Composting Service Break-Even Analysis: $77K Monthly Revenue

Fixed costs $14.0K/mo Monthly overhead

Contribution margin 82% After variable costs

Break-even revenue $17.1K/mo Revenue target

Break-even timing Month 20 Model break-even

Break-even calculator

Test whether monthly revenue covers direct costs and fixed overhead for a composting service.

Lean Base Full

Monthly revenue Revenue is the pool that has to cover direct costs first, then fixed overhead. $ Low revenue High revenue Variable expenses Use direct costs that rise with service volume, like fuel, vehicle upkeep, and collection supplies. $ Light costs Heavy costs

Money available to cover fixed costs $98,200 $116,500 revenue - $18,300 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the contribution margin must cover. $ Slim base Heavy base

Break-even chart Revenue Total costs

Which compost pickup expenses are fixed, and which rise with route volume?

Cost classification

Break-even gets shaky when route costs and facility costs are mixed together. Treat rent and insurance as fixed, but model liners, fuel, and route labor based on pickups, revenue, and staffing steps.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Lease and Utilities	Fixed	Use $6,500/month in monthly overhead from Month 1 through Month 60.	Treating the lease as route-level when it does not fall with fewer pickups.
Vehicle Insurance	Fixed	Use $2,200/month as fixed fleet coverage within the current planning range.	Reducing insurance in the model when pickup volume dips for one month.
Technology Subscriptions	Fixed	Use $1,800/month for routing, billing, and operating systems.	Linking the full subscription bill to each new customer instead of base overhead.
General Liability Insurance	Fixed	Use $1,500/month as recurring overhead needed to operate.	Leaving it out of break-even because it is not tied to a single pickup.
Collection Bins and Compostable Liners	Variable	Model at 8.5% of revenue in the first year, falling to 6.5% by the fifth year.	Using a flat monthly amount even as customer count and service mix change.
Fuel and Vehicle Maintenance	Variable	Model at 9.5% of revenue in the first year, improving to 8.0% by the fifth year.	Ignoring route density, which can make low-volume routes look profitable too early.
Collection Driver Labor	Semi-fixed	Model staffing in steps: 2.0 FTE in the first year and 3.0 FTE in the second year.	Spreading driver pay perfectly across pickups when payroll rises by full headcount.
Composting Facility Operator Labor	Semi-fixed	Model processing labor in steps: 2.0 FTE in the first year, then 3.0 FTE in the third year.	Treating processing and contamination sorting as fully variable without staffing thresholds.

How does break-even shift from a lean route mix to a full composting buildout?

Scenario table

Break-even rises as the route mix gets fuller because payroll, facility, and marketing costs grow faster than sales. The lean plan has the lowest hurdle, but all three cases still need more monthly revenue before they cover overhead.

Planning assumptions only; actual results will move with route density, fuel use, customer mix, and hiring pace.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean route mix	$56.3k	$10.1k	$63.2k	82%	-$17.0k	Lowest hurdle, but still below break-even.
Base route mix	$60.9k	$10.2k	$72.2k	83.2%	-$21.5k	Highlighted case: revenue still trails the break-even line.
Full route buildout	$65.5k	$10.3k	$89.0k	84.3%	-$33.8k	More capacity helps margin, but it lifts break-even too.

What pushes this composting service past break-even first?

Stress test

The base case is already tight: $770k of revenue against about $632k of fixed overhead and an 82% contribution margin leaves only a thin cushion. If routes fill late or fuel and bin costs run hot, the Month 20 break-even point slips fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$771k	$1k gap	The base case has almost no cushion.
Revenue shortfall	Annual revenue falls to $632k.	$771k	$139k gap	Low route fill leaves a large hole to close.
Fixed-cost increase	Add 1 Collection Driver at $48k a year.	$829k	$59k gap	Driver coverage before volume catches up lifts the bar fast.
Margin pressure	Variable expense rises 1 point to 19%.	$780k	$10k gap	Each 1-point cost step cuts about $7.7k of annual contribution.
Combined pressure	Revenue falls to $632k, add 1 driver, and variable expense rises to 19%.	$840k	$208k gap	Late households, more fuel, and extra driver coverage can push Month 20 past plan.

Do you have enough signed pickup demand before you buy trucks and lock the lease?

Founder checklist

Verify signed pickup demand, route density, and labor coverage before you buy the second truck or lock the lease. If the customer mix or cash ramp is thin, push the spend back and keep money for the Month 20 break-even path.

1Signed Demand$770K MRR

If you want that revenue run rate, the Year 1 mix of 45% Basic Residential, 30% Premium Residential, 20% Small Business, and 5% Commercial Enterprise has to be signed, not hoped for.

2Unit Margin82% CM

The 8.5% bin and liner cost plus 9.5% fuel and maintenance leave about 82% contribution margin, so the route economics have to stay tight or fixed payroll will swallow the upside.

3Route DensityMonth 6

Map the first routes to capacity before the second $85K truck, because adding it in Month 6 only helps if the first fleet is already full enough to spread miles and labor.

4Launch Stock$35K bins

Match the initial bin inventory to signed launch demand and keep a written bin washing and sanitation plan, or service delays will slow collections and raise churn.

5Facility Flow$45K + $6.5K/mo

Lock the hauling, composting, and screening workflow before the $65K composting equipment and $28K screening equipment spend, and confirm the site can carry the $45K improvements and $6,500 monthly lease.

6Cash RunwayMonth 20

Staff to actual routes with 2 drivers and 2 facility operators in Year 1, then hold enough cash to reach Month 20 break-even and the 48-month payback path while CAC stays near $85 against the $120K marketing budget.