Dollar Store Break-Even Analysis: $24k Monthly Revenue Floor

Fixed costs $19.8K/mo Overhead plus payroll

Contribution margin 82.5% After variable costs

Break-even revenue $23.9K/mo Monthly revenue target

Break-even timing Month 12 Model break-even point

Break-even calculator

Test how monthly revenue, variable expenses, and fixed costs shape break-even.

Lean Base Full

Monthly revenue Use the sales coming in each month before costs. $ Low sales High sales Variable expenses Use costs that rise with sales, like product buys and payment fees. $ Low costs High costs

Money available to cover fixed costs $168,834 $200,279 revenue - $31,445 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly overhead that stays due even when sales dip. $ Low overhead High overhead

Break-even chart Revenue Total costs

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

Cost classification

Break-even gets cleaner when rent and core overhead stay fixed, while inventory, freight, card fees, and bags move with sales. Misclassifying payroll or utilities can make Month 12 break-even look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Store Rent	Fixed	Model as $3,500 per month from Month 1 through Month 60.	Treating rent as a percent of sales, which understates losses in slow months.
Store Insurance	Fixed	Model as $250 per month across the planning range.	Dropping it from break-even because it feels small.
Product Purchase Cost	Variable	Apply to sales volume; first year rate is 12.0% of revenue.	Using gross sales as margin and forgetting merchandise buy cost.
Inbound Logistics	Variable	Apply as freight tied to product flow; first year rate is 3.0% of revenue.	Hiding freight inside overhead, which overstates contribution margin.
Payment Processing Fees	Variable	Apply to card-based sales; first year rate is 1.5% of revenue.	Ignoring processing fees because each ticket is small.
Packaging & Bags	Variable	Apply to sales activity; first year rate is 1.0% of revenue.	Budgeting one flat monthly amount while order count rises.
Utilities	Semi-variable	Use the $800 monthly base in break-even, then watch usage as traffic grows.	Calling the whole bill fixed and missing higher power, lighting, and HVAC use.
Payroll	Semi-fixed	Start with $13,750 per month in the first year, then step up as FTE count rises.	Modeling labor as fully variable, even though scheduled coverage must be paid before sales arrive.

How does break-even change across lean, base, and full store formats?

Scenario table

Higher payroll and a smaller margin on sales push break-even up fast. The model reaches break-even in Month 12, while payback takes 25 months, so the full case needs much more monthly sales and a thinner cash cushion.

Planning assumptions only; actual break-even will move with traffic, losses, and staffing mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean owner-run store	$7,273	$1,273	$6,000	82.5%	$0	Only works if owner labor stays unpaid.
Base Year 1 store	$23,940	$4,190	$19,750	82.5%	$0	This matches the model's Month 12 break-even, but cash is tight before then.
Full Year 5 store	$38,953	$5,453	$33,500	86.0%	$0	It needs stronger traffic, but the margin cushion is better once volume scales.

What pushes a dollar store below break-even?

Stress test

Break-even is tight at about $23,940 a month, so a 10% sales miss or a small cost increase can flip the store into loss. Watch conversion below 20%, freight above 3.0%, and payroll added before traffic supports it.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$23,940	$0 gap	No cushion; any miss hurts.
Revenue shortfall	Revenue falls 10% to $21,545.	$23,940	$2,395 gap	A small traffic miss creates about a $1,975 monthly loss.
Fixed-cost pressure	Fixed overhead rises by $2,000 a month.	$26,364	$2,424 gap	Extra payroll or overhead lifts the bar fast.
Margin pressure	Variable expenses rise from 17.5% to 20.5% of revenue.	$24,843	$903 gap	Higher freight and shrink cut contribution enough to erase the cushion.
Combined pressure	Revenue is 10% lower, variable expenses rise to 20.5%, and fixed overhead is $21,750.	$27,358	$5,813 gap	The same miss plus cost creep creates about a $4,622 monthly loss.

What should you verify before signing the lease for a low-price variety store?

Founder checklist

Before you sign the lease, check whether the store can clear the traffic, basket size, and cash it needs to break even. For this model, the hard test is about $23.94K in monthly sales against $6.0K in fixed overhead and $13.75K in Year 1 payroll.

1Traffic Test$23.94K/mo

Test whether local traffic can support about $23.94K in monthly sales; at 6 units per order and $1.25 each, the basket is only $7.50, so you need steady conversion.

2Base Overhead$6.0K/mo

Verify the $3,500 rent fits inside the $6,000 monthly fixed load, because that is the floor you pay before any sales come in.

3Payroll Plan$13.75K/mo

Lock the Year 1 payroll plan at $13,750 a month before hiring, because the manager, associates, district manager, inventory lead, and cleaner already set the labor floor.

4Margin Stack82.5% CM

Check that product purchase at 12%, inbound logistics at 3%, payment processing at 1.5%, and bags at 1.0% still leave about 82.5% contribution margin before fixed costs.

5Opening Stock$25K

Fund the $25,000 opening inventory and get POS and security live first, so the store can receive, scan, and protect stock on day one.

6Cash CushionMonth 13 / $766K

Keep enough cash through Month 13, because the model’s low point is $766,000 and payback takes 25 months, not 12.