Martial Arts Gym Break-Even Analysis: $267K Monthly Revenue Target

Fixed costs $8.9K Monthly overhead

Contribution margin 84% After variable costs

Break-even revenue $10.6K Monthly revenue target

Break-even timing Month 1 Launch month

Break-even calculator

Test whether monthly revenue can cover variable costs and the fixed cost base for a martial arts gym.

Lean Base Full

Monthly revenue Revenue must cover both variable costs and fixed costs each month. $ Lower sales Higher sales Variable expenses These are direct costs that rise as classes, merch, and sessions grow. $ Lower costs Higher costs

Money available to cover fixed costs $42,146 $48,500 revenue - $6,354 variable expenses

Margin ratio

87%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the gym must cover before profit. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which martial arts gym expenses are fixed, variable, semi-variable, or semi-fixed for break-even?

Cost classification

Break-even gets unreliable when rent, payroll, usage spend, and revenue-linked items are mixed together. Classify each line once, so the model shows how many memberships must cover true monthly overhead.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Lease	Fixed	Include $6,000/month in monthly overhead.	Tying rent to active students.
Instructor Payroll	Semi-fixed	Use current full-time equivalent payroll, about $13.5k/month in the first year, then add hires as capacity steps.	Treating every instructor dollar as variable.
Merchandise Cost	Variable	Apply 3.0% of revenue in the first year.	Booking both inventory purchases and percentage expense.
Guest Instructor Fees	Variable	Apply 2.0% of revenue in the first year.	Adding guest fees again as fixed overhead.
Marketing & Promotion	Variable	Apply 8.0% of revenue in the first year.	Locking it as a flat monthly spend.
Training Equipment Consumables	Variable	Apply 3.0% of revenue in the first year.	Mixing consumables with one-time equipment purchases.
Utilities	Semi-variable	Include the $1,200/month baseline, then review usage as class volume rises.	Assuming utilities stay flat at higher occupancy.
Business Software	Fixed	Include $250/month in monthly overhead.	Scaling software as a percent of sales.

How does break-even change from a lean start to a full class schedule?

Scenario table

As the gym adds members, sessions, and class coverage, revenue rises faster than variable cost, but payroll and facility load also climb. So the break-even line gets safer only if fill rate stays ahead of fixed overhead.

Planning figures only. These are researched assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1	$19.0k	$3.0k	$18.7k	84.2%	-$2.7k	Still below break-even, so the model needs more fill or lower overhead.
Base Year 2	$29.3k	$4.3k	$23.1k	85.5%	$1.9k	Near break-even with a thin cushion, so retention and schedule mix matter.
Full Year 3	$40.4k	$5.3k	$27.6k	86.8%	$7.5k	Above break-even with room to absorb dips, if mat and instructor capacity hold.

What breaks the break-even plan for this martial arts gym?

Stress test

The base plan has thin room for error. At an 84% contribution margin, a 10% revenue miss, a 10% overhead jump, or a move to 80% margin can push break-even above plan fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; 84% contribution margin and $224k overhead.	$267k	$0 cushion	No cushion means small misses hit cash fast.
Revenue shortfall	Year 1 revenue falls 10% to $205k.	$267k	$62k gap	A small sales miss leaves a material gap.
Fixed-cost increase	Overhead rises 10% to $247k.	$294k	$27k gap	Lease or payroll inflation raises the bar quickly.
Margin pressure	Variable expenses rise to 20% of revenue.	$281k	$14k gap	Higher promo or guest fees eat the cushion.
Combined pressure	Revenue falls 10% and overhead rises 10%.	$294k	$89k gap	This is the warning zone before adding more instructor hours.

What should you verify before signing the lease and hiring instructors for a martial arts gym?

Founder checklist

Only sign the lease and buy mats if the model still works at 140 Year 1 members, about $22.4K of monthly fixed overhead before taxes and debt, and a $911K cash floor. If any of those slip, break-even gets thin fast.

1Demand Base140 members

Check that Year 1 demand really lands at 140 members plus $2.0K a month from private sessions, because the model only works if sales show up before heavy payroll.

2Lease Load$6.0K/mo

Verify the space fits the class schedule at $6,000 rent, because the room has to support the plan without pushing fixed costs above what the membership base can carry.

3Margin Stack84% CM

Here’s the quick math: with 16% of revenue going to merchandise, guest instructor fees, marketing, and training consumables in Year 1, break-even revenue is about $26.7K a month.

4Payroll Ramp3.0 FTE

Confirm the Year 1 staffing base of owner, senior instructor, junior instructor, and admin coverage can handle classes, and delay the Month 13 marketing hire until demand is proven.

5Cash Floor$911K cash

Keep the opening cash cushion at the model’s $911K minimum and treat the $79K build-out and equipment spend as separate from operating break-even.

6Launch ReadyMonth 1

Make sure waivers, insurance, cleaning, payment software, and enrollment flow are ready on day one, or early leads will leak before they become paying members.