Dispute Resolution Service Break-Even: Month 4 At $43k

Fixed costs $6.35K Monthly base load

Contribution margin 72% After variable costs

Break-even revenue $8.82K Monthly revenue floor

Break-even timing Month 4 Model break-even

Break-even calculator

See whether monthly revenue covers variable expenses and fixed monthly costs.

Lean Base Full

Monthly revenue Higher revenue gives you more room to cover fixed overhead. $ Lower sales Higher sales Variable expenses These are direct costs tied to each month of case work. $ Lower costs Higher costs

Money available to cover fixed costs $279,062 $372,083 revenue - $93,021 variable expenses

Margin ratio

75%

Covers fixed costs

Yes

Fixed monthly costs This is the cost base your margin has to cover every month. $ Low overhead Higher overhead

Break-even chart Revenue Total costs

Which mediation service expenses stay fixed, and which move with case volume?

Cost classification

Classifying costs keeps the Month 4 break-even target honest: rent and core tools must be covered every month, while mediator fees, filings, intake, travel, marketing, and support roles rise with case volume or growth goals.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent and Utilities	Fixed	Include $4,500 per month before calculating contribution margin.	Treating rent as case-linked understates the monthly revenue floor.
Professional Liability Insurance	Fixed	Include $650 per month from Month 1 through Month 60.	Dropping coverage from break-even because it does not vary by session.
Contract Mediator Fees	Variable	Apply 18% of revenue in the first year as delivery volume grows.	Modeling contract mediators as fixed payroll instead of revenue-linked delivery expense.
Legal Document Filing Fees	Variable	Apply 2% of revenue when cases require filing support.	Ignoring small percentages that compound as revenue grows.
Client Intake and Assessment Costs	Variable	Apply 5% of revenue in the first year as new matters enter the pipeline.	Treating intake as office overhead when it moves with client volume.
Annual Marketing Budget	Semi-variable	Start with $45,000 in the first year and flex spend with referral goals.	Treating all marketing as fixed even when acquisition targets change.
Customer Acquisition Cost	Semi-variable	Use $450 per acquired customer to test paid outreach volume.	Averaging CAC into overhead and hiding weak acquisition channels.
Senior Case Manager	Semi-fixed	Add capacity in steps: 1.0 FTE first year, 1.5 FTE third year, and 2.0 FTE fourth year.	Treating support labor as case-level expense instead of a staffing step.

How does break-even shift from a lean solo ramp to a base launch and a fuller calendar?

Scenario table

Break-even gets safer as utilization rises. The lean solo ramp barely clears fixed cost, the base launch has a wide cushion, and the fuller calendar adds more profit because revenue grows faster than fixed cost.

Planning cases only; actual results can move with case mix, staffing, and intake speed.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean solo ramp	$454k	$127k	$311k	72%	$16k	Only a small cushion, so a slow month can push it back to break-even.
Base launch	$1,135k	$318k	$311k	72%	$506k	Healthy cushion, so the planned launch clears fixed cost with room to spare.
Full retained-business calendar	$2,377k	$630k	$414k	73.5%	$1,333k	Strong cushion, with retained dispute work keeping profit well above break-even.

What breaks the break-even plan for this mediation service?

Stress test

The current plan clears break-even with a wide cushion. The main risks are weaker referrals, CAC above $450, slower intake, discounting below planned hourly rates, and fixed overhead rising faster than revenue.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$433k	$702k cushion	CAC above $450 would be the first warning.
Revenue shortfall	Revenue drops 15% on weaker referrals.	$433k	$532k cushion	A 15% miss still clears break-even, but the buffer shrinks.
Fixed-cost increase	Fixed costs rise 10% from higher overhead.	$476k	$659k cushion	Higher overhead raises the hurdle before headcount grows.
Margin pressure	Variable expenses rise from 28% to 33%.	$465k	$670k cushion	Discounting and travel-heavy matters push break-even up.
Combined pressure	Revenue falls 25%, variable expenses hit 33%, and fixed costs rise 10%.	$623k	$228k cushion	This still clears break-even, but the buffer gets tight.

What should the founder verify before signing the lease and scaling a mediation practice?

Founder checklist

Verify referral flow, pricing, and capacity before you sign the lease or add staff. With $450 CAC, 72% contribution margin, $6.35K of monthly fixed overhead, and $810K minimum cash, break-even only holds if demand is real and the launch tools work.

1Referral Flow$450 CAC

Verify referral sources can hold first-year acquisition near the $450 assumption and that secure video and case management work before the first paid matters land.

2Overhead Load$6.35K/mo + $94K capex

Confirm you can carry $4,500 of rent and utilities plus the other fixed costs, and keep the $94,000 of one-time setup spend separate from monthly break-even.

3Year 1 Rates$250/$300/$200/hr

Check that clients will accept the opening hourly rates for family law, business disputes, and civil and property work, because those prices set the first-year revenue base.

4Contribution Margin72% CM

Here’s the quick math: mediator fees, filing, intake, and travel total 28% of revenue, so about 72% is left before fixed costs.

5Capacity Ramp20 matters/mo

Confirm the team can handle 20 case-equivalent matters a month before you add staff, because the Year 1 and Year 2 payroll ramp only works if referral flow keeps pace.

6Cash Buffer$810K

Hold at least the modeled minimum cash of $810,000, since the cash trough hits Month 2 and payback takes 7 months.