Forestry Break-Even Analysis: Cover Overhead at $103K/Month

Fixed costs $23.3K Monthly overhead base

Contribution margin 80.5% After variable costs

Break-even revenue $29.0K Monthly revenue target

Break-even timing Month 1 Launch month

Break-even calculator

Use this calculator to test monthly timber revenue, direct costs, and fixed overhead against break-even.

Lean Base Full

Monthly revenue Use the monthly timber sales run rate; it sets the margin pool for overhead. $ Early ramp Scaled run rate Variable expenses Use direct costs that move with harvest volume, hauling, and sales effort. $ Light direct costs Heavy direct costs

Money available to cover fixed costs $46,425,000 $54,940,000 revenue - $8,515,000 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs Use monthly overhead the business pays even before extra harvest volume. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which forestry expenses are fixed, and which move with harvest volume?

Cost classification

Break-even is only useful if fixed commitments stay fixed and harvest-linked charges move with revenue. Misclassify payroll, land leases, or hauling fees, and Month 1 break-even can look cleaner than the cash reality.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent and Facilities	Fixed	Use $6,500 per month in overhead before testing harvest volume.	Spreading rent across timber units and hiding the monthly cash burn.
Insurance, General Liability and Property	Fixed	Carry $3,200 per month whether crews harvest or stand down.	Reducing insurance when harvest volume drops, even though coverage still stays due.
Software Licenses and IT Infrastructure	Fixed	Include $4,800 per month as operating overhead for planning, data, and reporting systems.	Treating core systems like optional tools instead of committed monthly overhead.
Subcontractor Logging and Hauling Fees	Variable	Apply 8.5% of first-year revenue because the charge moves with logged and hauled volume.	Budgeting it as a flat vendor bill and missing margin pressure during heavy harvest months.
Field Operations and Data Collection Costs	Variable	Apply 4.5% of first-year revenue to reflect field activity tied to managed acreage and harvest work.	Locking field spend at one monthly number while acreage expands from 500 acres.
Utilities and Communication	Semi-variable	Start with the $1,200 monthly base, then watch usage as field crews, devices, and data traffic rise.	Calling the full amount fixed and ignoring higher usage during active harvest periods.
Salaried Forestry and Operations Team	Semi-fixed	Model payroll in staffing steps; first-year payroll is $671,000 and rises when full-time equivalent headcount increases.	Making salaries fully variable with sales instead of adding people in capacity blocks.
Land Lease Commitment	Semi-fixed	Commit leased acreage in blocks; in the first year, 450 leased acres at $95 per acre equals $42,750 annually.	Treating the lease as fully variable when acreage is committed before the timber sells.

How does break-even change from lean to full forestry scale?

Scenario table

More acres and higher timber volume lift revenue faster than fixed overhead, so the break-even cushion expands as the operation scales. Even then, harvest timing and buyer payment cycles can still delay cash.

Planning assumptions only; harvest timing, buyer demand, and collection speed can change the cash result.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 harvest mix	$417,417	$81,395	$82,779	80.5%	$253,242	Profitable on paper, but the cash cushion is still modest.
Base Year 2 expanded harvest mix	$662,833	$128,653	$104,690	81.7%	$429,491	This is the best fit if land access and buyer commitments hold.
Full Year 3 scaled harvest mix	$938,083	$161,202	$130,204	82.8%	$646,677	Largest cushion, but it needs crew and hauling capacity to keep up.

What breaks the break-even plan in forestry?

Stress test

Here’s the quick math: at 80.5% contribution margin, the base plan reaches Month 1 break-even at $102,831 a month. The plan gets fragile if timber prices slip, hauling runs hot, or harvest timing pushes revenue into later months.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$102,831	$0 gap	Month 1 only breaks even if timing holds.
Revenue shortfall	Early months rely only on wood pellets at $98,325 revenue.	$102,831	$4,506 gap	Harvest slippage creates an immediate cash squeeze.
Fixed-cost pressure	Monthly overhead rises by $100.	$115,231	$12,400 gap	Fixed-cost creep moves break-even up fast.
Margin pressure	Variable expenses rise by 1 percentage point.	$144,570	$41,739 gap	Hauling, fuel, and repairs can wipe out the cushion.
Combined pressure	Wood-pellet-only revenue hits $98,325 and variable expenses rise 1 point.	$149,076	$46,245 gap	Price drops and cost overruns can stack in the same month.

What should you verify before you sign land leases and buy equipment for a forestry operation?

Founder checklist

Before you lock in land, crews, or machines, test the model against land control, harvest timing, and early cash burn. The deal only works if you can hold 500 cultivated acres, keep variable costs near 19.5% of revenue, and fund about $82.8K a month during the ramp.

1Land Access500 acres

Verify control of 500 cultivated acres and keep Year 1 land exposure close to 10% owned and 90% leased, because the capital need shifts fast if that mix changes.

2Buyer Mix5 product lines

Line up buyers for softwood, hardwood, wood pellets, veneer logs, and pulpwood before you scale, or the revenue plan turns into wood you cannot move.

3Cost Load$82.8K/mo

Check that cash can cover about $82.8K in monthly fixed costs during the ramp, because payroll and overhead hit before harvest receipts smooth out.

4Margin Check80.5% CM

Keep variable costs near 19.5% of revenue, which leaves about 80.5% contribution before fixed spend and makes break-even believable.

5Harvest Timing1-3 mo cycles

Match staff and hauling to the harvest calendar, since pellets sell monthly but softwood, hardwood, veneer logs, and pulpwood clear in fewer months.

6Cash Buffer$414K

Hold at least $414K of cash at launch, because the model's minimum cash lands in Month 1 and the opening gap is the main failure point.