Junkyard Break-Even Analysis: $45K Monthly Revenue Target

Fixed costs $36.9K/mo Payroll plus overhead

Contribution margin 82% After variable costs

Break-even revenue $44.9K/mo Monthly target

Break-even timing Month 13 Launch-year breakeven

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against the break-even line for a junkyard.

Lean Base Full

Monthly revenue Revenue sets the pool that must cover variable and fixed costs. $ Low sales High sales Variable expenses These are direct costs that rise with scrap and parts sales. $ Lean costs Heavy costs

Money available to cover fixed costs $64,289 $77,550 revenue - $13,261 variable expenses

Margin ratio

83%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base contribution margin must cover. $ Lower burn Higher burn

Break-even chart Revenue Total costs

Which junkyard expenses are fixed and which move with sales?

Cost classification

Break-even is only useful if yard overhead stays separate from unit-driven vehicle and parts costs. In the first operating year, revenue is $555,000, so a 12.0% vehicle acquisition rate equals $66,600 before fixed overhead.

Expense	Cost	Break-Even Treatment	Common Mistake
Yard Lease Payment	Fixed	Use $8,000 per month in overhead.	Tying the lease to vehicle volume.
Utilities Electricity Water Gas	Semi-variable	Start with $1,500 per month and stress-test higher usage.	Treating all utility spend as fixed forever.
Waste Disposal Services	Fixed	Include the $1,000 per month base service.	Confusing base service with percentage disposal fees.
Business Insurance	Fixed	Include $750 per month in monthly break-even overhead.	Leaving insurance out of the break-even model.
Accounting & Legal Retainer	Fixed	Include $1,200 per month for recurring compliance support.	Burying ongoing compliance support in startup costs only.
Vehicle Acquisition Costs	Variable	Use 12.0% of first-year revenue, or $66,600 annually.	Counting vehicle buys as fixed overhead.
Environmental Disposal Costs	Variable	Use 4.0% of first-year revenue, or $22,200 annually.	Ignoring fluids and hazardous waste handling.
Wages	Semi-fixed	Use $22,500 per month in Year 1 and step up by staffing plan.	Assuming payroll flexes perfectly with sales.

How does break-even change as the junkyard moves from a lean first-year yard to a scaled base case and then a full-yard build?

Scenario table

Break-even gets easier as revenue scales faster than fixed overhead, and the margin rate improves from lean to full. The Month 13 break-even point shows the first year is still the tightest stretch.

Planning assumptions only; actual break-even will shift with vehicle mix, disposal load, and parts demand.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 yard	$463k	$83k	$369k	82%	$11k	Thin cushion; a small miss can push break-even out.
Base Year 3 scaled yard	$1.26M	$202k	$423k	84%	$635k	Strong cushion; proven parts demand supports break-even.
Full Year 5 yard	$2.33M	$326k	$519k	86%	$1.485M	Wide cushion; high throughput and steady sourcing keep risk low.

What breaks the junkyard break-even plan first?

Stress test

Year 1 is tight: $463k of revenue sits only about $13k above the $449k break-even point. A sales drop above 28%, or a small lift in lease, labor, or disposal costs, can wipe out the cushion fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$449k	$13k cushion	Very thin Year 1 cushion.
Revenue shortfall	Total revenue falls 28% from the base plan.	$449k	$116k gap	Slow parts turns wipe out the cushion.
Fixed-cost pressure	Lease, utilities, and labor rise by $11k per month.	$610k	$147k gap	Overhead growth outruns launch sales.
Margin pressure	Variable costs rise to 20.3% of revenue.	$462k	$1k cushion	One small margin slip leaves almost no buffer.
Combined pressure	Revenue falls 28% and overhead rises $11k per month.	$628k	$295k gap	Lower parts sales plus higher costs is the harshest case.

What should you verify before signing the yard lease and buying the first vehicles?

Founder checklist

Test the plan against the break-even drivers before you lock in the lease, capex, and hiring. If the first-year demand, sourcing costs, and cash runway do not hold, the yard will miss Month 13 break-even.

1Used parts demand$450K

Verify Year 1 used auto parts can really move, because they drive $450,000 of the $555,000 revenue plan and set the break-even floor.

2Fixed load$36.9K/mo

Check that the $8,000 yard lease, utilities, waste, insurance, security, admin, and Year 1 payroll fit inside about $36,850 a month before variable costs.

3Vehicle sourcing12.0%

Lock in vehicle supply before opening, because Year 1 vehicle acquisition costs are modeled at 12.0% of sales and a bad buy feed will crush margin.

4Disposal flow4.0%

Confirm disposal partners and fluid handling now, since the plan assumes 4.0% environmental disposal costs and a $25,000 drainage system in the first months.

5Staffing ramp$22.5K/mo

Staff to the Year 1 load of 4.5 FTE, or about $22,500 a month, and do not add Year 3 headcount until the yard can support about $126,000 in monthly revenue.

6Cash runway$652K

Protect cash through Month 13, because the model's minimum cash need is $652,000, break-even lands in Month 13, and startup capex totals $280,000.