Lumber Yard Break-Even Analysis: $72K Monthly Revenue Target

Fixed costs $58.5K/mo Overhead plus payroll

Contribution margin 81.5% After variable costs

Break-even revenue $71.8K/mo Monthly sales needed

Break-even timing Month 14 Model breakeven point

Break-even calculator

Use this calculator to see how monthly revenue, variable expenses, and fixed costs drive break-even for a lumber yard.

Lean Base Full

Monthly revenue Gross sales before expenses. This drives the margin available to cover fixed costs. $ Lower sales Higher sales Variable expenses Direct costs like inventory, freight, and sales pay that move with sales. $ Lower costs Higher costs

Money available to cover fixed costs $30,000 $70,000 revenue - $40,000 variable expenses

Margin ratio

43%

Covers fixed costs

$28,500 short

Fixed monthly costs Monthly overhead the business must cover before profit starts. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which lumber yard expenses are fixed, variable, semi-variable, or semi-fixed for break-even?

Cost classification

Break-even gets reliable only when fixed overhead stays separate from costs that move with sales. For this lumber yard, freight, fuel, material purchases, and commissions should flex with revenue, while lease and core overhead set the monthly hurdle.

Expense	Cost	Break-Even Treatment	Common Mistake
Lumber Yard Lease	Fixed	Use $15,000 per month from Month 1 through Month 60 as fixed overhead.	Spreading rent across units and making it rise with sales.
Core Payroll	Fixed	Use about $36,700 per month in the first year based on $440,000 annual wages.	Treating all payroll as variable labor tied to each order.
Utilities	Semi-variable	Start with the $2,500 monthly base, then review usage as traffic and yard activity rise.	Locking utilities as fixed even when usage grows with volume.
Wholesale Material Purchases	Variable	Model as 12.0% of sales in the first year, falling to 10.0% by the fifth year.	Treating inventory purchases as fixed overhead instead of sales-linked.
Freight Inbound	Variable	Apply 2.0% of sales in the first year, declining to 1.6% by the fifth year.	Leaving freight in fixed overhead and overstating contribution margin.
Delivery Fuel & Maintenance	Variable	Use 2.5% of sales in the first year, tapering to 2.1% by the fifth year.	Ignoring fuel and maintenance when delivery volume increases.
Sales Commissions	Variable	Use 2.0% of sales in the first year, declining to 1.6% by the fifth year.	Budgeting commissions as a flat monthly selling expense.
Delivery Driver Capacity	Semi-fixed	Add drivers in staffing steps as order volume grows from 2.0 FTE in the first year to 4.0 FTE by the fifth year.	Assuming delivery labor scales smoothly with each sale.

How does break-even shift from a lean launch to a full-service lumber yard?

Scenario table

Lean launch breaks even at about $717k, base at about $879k, and full-service at about $995k. The margin improves as specialty wood and delivery fees rise, but higher payroll and overhead still push the break-even line up.

Planning cases only; these are model-based break-even estimates, not a sales promise.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$717k	$133k	$585k	81.5%	$0	Lowest overhead, but the cushion is thin.
Base case	$879k	$149k	$731k	83.1%	$0	Balanced case; break-even still depends on steady traffic.
Full-service case	$995k	$152k	$843k	84.7%	$0	Better mix helps, but payroll keeps break-even high.

What pushes the lumber yard break-even plan off track?

Stress test

The plan is most exposed to margin squeeze and overhead creep. If lumber prices, inbound freight, shrink, or payroll rise before sales density improves, break-even moves up fast and the cushion disappears.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; fixed costs stay at $585k and contribution margin stays at 81.5%.	$717k	$0 gap	The model clears break-even only at this sales level.
Revenue shortfall	Monthly sales land 10% below break-even, to about $646k.	$717k	$71k gap	That miss leaves about a $58k operating loss.
Fixed-cost increase	Fixed costs rise 10% from the base plan.	$789k	$72k gap	Overhead creep adds about $72k of monthly revenue needed.
Margin pressure	Variable expenses rise 5 points, from 18.5% to 23.5% of sales.	$764k	$47k gap	Lower margin from lumber, freight, or shrink cuts the cushion.
Combined pressure	Fixed costs rise 10% and variable expenses rise 5 points.	$840k	$123k gap	Cost pressure this size needs much stronger sales density.

Before you sign the lease, can this lumber yard clear break-even fast enough?

Founder checklist

If the opening mix can’t clear about $71.8K a month, the yard will miss Month 14 break-even. Keep at least $393K in reserve through the ramp, because Year 1 EBITDA is still negative.

1Traffic Test$74K/mo

Check that weekday and Saturday traffic can really convert at 15% and produce about $74K a month, because the modeled break-even revenue is roughly $71.8K a month.

2Lease Load$58.5K/mo

Do not commit to the $15K rent until the opening plan can absorb the full $58.5K monthly fixed load, because that is the cost base before you sell a single board.

3Margin Mix81.5% CM

Verify the product mix and supplier terms keep contribution margin at 81.5%, the share left after variable costs, because a few points lost on material or freight pushes break-even out.

4Staff Cover9.0 FTE

Confirm the opening team can cover 9.0 FTE without overtime spikes, because the model steps up to 11.0 FTE in Year 2 and payroll is already about $36.7K a month.

5Cash Reserve$393K

Keep at least the modeled $393K cash reserve through Month 14, because EBITDA is still negative by $336K in Year 1 and the business does not hit breakeven until Month 14.

6Build Order$222K

Stage the $222K capex in order—forklift, truck, racking, paving, fencing, cameras, and platform setup—so you do not spend ahead of traffic or get stuck with a broken yard layout.