Drug Testing Service Break-Even: $56K Monthly Revenue Target

Fixed costs $8.6K Monthly overhead base

Contribution margin 80% After variable costs

Break-even revenue $10.8K Monthly revenue target

Break-even timing Month 2 Model break-even point

Break-even calculator

See how monthly revenue, direct costs, and fixed costs shape break-even for a drug testing service.

Lean Base Full

Monthly revenue Revenue sets the margin pool that covers fixed costs. $ Lower sales Higher sales Variable expenses These are direct costs that rise with each test, like lab fees and collection supplies. $ Lower direct Higher direct

Money available to cover fixed costs $70,160 $87,700 revenue - $17,540 variable expenses

Margin ratio

80%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base your margin must cover before profit starts. $ Lower fixed Higher fixed

Break-even chart Revenue Total costs

Which drug testing service expenses are fixed, and which move with sales?

Cost classification

Use fixed overhead in the break-even numerator and volume-linked expenses in contribution margin. In the first year, lab fees at 12.0% and kits at 4.0% move with tests, while recurring overhead totals $8,600/month.

Expense	Cost	Break-Even Treatment	Common Mistake
Collection Site Rent	Fixed	Include $3,500/month in fixed overhead from Month 1 through Month 60.	Spreading rent per test and hiding the burden of slow months.
Mobile Fleet Lease	Fixed	Include $1,200/month in fixed overhead because the lease does not change with each test.	Treating the lease like fuel or mileage tied to mobile visits.
Laboratory Analysis Fees	Variable	Deduct 12.0% of first-year revenue before calculating contribution margin.	Treating lab fees as overhead instead of a per-test pass-through expense.
Collection Kit & Consumables	Variable	Deduct 4.0% of first-year revenue because kits and supplies rise with collection volume.	Budgeting one flat supply amount even as test volume grows.
Mobile Fleet Operating Costs	Variable	Deduct 2.5% of first-year revenue for usage-linked mobile collection activity.	Combining fleet operating expense with the fixed vehicle lease.
Client Portal & Data Processing Fees	Variable	Deduct 1.5% of first-year revenue for transaction-linked portal and processing activity.	Leaving processing fees out of contribution margin.
Client Service Rep Capacity	Semi-fixed	Add payroll in hiring steps as capacity grows from 1.0 FTE in the first year to 4.0 FTE in the fifth year.	Scaling support labor perfectly per test instead of adding people in blocks.
Collector Labor Overtime	Semi-variable	Model base staffing separately, then add extra shifts or overtime when collection volume exceeds normal capacity.	Putting all collector labor into fixed overhead and missing peak-volume strain.

How does break-even change from a lean launch to a base case and a full operating case for this drug testing service?

Scenario table

Higher volume and better spread of fixed costs lift the margin cushion fast. Lean launch sits near the line, base adds stability, and full scale gives the widest buffer.

Planning assumptions only; actual break-even can move with client mix, pricing, staffing, and utilization.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$664K	$133K	$451K	80%	$81K	Lean launch stays close to break-even, so any slow client ramp cuts cushion fast.
Base employer account case	$2,596K	$467K	$803K	82%	$1,326K	Base scale gives a solid cushion and better cover for fixed costs.
Full utilization case	$6,979K	$1,117K	$1,336K	84%	$4,527K	Full scale has the strongest break-even buffer and can absorb mix swings better.

What breaks the break-even plan for this drug testing service?

Stress test

The base plan has about a $101K cushion, but it’s not wide. A 15% revenue miss or a modest cost bump can wipe out the Month 2 break-even and push the launch back into loss.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$563K	$101K cushion	The launch clears break-even, but the cushion is only moderate.
Revenue shortfall	Year 1 revenue comes in 15% below plan.	$563K	$1K cushion	A small demand miss nearly wipes out break-even.
Fixed-cost pressure	Monthly fixed costs run 10% above plan.	$620K	$44K cushion	Higher rent, payroll, or overhead cut the cushion fast.
Margin pressure	Variable expenses rise from 20% to 25% of revenue.	$601K	$63K cushion	Lab, kit, fleet, and portal cost inflation shrinks the spread.
Combined pressure	Revenue falls 15%, fixed costs rise 10%, and variable expenses rise to 25%.	$661K	$97K gap	Demand and cost pressure together can push Month 2 back into loss.

Can you prove the first break-even run before you sign the lease and hire the opening team?

Founder checklist

Don’t lock in the lease or add the opening hires until the model can carry the first break-even run. For this service, that means covering about $45.1K a month in fixed load, funding $941K at launch, and proving the opening volume can hold through the Month 2 cash trough.

1Lease load$3.5K/mo

Verify the collection site can absorb the $3,500 monthly rent before you commit, because this cost starts on Month 1.

2Fixed load$45.1K/mo

Verify Year 1 payroll of about $36.5K per month plus $8.6K of non-wage overhead fits the break-even path before you hire.

3Unit margin80% CM

Verify direct costs stay near 20% of revenue, so each test still leaves enough contribution to cover rent, payroll, and admin.

4Launch reserve$941K

Verify you can fund the $142K launch capex plus the $799K minimum cash trough, or the opening ramp gets stressed fast.

5Staff ramp7.0 FTE

Verify the certified collector, mobile collector, MRO, site lead, and client service workflows can run on the Year 1 staffing plan with lab, chain-of-custody, portal, insurance, and scheduling handoffs locked.

6Opening volume1,260/mo

Verify the launch pipeline can support the Year 1 monthly treatment plan of 1,260 services, or the break-even target stays out of reach.