Medication Adherence App Break-Even: About $77K Monthly Revenue

Fixed costs $49.9K/mo Payroll + overhead

Contribution margin 78% After variable costs

Break-even revenue $63.9K/mo Cover the floor

Break-even timing Month 6 Forecast break-even

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed costs against break-even.

Lean Base Full

Monthly revenue Revenue is the pool that covers direct costs and fixed overhead. $ Low sales High sales Variable expenses These are direct costs that move with revenue, like app store fees and support. $ Low direct cost High direct cost

Money available to cover fixed costs $158,666 $198,333 revenue - $39,667 variable expenses

Margin ratio

80%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that contribution margin has to cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which medication adherence app expenses stay fixed, and which move with sales?

Cost classification

Break-even is useful only if fixed overhead stays separate from revenue-linked fees. In the first year, payroll is $485K/year, marketing is $10K/month, and usage fees can take 22% of revenue before fixed overhead.

Expense	Cost	Break-Even Treatment	Common Mistake
General Office Rent	Fixed	Include $4,500/month in fixed overhead from Month 1 through Month 60.	Tying rent to subscriber count instead of treating it as baseline overhead.
Year 1 Payroll	Fixed	Use $485K/year, or about $40.4K/month, for the planned first-year team.	Letting payroll move with users before the staffing plan actually changes.
Annual Marketing Budget	Semi-fixed	Model $120K/year, or $10K/month, as planned spend that steps up with growth plans.	Spreading marketing as a pure percentage of revenue and hiding spend limits.
Customer Acquisition Cost (CAC)	Variable	Use $2 per acquired customer in the first operating year for acquisition volume testing.	Counting CAC on top of the same marketing budget without checking for double spend.
HIPAA Compliant Cloud Hosting and Storage	Variable	Subtract 8% of first-year revenue in contribution margin before fixed overhead.	Treating hosting as fixed and overstating margin as user activity grows.
Pharmaceutical Data Licensing Fees	Variable	Subtract 5% of revenue as a revenue-linked vendor fee in the break-even model.	Leaving data fees below EBITDA instead of reducing contribution margin.
App Store Transaction Fees	Variable	Apply 5% of revenue to paid subscriptions processed through app stores.	Using gross subscription revenue and missing store fee leakage.
Customer Support Outsourcing	Semi-variable	Model 4% of revenue in the first year, then review ticket volume as paid users grow.	Holding support flat while medication reminders, billing issues, and caregiver questions rise.

How does break-even shift from a lean launch to a fuller growth plan for this medication adherence app?

Scenario table

Lean holds a thin cushion, base adds real breathing room, and full scale widens it further. Higher conversion and higher average revenue per user lift margin coverage, while fixed costs rise as launch scale grows.

Planning figures are scenario assumptions, not guarantees; actual results will move with conversion, pricing, support load, and fixed-cost growth.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$768K	$169K	$599K	78%	$0K	Break-even is tight; small misses turn the month negative.
Base Year 1 case	$1.00M	$221K	$599K	78%	$184K	Clear cushion here, but conversion still has to hold.
Full Year 2 scale case	$1.98M	$397K	$649K	80%	$937K	Higher conversion and revenue per user give strong break-even cover.

What breaks the break-even plan if growth slows or costs rise?

Stress test

The base plan clears break-even, but the cushion gets thin fast if free-to-paid conversion slows, support costs rise, or launch spending moves ahead of retention proof.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change from the base plan.	$768K	$436K cushion	Base case clears break-even with room to spare.
Revenue shortfall	Revenue falls 15% to about $853K at a 78% contribution margin.	$768K	$67K cushion	Lower paid growth still clears break-even, but the buffer shrinks.
Fixed-cost increase	Fixed costs rise 10% to about $659K.	$845K	$8K cushion	Extra launch spend almost wipes out the margin of safety.
Margin pressure	Variable expenses rise 5 points, from 22% to 27%.	$820K	$33K cushion	Higher app store fees and support costs cut the cushion fast.
Combined pressure	Revenue stays near $853K while margin drops to 73% and fixed costs rise 10%.	$904K	$36K gap	This case misses break-even, so the model needs stronger retention.

What should you verify before you scale this medication adherence app?

Founder checklist

Before you scale marketing, hiring, or compliance spend, verify the free-to-paid funnel, unit margin, and fixed load in the first year. The model breaks even in Month 6, but cash still bottoms at $792K in Month 2, so you need a real reserve.

1Paid conversion3.0%

Verify that free users convert to paid at 3.0% before you spend harder, because that is the clearest proof the app can monetize.

2Free signups12.0%

Check that 12.0% of visitors join the free app, or paid acquisition will not fill the top of the funnel fast enough.

3Unit margin78% CM

Check that 8.0% hosting, 5.0% data licensing, and 5.0% store fees still leave enough contribution margin (CM) after support.

4Fixed load$49.9K/mo

Keep staff and overhead near $49.9K per month until sales can cover it, since break-even lands in Month 6.

5Cash floor$792K

Hold at least $792K in cash, because the model hits its lowest cash point in Month 2.

6Dev ramp1.5 FTE

Delay extra support outsourcing until onboarding is clean, because the lead developer steps up to 1.5 FTE in Year 3 and weak onboarding turns into tickets.