Medical Practice Break-Even Analysis: $101k Monthly Revenue Target

Fixed costs $20.2K/mo Base overhead

Contribution margin 84.5% After variable costs

Break-even revenue $23.9K/mo Monthly target

Break-even timing Month 2 Launch ramp

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a medical practice.

Lean Base Full

Monthly revenue Revenue is the cash engine that covers direct costs and overhead. $ Low sales High sales Variable expenses These are the direct billing, collections, referral, and intake costs that rise with volume. $ Light costs Heavy costs

Money available to cover fixed costs $132,187 $144,620 revenue - $12,433 variable expenses

Margin ratio

91%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base the clinic must cover before profit starts. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which medical practice expenses stay fixed, and which move with patient volume?

Cost classification

Break-even is only reliable when rent, software, payroll, supplies, and billing fees are treated by how they behave as visits change. Misclassifying provider payroll as per-visit spend can make Month 2 break-even look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Clinic Rent	Fixed	Hold at $12,000 per month from Month 1 through Month 60.	Spreading rent across visits and hiding the true monthly hurdle.
Utilities	Semi-variable	Start with the $1,500 monthly base, then review usage as hours and rooms expand.	Treating the full bill as fixed when higher clinic use can lift it.
Malpractice Insurance	Fixed	Include $2,500 per month as a recurring operating expense.	Dropping it below the line instead of counting it in break-even overhead.
Electronic health record (EHR) and Scheduling Software	Fixed	Use the base model amount of $2,000 per month.	Modeling it as visit-based even though the forecast treats it as monthly.
Medical Supplies & Vaccines	Variable	Apply 4.0% of first-year revenue, improving to 3.0% by the fifth year.	Budgeting a flat dollar amount while vaccine and supply use rises with visits.
External Lab & Diagnostic Fees	Variable	Apply 2.5% of first-year revenue, falling to 1.5% by the fifth year.	Counting lab pass-throughs as fixed overhead instead of visit-linked spend.
Billing & Collections Service Fees	Variable	Apply 6.0% of first-year revenue, declining to 5.0% by the fifth year.	Leaving collections fees out of contribution margin, which overstates break-even.
Clinical and Front Desk Wages	Semi-fixed	Step payroll up by staffing plan, from 2 primary care physicians in the first year to 6 in the fifth year.	Treating provider and staff payroll like per-visit spend instead of capacity blocks.

How does break-even shift between lean, base, and full clinic setups?

Scenario table

Each step adds providers and raises monthly revenue, but it also brings more payroll and overhead. Break-even falls as the revenue base widens, yet the cushion only holds if visit flow keeps up with staffing.

Planning model only; actual results will move with payer mix, staffing, and visit flow.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean clinic, first year run-rate	$192,800	$29,884	$85,700	84.5%	$77,216	Revenue is above the $101,420 break-even line, so this is the tightest cushion.
Base clinic, Year 3 mix	$507,545	$68,519	$173,450	86.5%	$265,576	Break-even sits near $200,520, so this mix has room if referrals keep filling higher-acuity visits.
Full clinic, Year 5 mix	$932,520	$107,241	$270,367	88.5%	$554,912	Break-even is about $305,499, but the cushion only holds if staffing and capacity stay full.

What breaks the clinic’s break-even plan if revenue slips or costs creep up?

Stress test

Year 1 sits above break-even by about $91,380. The main risk is not one big shock; it’s softer revenue, higher billing or supply fees, and fixed costs like rent and staffing rising before the schedule fills.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$101,420	$91,380 cushion	Healthy cushion, but schedules must stay full.
Revenue shortfall	Year 1 revenue falls 20% to $154,240.	$101,420	$52,820 cushion	Demand can slip and still cover fixed overhead.
Fixed-cost increase	Fixed overhead rises 10% to $94,270.	$111,563	$81,237 cushion	Rent or staffing creep raises the bar fast.
Margin pressure	Variable expenses rise 5 points on revenue.	$107,925	$84,875 cushion	Billing, lab, or referral fees eat contribution fast.
Combined pressure	Revenue falls 20%, variable expenses rise 5 points, and fixed overhead rises 10%.	$118,585	$35,655 cushion	This is the tight case; small misses turn profit thin.

What should a founder verify before signing the clinic lease and committing to opening spend?

Founder checklist

Before you sign the lease and open the clinic, test whether the build-out, staffing, billing setup, and visit volume can carry the fixed load. If any piece slips, the Month 5 cash gap gets bigger and break-even stops being believable.

1Lease load$25.7K/mo

Verify the rent start and full fixed overhead fit the opening plan, because the clinic carries $25,700 in monthly fixed costs from Month 1.

2Phase capex$353K

Confirm first-phase spending covers the $150,000 build-out, $75,000 diagnostic equipment, $40,000 exam furnishings, $30,000 IT, and $25,000 EHR work before you commit.

3Staff ramp2-1-2-1-1

Lock provider start dates to match Year 1 staffing of 2 primary care physicians, 1 nurse practitioner, 2 medical assistants, 1 practice manager, and 1 front desk staffer.

4Visit load1,820 visits

Check that scheduling capacity and referral flow can support 1,820 weighted monthly visits in Year 1, or the staffing plan will outrun demand.

5Margin mix84.5% CM

With Year 1 revenue around $114.6K per month and variable costs at 15.5%, contribution is about $96.8K, so billing and acquisition costs must stay in line.

6Cash buffer$670K

Hold enough cash to cover the Month 5 minimum cash need of $670,000 and keep marketing light until appointments can be filled and billed.