Cosmetics Store Break-Even Analysis: $318K Monthly Sales Target

Fixed costs $9.4K/mo Base overhead

Contribution margin 80.3% After variable costs

Break-even revenue $11.7K/mo Monthly target sales

Break-even timing Month 26 Model payback point

Break-even calculator

Use this to test whether monthly sales cover variable costs and the fixed cost base.

Lean Base Full

Monthly revenue Revenue sets the margin that has to cover fixed overhead. $ Low sales High sales Variable expenses These are the costs that rise with each sale, like inventory and card fees. $ Low costs High costs

Money available to cover fixed costs $55,964 $68,752 revenue - $12,788 variable expenses

Margin ratio

81%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the store must cover before profit starts. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which cosmetics store expenses are fixed, and which move with sales?

Cost classification

Break-even gets useful only when each expense matches how it behaves. Treat rent as fixed, inventory and card fees as variable, and payroll or utilities as step-based so Month 26 break-even is not overstated.

Expense	Cost	Break-Even Treatment	Common Mistake
Retail Space Lease	Fixed	Cover the $4,500 monthly lease before profit starts; it does not fall when store traffic is slow.	Modeling rent as a percentage of sales.
Sales Associate wages	Semi-fixed	Build in staffing steps as Sales Associate FTE rises from 1.5 in the first year to 3.5 by the fifth year.	Treating payroll as fully variable per order.
Product Inventory Costs	Variable	Apply inventory at 18.5% of first-year revenue, improving to 16.5% by the fifth year.	Entering 185% instead of 18.5%.
Payment Processing & Transaction Fees	Variable	Apply fees directly to sales, starting at 1.2% of revenue and easing to 1.0% by the fifth year.	Leaving card fees out of contribution margin.
Utilities & Internet	Semi-variable	Use the $650 monthly base, then pressure-test higher usage as visitors and store hours rise.	Treating every utility dollar as fixed forever.
Marketing & Advertising	Semi-fixed	Keep the $2,200 monthly plan in break-even, but review spend when traffic targets miss.	Cutting marketing in the model while still assuming higher visitors.
Supplies & Packaging Materials	Semi-variable	Start with the $300 monthly base and scale packaging with order volume.	Forgetting that more orders use more bags, samples, and labels.

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

Scenario table

Lean staffing keeps the break-even bar lower, but the cushion is thin. Add the inventory specialist, or move into fuller Year 3 payroll, and the store needs more sales just to stay even.

Planning assumptions only. These scenario figures show break-even pressure under different staffing and sales mixes, not a guarantee of results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$300k	$59k	$241k	80.3%	$0	Thin cushion; a small sales dip turns loss.
Base case with inventory specialist	$318k	$62k	$256k	80.5%	$0	Near break-even, but payroll leaves little room.
Full Year 3 staffing	$426k	$79k	$347k	81.4%	$0	More sales are needed, so traffic and repeat orders matter more.

What pushes this cosmetics store below break-even?

Stress test

This store breaks even at about $318k in monthly revenue. A 10% sales miss, $2k higher fixed costs, or variable costs rising from 19.7% to 24.7% can push it under; combined pressure is the real danger.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; the plan holds at 80.3% contribution margin.	$318,000	$0 gap	No cushion if traffic slips.
Revenue shortfall	Monthly revenue runs 10% below the break-even target.	$318,000	$26,000 gap	A small traffic miss removes about $26k of contribution.
Fixed cost pressure	Fixed costs rise by $2,000 a month.	$343,000	$25,000 gap	Overhead creep raises the sales bar fast.
Margin pressure	Variable expenses rise from 19.7% to 24.7%.	$340,000	$22,000 gap	Discounts, shrink, and returns squeeze contribution fast.
Combined pressure	Revenue falls 10%, fixed costs rise $2,000, and variable expenses rise to 24.7%.	$342,000	$56,000 gap	Traffic, overhead, and margin pressure together blow past the cushion.

Can this cosmetics store clear break-even before you sign the lease and fund the opening?

Founder checklist

Treat this as a go/no-go gate before you sign the lease, order opening stock, or hire full staff. The store needs enough traffic, margin, and cash to survive the Year 1 loss and still reach Month 26 break-even.

1Lease load$9.4k/mo

Verify the $4,500 rent plus the other fixed costs stay near $9,400 a month, so the lease does not force sales past what the store can realistically draw.

2Traffic proof60/day

The Year 1 traffic plan averages about 60 visitors a day, which is below the roughly 74/day floor needed to reach break-even sales at the 18% visitor-to-buyer rate.

3Launch spend$174.5k

Confirm the full opening bill, including the $55,000 first inventory buy, stays near $174,500 so build-out and setup do not drain cash before sales start.

4Margin check80.3%

Keep contribution margin, the share left after product cost and card fees, near 80.3%; 18.5% inventory cost plus 1.2% fees already leaves little room for markdowns or shrink.

5Payroll ramp$16.2k/mo

Year 1 wages average about $16.2k a month across 5.0 FTE, so hiring should wait until sales can carry that load.

6Cash reserve$388k

Keep at least $388,000 of cash for the $212,000 Year 1 EBITDA loss and the Month 26 break-even lag, and pause expansion spend if repeat orders stay below the 35% target.