Guava Farming Break-Even Analysis: $26K Monthly Sales in Year 1

Fixed costs $33.0K/mo Monthly overhead base

Contribution margin 83% Sales kept after costs

Break-even revenue $39.8K/mo Monthly sales target

Break-even timing Month 4 First positive month

Break-even calculator

Test how monthly guava revenue, direct costs, and fixed farm costs compare with break-even.

Lean Base Full

Monthly revenue Revenue drives the cash left to cover direct costs and overhead. $ Low sales High sales Variable expenses These are direct costs that rise with harvest, packing, and distribution. $ Low costs High costs

Money available to cover fixed costs $39,890 $47,263 revenue - $7,373 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead and payroll the farm must cover. $ Small base Large base

Break-even chart Revenue Total costs

Which guava farm expenses are fixed and which move with sales for break-even?

Cost classification

For this farm, break-even gets reliable only when harvest-linked spend is kept separate from base overhead. Lease, staff, and facility costs set the monthly floor; labor, supplies, and cold chain move with sales.

Expense	Cost	Break-Even Treatment	Common Mistake
Land lease	Semi-fixed	Base it on leased hectares. In the first operating year: 10 hectares × 80% leased × $150/month = $1,200/month.	Treating it like per-box harvest spend.
Farm management software	Fixed	Use $500/month in monthly overhead.	Tying it to yield or harvest volume.
Property insurance	Fixed	Use $1,200/month in monthly overhead.	Dropping it in low-harvest months.
Utilities	Semi-variable	Start with the $800/month facilities load, then add usage-linked irrigation or cold-room power when modeled.	Ignoring irrigation-related usage.
Known salaried farm staff	Semi-fixed	Use $25,000/month in the first operating year based on listed full-time equivalent staffing.	Mixing salaried staff with harvesting labor.
Harvesting labor	Variable	Model at 4.0% of first operating-year revenue.	Classing it as monthly payroll.
Fertilizers and pest management supplies	Variable	Model at 5.0% of first operating-year revenue.	Treating it as fixed overhead.
Logistics and cold chain distribution	Variable	Model at 6.0% of first operating-year revenue.	Ignoring buyer distance and delivery mix.

How does break-even shift from lean to full guava farming?

Scenario table

As the farm moves from 10 to 20 hectares and owned land rises, fixed costs spread over more revenue and the break-even gap narrows. The catch is harvest is seasonal across two months, so cash timing still matters.

Planning assumptions only; guava yields, prices, and harvest timing can move the result.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean guava farm, Year 1	$13,764	$2,340	$21,783	83.0%	-$10,359	Still below break-even by about $12.5k.
Base guava farm, Year 2	$26,512	$4,321	$22,327	83.7%	-$136	Near break-even; only a $163 revenue gap.
Full guava farm, Year 3	$43,482	$6,773	$24,282	84.4%	$12,428	Above break-even with about a $14.7k cushion.

What pushes the guava farm off break-even?

Stress test

Year 2 is the tight spot. With 8% yield loss already built in, break-even sits near $26,512/month, and small moves in harvest loss, fixed costs, or variable costs can push it to about $26,900 or worse.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$26,512	$0 gap	Year 2 is basically at the line.
Revenue shortfall	Yield loss rises above 8%, so harvested volume falls below plan.	$28,818	$2,306 gap	Crop loss is the fastest way to miss break-even.
Fixed-cost increase	Known fixed costs rise from $21,783 to $22,327 per month.	$27,162	$650 gap	Overhead creep removes most of the Year 2 cushion.
Margin pressure	Variable expense runs at 17.0% instead of 16.3%.	$26,900	$388 gap	A small freight or packaging slip is enough to miss.
Combined pressure	Yield loss stays at 8%, and labor, logistics, packaging, or buyer pricing all run worse than plan.	$26,900	$388 gap	There is almost no room for any extra miss.

What should a guava farming founder verify before signing the lease?

Founder checklist

Test the site, water, buyer plan, and cost load before you sign anything. The model reaches break-even fast on paper, but it still shows a $106K cash trough in Month 27, so reserve cash and lease terms matter as much as the orchard itself.

1Site fitClimate + water

Confirm the climate and irrigation source before you lock hectares, because the orchard only works if the site can support guava growth through both harvest windows.

2Cultivar plan40/20/15/10/15

Check nursery stock quality before deposit, then match cultivars to the 40% wholesale, 20% specialty, 15% puree, 10% preserves, and 15% second-tier mix so the fruit fits the buyer plan.

3Buyer lockMonth 4 & 10

Secure buyers before Month 4 and Month 10, because those are the only modeled harvest windows and unsold fruit quickly turns into cold-chain and spoilage risk.

4Unit margin83% CM

Verify that the 17% variable cost stack still leaves enough room after the Year 1 specialty price of $4.00, or the farm will not cover fixed spend fast enough.

5Payroll load$32.2K/mo

Confirm the Year 1 base load of 5.5 FTE and $32.2K a month can be carried through non-harvest months, because lease, payroll, and admin costs keep running when picking stops.

6Cash cushion$106K

Keep reserve cash for the Month 27 low point and do not commit land purchase cash until operating break-even is clear, because the model still goes negative before it stabilizes.