Metal Recycling Break-Even Revenue: About $108K Per Month

Fixed costs $90.9K/mo Payroll + overhead

Contribution margin 83.8% Left after variable

Break-even revenue $108.5K/mo Cover fixed base

Break-even timing Month 1 Launch month

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs to see where this metal recycling setup breaks even.

Lean Base Full

Monthly revenue Revenue sets the pool that has to cover direct costs and overhead. $ Lower sales Higher sales Variable expenses Use costs that rise with scrap volume, processing, and selling activity. $ Lower costs Higher costs

Money available to cover fixed costs $6,978,710 $7,871,667 revenue - $892,957 variable expenses

Margin ratio

89%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base contribution margin has to cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which metal recycling expenses are fixed, variable, semi-variable, or semi-fixed for break-even?

Cost classification

Break-even is only reliable if raw scrap, freight, and commissions move with sales while rent, insurance, and admin stay fixed. Keep scrap purchases out of fixed overhead, or the model will understate the volume needed to break even.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $8,000 per month in fixed overhead.	Spreading rent per ton and making it rise with sales.
General Insurance	Fixed	Use $3,000 per month in fixed overhead.	Modeling insurance as a revenue percentage.
Accounting & Legal Fees	Fixed	Use $2,500 per month in fixed overhead.	Leaving recurring compliance support out of break-even.
Core Salaried Payroll	Fixed	Use about $45.4K per month for CEO, operations, sales, quality control, and admin roles in the first operating year.	Mixing management salaries with direct labor per unit.
Raw Scrap Purchase	Variable	Apply per unit: $20 shredded steel, $100 aluminum ingots, $350 copper chops, $200 brass scrap, and $75 stainless steel.	Putting scrap purchases into fixed overhead.
Logistics and Transportation	Variable	Use 3.0% of revenue in the first operating year, then lower rates by year as modeled.	Using a flat truck budget when freight moves with sales.
Processing Facility Utilities	Semi-variable	Treat the modeled 1.0% of revenue as usage-linked processing overhead, with any base facility charge kept separate if added later.	Treating the full utility load as fixed rent.
Heavy Equipment Operators and Truck Drivers	Semi-fixed	Hold labor steady within each staffing band, then step up as FTE grows from 5 combined roles in the first operating year to 13 by the mature year.	Assuming each added ton creates the same labor expense.

How does break-even change from lean launch to base and full scale in metal recycling?

Scenario table

As output rises, revenue grows faster than variable cost load, so the break-even bar stays covered even as payroll and overhead step up. The extra cushion comes from spreading fixed plant costs across more processed metal.

Planning case only; actual scrap prices, throughput, and compliance costs can move the break-even line.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch (Year 1)	$3.89M	$632.3k	$90.9k	83.8%	$3.17M	Launch clears break-even, but the cushion is still tied to scrap and freight costs.
Base scale (Year 3)	$7.87M	$1.19M	$111.7k	84.9%	$6.57M	Base scale gives a wider cushion because volume spreads plant and payroll overhead.
Full scale (Year 5)	$12.23M	$1.70M	$132.5k	86.1%	$10.40M	Full scale stays well above break-even, so the main risk shifts to cost control.

What breaks the break-even plan for this metal recycling business?

Stress test

Year 1 monthly revenue is about $3.89M versus break-even near $108.6K, so the base case has a wide cushion. The real risk is a steady drop in metal price spreads or a bigger-than-planned hit to monthly volume.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$108,555	$3,783,112 cushion	Wide cushion, so break-even is not the first risk.
Revenue shortfall	Year 1 revenue falls 10%.	$108,555	$3,393,945 cushion	The model still clears break-even, but volume loss bites fast.
Fixed-cost pressure	Fixed overhead rises $10,000 per month.	$120,493	$3,771,174 cushion	Overhead creep raises the hurdle, but the base case still covers it.
Margin pressure	Contribution margin falls 1 point.	$109,834	$3,781,833 cushion	Spread pressure nudges break-even up, so pricing discipline still matters.
Combined pressure	Revenue falls 1%, margin falls 1 point, and fixed overhead rises $10,000 per month.	$121,868	$3,730,882 cushion	The cushion narrows, but the plan still stays well above break-even.

Before you sign the yard lease, what has to be true for break-even to hold?

Founder checklist

Don’t commit to the yard until the site, scrap supply, and buyer demand all support the Month 1 plan. With Year 1 revenue at $46.7M, variable cost near 11.7%, and minimum cash of $1.178M, the real test is whether launch starts on schedule.

1Demand proof$46.7M Year 1

Verify buyers can take the forecast mix of shredded steel, aluminum ingots, copper chops, brass scrap, and stainless steel, because the Year 1 revenue target only works if those outlets are real and repeat.

2Fixed load$90.9K/mo

Check whether the yard can carry the $8K rent plus the rest of the fixed stack, because the business already has about $90.9K of monthly fixed burn before variable production costs.

3Margin check88.3% CM

Confirm inbound scrap pricing and sales pricing still leave about 88.3% contribution margin before fixed costs, since supply gaps or cost inflation can move break-even fast.

4Staffing ramp10 FTE

Match hiring to throughput with 1 CEO, 1 operations manager, 1 sales manager, 1 QC lead, 3 operators, 2 drivers, and 1 admin, so labor does not get ahead of processed volume.

5Cash cushion$1.178M

Hold the Month 1 minimum cash before you commit, because the model’s low point is $1.178M and any delay in launch, collections, or equipment delivery can create a cash squeeze.

6Capex timing$4.45M capex

Stage the $4.45M equipment build only after the site, buyers, and scrap flow are proven, so the shredding plant, melting line, chopping unit, trucks, forklifts, and environmental controls follow demand instead of outrunning it.