Engine Repair Shop Break-Even Point: $48K Monthly Revenue

Fixed costs $34.0K/mo Core monthly base

Contribution margin 71% After variable costs

Break-even revenue $47.9K/mo Monthly target sales

Break-even timing Month 19 Forecast breakeven

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for an engine repair shop.

Lean Base Full

Monthly revenue Revenue is the cash in that pays direct costs and helps cover overhead. $ Low sales High sales Variable expenses Parts, fluids, overtime, and campaign spend rise with repair volume. $ Low direct cost High direct cost

Money available to cover fixed costs $87,755 $120,702 revenue - $32,947 variable expenses

Margin ratio

73%

Covers fixed costs

Yes

Fixed monthly costs Rent, payroll, insurance, and admin overhead must be covered each month. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which engine repair shop expenses stay fixed, and which move with sales?

Cost classification

Break-even gets reliable only when fixed capacity and job-level costs are split cleanly. Treat parts, fluids, and overtime as volume-driven, but keep core shop payroll and rent in the monthly base.

Expense	Cost	Break-Even Treatment	Common Mistake
Workshop Rent & Utilities	Fixed	Use $7,500/month in the fixed overhead base for the normal planning range.	Spreading rent per job and hiding the true monthly hurdle.
Property & Liability Insurance	Fixed	Use $800/month as fixed overhead before counting any job contribution.	Leaving insurance out because it does not touch the repair order.
Core Staffed Capacity Payroll	Fixed	Include the $85,000 lead technician, two $65,000 technicians, $50,000 service advisor, and 0.5 apprentice at $40,000 as staffed capacity.	Treating all technician labor as variable and overstating margin.
Engine Parts & Components	Variable	Model at 20.0% of first-year revenue, then reduce with the forecast percentages.	Treating parts markup as pure profit and ignoring warranty rework.
Specialized Consumables & Fluids	Variable	Model at 3.0% of first-year revenue because fluids and shop supplies rise with jobs.	Calling small supplies immaterial and letting gross margin drift.
Technician Overtime & Performance Bonuses	Variable	Model at 4.0% of first-year revenue, tied to repair volume and peak workload.	Forgetting overtime when bays are full and jobs run late.
Waste Disposal & Environmental Fees	Semi-variable	Use the $300/month base, then add volume-linked disposal charges when engine work increases.	Locking disposal at $300/month even when parts, fluids, and waste rise.
ASE Certified Technician Staffing	Semi-fixed	Add payroll in steps as capacity grows from two technicians in the first year to higher planned staffing.	Assuming one more technician creates smooth, instant break-even improvement.

How does break-even change from lean to base to full shop operations?

Scenario table

Break-even shifts with monthly volume because fixed costs stay near $34,000. Lean months fall short fast, the base case reaches break-even at about $47,887 in monthly revenue, and the full case builds a clear cushion.

Planning figures only. Actual break-even moves with technician mix, parts cost, and job volume.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean shop case	$25,107	$7,281	$34,000	71%	-$16,174	Below break-even; fixed overhead still wins.
Base shop case	$47,887	$13,887	$34,000	71%	$0	First break-even point; any slip below this turns negative.
Full mature shop case	$101,877	$29,544	$34,000	71%	$38,333	Comfortable cushion; higher throughput covers overhead.

What breaks the break-even plan for this engine repair shop?

Stress test

The shop breaks even at about $47,887 a month in the base case. That’s tight: 29% of revenue goes to variable costs, so any slip in bookings, parts pricing, or payroll pushes the Month 19 break-even out.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$47,887	$0 gap	There is no cushion in the base case.
Revenue shortfall	Monthly revenue lands 10% below the base plan.	$47,887	$4,789 gap	Fewer rebuild wins or slower closes eat the monthly target fast.
Fixed-cost pressure	Monthly fixed costs rise 10% to about $37,400.	$52,676	$4,789 gap	Rent or technician payroll increases add straight to the revenue target.
Margin pressure	Variable expense rises from 29% to 34% of revenue.	$51,515	$3,628 gap	Parts inflation, warranty rework, or paid leads can erase margin fast.
Combined pressure	Fixed costs rise 10% and variable expense rises to 34% of revenue.	$56,667	$8,780 gap	Higher payroll and weaker margin push breakeven well past the launch target.

What should you verify before signing the lease and buying major equipment for this engine repair shop?

Founder checklist

Do not sign the lease or buy the lifts until booked work can support the $34,000 monthly fixed-cost base and you have enough cash to carry the Month 19 gap. The model needs about $48,000 in monthly bookings before break-even is believable, plus $571,000 in minimum cash.

1Demand proof$48K/mo

Verify booked or repeat work can reach about $48,000 a month, or the shop will miss the break-even line.

2Fixed load$34K/mo

Confirm rent, wages, insurance, and overhead really hold near $34,000 a month before the first jobs land.

3Contribution71% CM

Parts and consumables take 23% in Year 1, and overtime plus marketing add 6%, so about 71% is left before fixed overhead.

4Equipment plan$127K

Verify the scan tools, lifts, hoists, hand tools, compressor, storage, IT, and HVAC spend totals $127,000 and the bay fits two lifts.

5Cash cushion$571K

Fund working capital to the $571,000 minimum cash need, because the model turns cash negative long before the Month 19 break-even point.

6Launch timingMonth 19

Make sure your opening pipeline can hold through Month 19, because the model does not reach break-even before then.