Daycare Center Break-Even Analysis: $62K Monthly Revenue Target

Fixed costs $23.9K/mo Core monthly base

Contribution margin 83% After variable costs

Break-even revenue $28.8K/mo Revenue to cover base

Break-even timing Month 2 Model hits breakeven

Break-even calculator

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

Lean Base Full

Monthly revenue Revenue is the pool that covers variable costs first, then fixed costs. $ Lower sales Higher sales Variable expenses These are the direct costs that rise with enrollment, like food, supplies, marketing, and software. $ Lower direct cost Higher direct cost

Money available to cover fixed costs $62,900 $75,700 revenue - $12,800 variable expenses

Margin ratio

83%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the center has to cover before profit. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which daycare expenses stay fixed, and which move with enrollment?

Cost classification

For this daycare center, break-even is only useful if fixed payroll and rent stay fixed while enrollment costs move with tuition revenue. Misclassifying teacher payroll as variable can make Month 2 break-even look safer than staffing reality.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Lease ($10,000/month)	Fixed	Include the full monthly lease before contribution margin.	Spreading rent per child and reducing it at 60% occupancy.
Director payroll ($6,250/month)	Fixed	Treat as required monthly overhead across the planning range.	Cutting director payroll in low-enrollment months.
Administrative Assistant ($3,333/month)	Fixed	Keep as monthly overhead needed to run the center.	Tying office coverage directly to enrolled children.
Lead Teacher and Assistant Teacher payroll	Semi-fixed	Add payroll in FTE steps as rooms and coverage needs rise.	Treating teacher payroll as fully variable by child.
Food & Nutrition	Variable	Model at 7% of revenue in the first operating year.	Using a flat monthly food budget despite enrollment changes.
Educational Materials & Supplies	Variable	Model at 4% of revenue in the first operating year.	Ignoring supply use as occupied places increase.
Marketing & Enrollment	Variable	Model at 4% of revenue in the first operating year.	Leaving acquisition spend fixed while enrollment ramps.
Utilities ($1,500/month)	Semi-variable	Use the base amount, then allow usage to rise with activity.	Treating power, water, and heating as purely fixed.

How does break-even change from a lean launch to full enrollment in a daycare center?

Scenario table

With $51,450 of fixed costs each month, occupancy drives the break-even line. The 83% contribution margin means lean launch stays in the red, the base case lands at zero, and full enrollment adds cushion.

Planning figures are model-based assumptions for comparison, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch at 60% occupancy	$43,500	$7,395	$51,450	83%	-$15,345	Still below break-even, so occupancy must rise.
Base break-even case	$61,988	$10,538	$51,450	83%	$0	Hits break-even, but leaves no cushion.
Full enrollment at 45 children	$71,500	$12,155	$51,450	83%	$7,895	Creates a modest monthly profit cushion.

What breaks the daycare break-even plan?

Stress test

The current plan clears break-even by about $9,512 a month. A 10% revenue miss trims the cushion fast, and a mix of weaker enrollment plus higher fixed and child-level costs pushes the model about $8,208 below break-even revenue.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; revenue is $71,500, variable expenses are 17%, and fixed costs are $51,450.	$61,988	$9,512 cushion	Healthy cushion, but enrollment still has to stay full.
Revenue shortfall	Revenue falls 10% to $64,350.	$61,988	$2,362 cushion	A small enrollment miss cuts most of the margin.
Fixed-cost increase	Fixed costs rise 10% to $56,595.	$68,188	$3,312 cushion	Lease or staffing creep can eat the cushion fast.
Margin pressure	Variable expenses rise to 22% of revenue.	$65,962	$5,538 cushion	Food and supply inflation lower headroom, but the plan still clears break-even.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and variable expenses rise to 22%.	$72,558	$8,208 gap	One soft month plus cost creep pushes the center below break-even.

Can you prove this daycare breaks even before you sign the lease and hire the team?

Founder checklist

Yes—test paid slots, rent, payroll, and cash before any lease or hiring move. The model needs about 39 paid slots, a 45-slot operating plan, and enough cash to cover the Month 2 trough.

1Paid slots39 slots

Verify you can fill about 39 paid children at the test tuition mix, because that is the break-even demand floor before fixed costs start to bite.

2Lease load$15.2K/mo

Check that rent and site overhead stay near this level, since the facility cost stack must fit inside monthly tuition cash flow from day one.

3Tuition mix$1,800/$1,600/$1,400

Confirm the infant, toddler, and preschool price mix holds, because the average revenue per slot has to support break-even without discounting.

4Staffing load7 FTE

Verify you need the planned 3 lead teachers and 4 assistant teachers before hiring, since payroll is the biggest monthly cost after the lease.

5Cash cushion$861K

Protect enough cash to cover the Month 2 low point, because the one-time build-out and early operating losses sit outside operating break-even.

6Open fill60%

Do not open on 60% occupancy alone, since that level leaves too little room if fixed costs are already live and enrollment ramps slower than planned.