Custom Metal Gate Fabrication Break-Even Analysis: $76K/Month

Fixed costs $12.1K/mo Core overhead

Contribution margin 69% After variable costs

Break-even revenue $17.5K/mo Monthly target

Break-even timing Month 2 Model break-even

Break-even calculator

Use this to see how monthly gate sales, direct job costs, and the fixed shop bill set break-even.

Lean Base Full

Monthly revenue Revenue is the top line that funds all direct and fixed costs. $ Low volume Busy shop Variable expenses Use direct steel, labor, finishing, and delivery costs that rise with each gate job. $ Tight costs Heavy costs

Money available to cover fixed costs $150,925 $216,833 revenue - $65,908 variable expenses

Margin ratio

70%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly shop and payroll base that break-even has to cover. $ Lean staff Big shop

Break-even chart Revenue Total costs

Which custom gate shop expenses are fixed, and which move with sales?

Cost classification

Break-even is only reliable when overhead stays separate from job-level spending. If direct labor, coating, travel, or commissions get buried in fixed costs, the model can overstate margin and understate the sales needed to stay safe.

Expense	Cost	Break-Even Treatment	Common Mistake
Fabrication Facility Lease	Fixed	Carry $6,500/month as base overhead before any gate volume.	Spreading rent across jobs and assuming it falls when orders slow.
Utilities and Industrial Power	Semi-variable	Start with $1,200/month, then add fabrication energy tied to shop activity.	Treating all power use as fixed and missing heavy production months.
Raw Steel and Metals	Variable	Deduct per gate before contribution margin; estate gates use $1,200 and sliding gates use $1,500.	Blending metal purchases into overhead instead of job margin.
Direct Fabrication Labor	Variable	Assign labor to each unit, from $400 on garden gates to $1,500 on ornate iron gates.	Putting direct fabrication labor in overhead.
Powder Coating and Finishing	Variable	Include coating and finishing on each gate, such as $400 powder coating on estate gates.	Treating coating as fixed even though it follows completed jobs.
Transport to Site and Consultation Travel	Variable	Charge delivery and travel to job-level margin, including the first-year 3% travel assumption.	Ignoring install travel and overstating contribution per gate.
Project Management Commission	Variable	Deduct 5% of revenue in the first year before break-even margin.	Excluding commissions at 5% of revenue.
Core Shop Staffing	Semi-fixed	Model salaried capacity in steps: manager, designer, two welders, and sales manager start before volume scales.	Treating salaried staffing as fully variable with each gate sold.

How does break-even shift from launch to mature custom gate fabrication?

Scenario table

Break-even is tight at launch, then it gets easier as revenue rises and the fixed shop load is spread over more jobs. Year 1 sits near Month 2 breakeven, while Year 5 carries the widest cushion.

Planning assumptions only; actual margins move with job mix, labor hours, and overhead.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch year	$98.0k	$38.1k	$46.3k	61.1%	$13.6k	Month 2 breakeven; launch cash needs close watch.
Base scaling year	$216.8k	$79.0k	$46.3k	63.6%	$91.5k	Healthy cushion; scale absorbs fixed overhead better.
Full mature year	$358.8k	$122.2k	$82.5k	66.0%	$154.1k	Largest cushion; capacity and staffing are the key checks.

What pressures can break the break-even plan for custom gate fabrication?

Stress test

At about $98,000 a month in Year 1, the shop clears break-even by roughly $22,000 a month. The cushion gets thin fast if close rates slow or if steel, coating, rework, fuel, or install labor push margins down.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$75,848/month	$22,152 cushion	Healthy on paper, but the buffer is not huge.
Revenue shortfall	Year 1 revenue lands 20% below plan.	$75,848/month	$2,552 cushion	A modest sales miss nearly wipes the cushion.
Fixed-cost pressure	Monthly overhead rises by $1,000.	$77,487/month	$20,513 cushion	A small overhead bump moves break-even up fast.
Margin pressure	Contribution margin falls from 61% to 47%.	$98,440/month	$440 gap	Steel, coating, rework, or install labor can erase the buffer.
Combined pressure	Revenue is 20% below plan, margin slips to 47%, and monthly overhead rises by $1,000.	$100,568/month	$22,168 gap	Slow closes plus higher inputs push the shop well below break-even.

Can you prove enough gate demand before you sign the shop lease?

Founder checklist

Don’t sign the lease or buy major equipment until the first-year mix can cover about $46.3K a month of fixed load and still protect the $996K cash trough at Month 24. If backlog, price, or capacity slips, break-even gets shaky fast.

1Signed backlog$6,500/mo

Verify signed orders are in hand before the $6,500 monthly lease starts, so the shop does not open with empty fixed costs.

2Fixed load$46.3K/mo

Check that lease, utilities, insurance, software, marketing, admin, and Year 1 payroll really sit near $46.3K a month before any extra hiring.

3Gate pricing$4.5K-$18K

Hold Year 1 prices at $12,500 estate, $4,500 garden, $18,000 automated, $8,500 aluminum, and $15,000 ornate so discounts do not erase margin.

4Gross margin69%-79% GM

Confirm each gate type keeps about 69% to 79% gross margin before discounts, based on the Year 1 direct cost stack for metal, labor, coating, hardware, and transport.

5Shop capacity121 gates

Make sure the Year 1 plan of 121 gates fits welding, design, coating, and install time with the current team and the assistant only starting in Month 13.

6Runway plan$270K + $996K

Stage the $45K cutting table, $25K welders, $60K coating oven and booth, $55K truck, $35K forklift, and $20K display gates against demand, while keeping the $996K minimum cash reserve at Month 24.