Break-Even Analysis For Ice Plant: About $926K/Month Needed

Fixed costs $82.1K/mo base payroll + overhead

Contribution margin 89% after variable costs

Break-even revenue $92.7K/mo monthly target

Break-even timing Month 1 launch month

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against the plant's break-even point.

Lean Base Full

Monthly revenue Revenue is the cash coming in before direct costs. $ Lower sales Higher sales Variable expenses These rise with each bag or block sold. $ Lower cost Higher cost

Money available to cover fixed costs $1,729,694 $1,823,542 revenue - $93,848 variable expenses

Margin ratio

95%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly base your margin has to cover. $ Lower fixed Higher fixed

Break-even chart Revenue Total costs

Which ice plant expenses stay fixed, and which move with production or sales?

Cost classification

Break-even is only reliable when fixed overhead is separated from costs that rise with bags, blocks, bulk loads, and delivery volume. Misclassifying electricity, maintenance, or route labor can make Month 1 break-even look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Plant & Office Rent	Fixed	Use $15,000 per month as monthly overhead that must be covered before profit.	Spreading rent per unit and hiding the monthly cash hurdle.
Business Insurance	Fixed	Use $2,500 per month as stable operating overhead from Month 1 to Month 60.	Dropping insurance from break-even because it does not touch production.
Packaging Bag	Variable	Apply $0.08 per Cubed Bag and $0.08 per Crushed Bag produced.	Treating packaging as overhead instead of a per-bag margin drag.
Direct Labor Bagging	Variable	Apply $0.05 per Cubed Bag and $0.05 per Crushed Bag produced.	Blending bagging labor into salaries and overstating contribution margin.
Delivery Fuel	Variable	Apply 4.0% of first-year revenue, then use the forecast rate for later years.	Holding fuel flat while sales volume and routes expand.
Plant Electricity	Semi-variable	Model as production-linked, ranging from 0.4% to 0.6% of revenue by product.	Calling all electricity fixed even though freezing load rises with output.
Plant Maintenance	Semi-variable	Model as usage-linked, ranging from 0.3% to 0.4% of revenue by product.	Ignoring higher wear when bag, block, and bulk volume increase.
Delivery Drivers	Semi-fixed	Add capacity in staffing steps, from 2.0 FTE in the first year to 4.0 FTE by Year 5.	Treating route labor as fully fixed when delivery coverage scales.

How does break-even shift across lean, base, and full ice plant cases?

Scenario table

Break-even improves as volume rises and delivery fuel drops from 4.0% in Year 1 to 3.0% in Year 5. That lifts the margin and gives the plant more cushion above fixed overhead.

Planning view only: these figures use model assumptions, not guaranteed demand or pricing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch floor	$92.6k	$10.5k	$82.1k	88.7%	$0	Barely covers fixed overhead.
Year 1 base case	$1.318m	$149.6k	$82.1k	88.7%	$1.086m	Comfortable cushion if Year 1 volume lands.
Year 5 mature case	$2.370m	$235.8k	$103.0k	90.0%	$2.031m	Best cushion as fuel falls and overhead spreads.

What pressures the ice plant’s break-even buffer?

Stress test

Year 1 revenue is about $1.318M a month versus $926K break-even, so the base plan has a $392K cushion. That cushion depends on contribution margin, meaning sales left after variable costs, staying intact.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$926K	$392K cushion	Healthy buffer, but power spikes or spoilage can still bite.
Revenue shortfall	Year 1 revenue falls 25% from lower wholesale orders and more spoilage.	$926K	$63K cushion	A mid-20s sales miss leaves only a thin buffer.
Fixed-cost pressure	Monthly fixed costs rise by $10K from rent, insurance, or support costs.	$937K	$381K cushion	Extra overhead cuts straight into the monthly cushion.
Margin pressure	Contribution margin drops 1 point from higher power, packaging, or freezer repairs.	$937K	$381K cushion	Power and packaging inflation push break-even up fast.
Combined pressure	Year 1 revenue falls 30% while monthly fixed costs rise $10K and contribution margin drops 1 point.	$948K	$26K gap	Demand slippage plus cost creep can push the plant below break-even.

What should you verify before signing the lease or buying ice-making equipment?

Founder checklist

Don’t sign the lease or place equipment deposits until the plant clears utility, capacity, and wholesale demand checks. Test those commitments against the Year 1 mix, 88.7% contribution margin, $82.1K monthly fixed load, and $1.17M minimum Month 1 cash.

1Wholesale demand2.65M units

Verify wholesale accounts can absorb Year 1 output of 2.65M mixed units before you lock in the site, because break-even only works if the volume is real.

2Utility fitPower + water

Confirm electric service can run the plant, storage freezers, packaging machinery, and backup generator, and that water supply, treatment, drainage, and testing are ready before you pay deposits.

3Capacity crew11 FTE

Verify freezer space and truck capacity can move Year 1 output of 2.65M units, and make sure the 11-FTE staffing plan is in place so production and delivery don’t stall.

4Fixed load$82.1K/mo

Here’s the quick math: $82.1K of monthly fixed load means about $92.6K in monthly revenue just to break even, so the signed account base has to cover that from day one.

5Unit margin88.7% CM

Contribution margin (sales left after variable costs) needs to stay near 88.7% after packaging, labor, fuel, and commissions, or the break-even line moves up fast.

6Cash cushion$1.17M min

Verify you can fund the $2.69M capex build and still keep at least $1.17M cash in Month 1, because that is the minimum reserve the model needs before launch.