Lottery Ticket Retail Break-Even Analysis: $196K Monthly Revenue

Fixed costs $17.6K Opening cost base

Contribution margin 90% After variable fees

Break-even revenue $19.6K Monthly target

Break-even timing Month 6 Launch ramp point

Break-even calculator

Test whether monthly revenue can cover direct costs and then the fixed monthly cost base.

Lean Base Full

Monthly revenue Revenue is what pays direct costs and overhead. $ Lower sales Higher sales Variable expenses Direct costs tied to sales, like fees and supply costs. $ Lower direct cost Higher direct cost

Money available to cover fixed costs $28,100 $33,250 revenue - $5,150 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

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

Break-even chart Revenue Total costs

Which lottery ticket retail expenses are fixed, and which move with sales?

Cost classification

Classifying costs correctly makes the Month 6 break-even test more reliable. Rent and core payroll set the monthly hurdle, while supplies and banking fees move with commission revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Retail Space Lease	Fixed	Model $3,500 per month as the base rent hurdle from Month 1 through Month 60.	Treating rent as volume-based because weekend traffic is higher.
Security and Monitoring Services	Fixed	Include $450 per month before calculating contribution needed to break even.	Ignoring security renewal or monitoring fees in the monthly overhead run rate.
Insurance and Liability	Fixed	Use $300 per month as recurring overhead, not a per-ticket charge.	Leaving insurance out because it does not track daily visitor counts.
Store Manager Salary	Fixed	Model 1.0 FTE at $55,000 per year as core payroll needed to operate the store.	Treating all payroll as Variable and understating the break-even revenue floor.
Part Time Sales Associate	Semi-fixed	Model staffing in steps: 1.5 FTE in the first two years, then 2.0 FTE in Year 3.	Smoothing headcount as a clean percentage of sales instead of adding coverage in jumps.
Utilities and Internet	Semi-variable	Start with the $600 monthly base, then review usage if store hours or terminal activity expands.	Assuming the full bill is fixed when longer hours can raise usage.
Lottery Supply Consumables	Variable	Apply 4.0% of revenue in the first year, falling to 2.0% by Year 5.	Mixing ticket face value with commission revenue and overstating supply load.
Transaction and Banking Fees	Variable	Apply 6.0% of revenue in the first year, falling to 4.0% by Year 5.	Forgetting cash handling and banking fees when sales volume rises.

How does break-even change across lean, base, and full lottery retail cases?

Scenario table

Traffic and mix drive the gap: 82% visitor-to-buyer conversion in Year 1, plus a 55% scratch-off mix and 35% draw-game mix, lift contribution faster than fixed costs. So break-even stays near $20K a month while profit cushion widens.

Planning cases only. Actual results will move with traffic, game mix, staffing, and fees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean lottery counter	$33.3K	$3.3K	$17.6K	90%	$10.5K	Revenue is about 1.7x break-even, so the lean case still has a slim cushion.
Base lottery store	$108.2K	$9.7K	$17.6K	91%	$78.6K	Revenue is far above break-even, so this is the core profitable case.
Full lottery retail store	$383.3K	$30.7K	$18.9K	92%	$330.8K	Higher staffing nudges fixed cost up, but the revenue cushion is very wide.

What can push this lottery ticket store below break-even?

Stress test

Year 1 has about $33,250 of monthly revenue against $17,600 of fixed costs and 10% variable expense, so break-even lands near $19,556. That leaves about $13,694 of cushion, but weaker traffic, extra staffing, or higher fees can chew through it fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$19,556	$13,694 cushion	Healthy cushion, but traffic still has to hold.
Revenue shortfall	Monthly traffic falls 15% from the Year 1 plan.	$19,556	$8,707 cushion	Friday and Saturday softness eats the margin of safety.
Fixed-cost pressure	Add one part-time associate equivalent, lifting fixed costs by about $2,667 a month.	$22,519	$10,731 cushion	Payroll overcoverage narrows the cushion fast.
Margin pressure	Contribution margin falls to 52% as fees and supply costs rise.	$33,846	$596 gap	At this point, Year 1 revenue no longer covers overhead.
Combined pressure	Traffic falls 15%, one part-time associate stays on, and contribution margin falls to 52%.	$38,974	$10,712 gap	Weak traffic and thinner commissions push the store below break-even.

Can this lottery counter clear break-even before you commit to the lease?

Founder checklist

Don’t sign the lease until the license path, site approval, and cash plan line up with the model. Here’s the quick math: the store carries about $17.6K in monthly fixed costs, needs $822K minimum cash in Month 2, and shouldn’t add staff before $196K in monthly commission revenue.

1Lease gateBefore signing

Verify the retailer license path, site approval, and weekday traffic before you commit, because the location has to support the $3,500 rent and enough buyers to make the counter work.

2Fixed load$17.6K/mo

Here’s the quick math: $3,500 rent, $450 security, $600 utilities, $800 marketing, $300 insurance, $200 maintenance, and $141K in annual wages total about $17.6K a month, so any rent jump hits break-even fast.

3Cash floor$822K

Keep the opening cash reserve at or above the $822K minimum in Month 2, because that is the model’s low point and a smaller cushion leaves no room for a slow ramp or a delayed opening.

4Buildout$81.5K

Tie the opening schedule to the $81.5K capex plan for renovation, security, POS hardware, interior displays, and exterior signage, and do not open the counter until those pieces are installed and tested.

5Margin mix90% CM

Lock the mix at 55% scratch-off commissions, 35% draw-game commissions, and 10% ticket-cashing fees, then hold variable costs to 4% supply consumables and 6% transaction and banking fees so the store keeps about 90% of revenue before payroll.

6Staff ramp$196K/mo

Keep Year 1 coverage at one manager, one senior clerk, and 1.5 part-time FTE, and wait to hire beyond launch coverage until monthly commission revenue reaches about $196K, which is the break-even test point.