Medical Equipment Break-Even Analysis: $448K Monthly Revenue

Fixed costs $36.3K/mo Payroll plus overhead

Contribution margin 81% After variable costs

Break-even revenue $44.8K/mo Monthly revenue target

Break-even timing Month 17 Model break-even point

Break-even calculator

Use this calculator to test monthly revenue against variable expenses and fixed monthly costs for a medical equipment business.

Lean Base Full

Monthly revenue Revenue sets how much margin is available to cover fixed costs. $ Lower sales Higher sales Variable expenses These are direct costs like equipment sourcing, logistics, and sales support that rise with sales. $ Lower direct costs Higher direct costs

Money available to cover fixed costs $9,800 $12,000 revenue - $2,200 variable expenses

Margin ratio

82%

Covers fixed costs

$26,450 short

Fixed monthly costs This is the monthly overhead your contribution margin must cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which medical equipment expenses stay fixed, and which move with sales?

Cost classification

Break-even is only reliable when fixed overhead stays separate from revenue-linked costs. In the first operating year, the model carries 19% variable expense against revenue, so misclassifying one large line can move the Month 17 break-even target.

Expense	Cost	Break-Even Treatment	Common Mistake
Warehouse Rent	Fixed	Use $4,000 per month in fixed overhead through the relevant planning range.	Linking rent to order volume instead of capacity.
Platform Hosting & Maintenance	Fixed	Use $2,500 per month as recurring overhead from Month 1 to Month 60.	Treating core hosting as a per-order technology fee.
Direct Equipment Acquisition	Variable	Apply 8% of first-year revenue, falling to 6% by the mature year.	Using one flat equipment margin across all years.
Rental Equipment Refurbishment	Variable	Apply 2% of first-year revenue for usage-driven cleaning, repair, and reconditioning.	Parking refurbishment in fixed overhead and hiding margin drag.
Logistics & Fulfillment	Variable	Apply 5% of first-year revenue for delivery and fulfillment activity tied to orders.	Modeling delivery as fixed even when order count rises.
Marketing & Sales Commissions	Variable	Apply 4% of first-year revenue, then reduce as the model scales.	Counting commissions as fixed payroll instead of sales-linked expense.
Medical Equipment Technician staffing	Semi-fixed	Add salary in steps as capacity is reached; one FTE is $60,000 annually.	Spreading added technicians smoothly instead of modeling hiring jumps.
Delivery surges above normal routing	Semi-variable	Keep the base route plan separate, then add surge expense when delivery volume exceeds normal capacity.	Ignoring peak delivery loads until gross margin looks too high.

How does break-even shift from a lean launch to full scale in medical equipment?

Scenario table

Break-even moves up fast as payroll, warehouse space, and service capacity scale. In this model, Month 17 is the turn point: Year 1 is -$349K EBITDA, Year 2 is $88K, and Year 3 reaches $2.634M.

Planning assumptions only; actual results will move with mix, utilization, staffing, and inventory turnover.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$448K	$85K	$363K	81%	$0	Thin cushion; a small miss in volume pushes this negative.
Base operating	$562K	$101K	$461K	82%	$0	Month 17 is the turning point, so overhead control matters.
Fuller scale	$614K	$103K	$511K	83.2%	$0	Best cushion, but only if service and warehouse capacity hold.

What breaks the break-even plan for a medical equipment business?

Stress test

The base plan breaks even at about $448,000 in monthly revenue, but it has no real cushion. A 10% sales miss, higher fixed overhead, or a margin squeeze can quickly turn a small miss into a $90,000-plus gap.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$448,000	$0 cushion	Any sales slip hits profit fast.
Revenue shortfall	Monthly revenue runs 10% below plan at $403,000.	$448,000	$36,000 gap	A small miss burns cash after variable costs.
Fixed-cost pressure	Fixed overhead rises 10% to $399,000.	$493,000	$73,000 gap	Warehouse, staff, and overhead costs can outpace sales.
Margin pressure	Variable expense rises from 19% to 24%, cutting contribution margin to 76%.	$477,000	$57,000 gap	Freight, refurbishment, or discounting squeeze margin.
Combined pressure	Revenue is 10% light, fixed overhead rises 10%, and margin falls to 76%.	$525,000	$93,000 gap	One weak sales month plus cost creep blows past the cushion.

Can the founder prove Month 17 break-even before signing the warehouse lease and buying the first fleet?

Founder checklist

Test the lease, fleet, and hiring plan against the Month 17 break-even point before you lock capital in. The model only works if demand, margin, and cash all hold long enough to carry the early losses.

1Demand Proof150/day, 0.8%

Use the Year 1 traffic and 0.8% visitor-to-buyer conversion to prove the first order stream exists before you commit to the fleet.

2Warehouse Load$30K setup

Check the warehouse commitment before the $4,000 monthly rent and $8,000 deposit, and make sure the $30,000 setup and racking fits the first fleet.

3Runway Cash$158K floor

Protect the $80,000 platform build, $25,000 IT and office equipment, $15,000 diagnostic and repair tools, and $10,000 marketing content, while keeping cash above the $158,000 Month 17 low point.

4Staffing Ramp4.5 FTE

Year 1 payroll is about $320,000 a year across 4.5 FTE, so don't add headcount until the current team can carry delivery and service volume.

5Margin Mix19% var.

Direct equipment acquisition, refurbishment, logistics, and sales commissions total 19%, so break-even only works if that spread stays intact after delivery and handling.

6Launch Fleet$150K fleet

Validate the $150,000 initial rental equipment fleet against expected demand by category, and delay the $100,000 two-van purchase until delivery volume justifies it.