, margin drops 5 points, and fixed costs rise 10%.	$960k	$151k gap	All three hits together push cash needs up fast.

What should the founder verify before committing to trucks, bins, and depot space?

Founder checklist

Do not buy the next truck or depot equipment until signed recurring volume can cover the Year 1 cost base. The break-even test is about 319 active customers at a $255 blended price, with route capacity and cash runway holding before new hires.

1Volume Target$81.3K/mo

Verify that about 319 active customers at the Year 1 blended price can produce this monthly revenue before you scale spend.

2CAC Check167 customers

Check that a $50,000 Year 1 marketing budget at $300 CAC can really produce enough new accounts to reach the target.

3Fixed Load$57.2K/mo

Make sure signed recurring revenue can cover rent, insurance, salaries, and overhead before you add more staff.

4Route Capacity3 FTE

Prove routes can keep three collection driver FTE busy before you buy more trucks, or you will add idle miles and cash burn.

5Launch Readiness$130K capex

Define contamination rules before first pickup, then confirm processing capacity before the $70,000 depot equipment and the $80,000 truck plus $50,000 bins.

6Cash Runway-$1.065M

Minimum cash drops to about this level in Month 33, so do not hire ahead of fixed-cost absorption or the runway will break first.