Microfiche Digitization Break-Even Analysis: Month 26 Target

Fixed costs $74.5K/mo Base overhead

Contribution margin 75.5% Left after variable

Break-even revenue $98.7K/mo Monthly target

Break-even timing Month 26 Model breakpoint

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for a microfiche digitization service.

Lean Base Full

Monthly revenue Revenue is the top line that funds fixed costs after direct costs. $ Low sales High sales Variable expenses These are direct costs that move with each digitization project. $ Low direct cost High direct cost

Money available to cover fixed costs $159,700 $201,600 revenue - $41,900 variable expenses

Margin ratio

79%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly overhead costs break-even must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which microfiche digitization expenses are fixed, variable, or semi-fixed for break-even?

Cost classification

Break-even is only useful if fixed overhead, volume-linked processing expense, and staffing steps are kept separate. Here, first-year fixed facilities and $618,000 of payroll can bury the true production margin if they’re pushed into scan-level costs.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Rent & Utilities	Fixed	Model as $12,500 per month from Month 1 through Month 60.	Allocating rent to each scan job.
Security & Insurance	Fixed	Model as $3,200 per month required for secure media handling.	Ignoring client handling requirements.
Equipment Maintenance & Support	Fixed	Model as $2,800 per month to keep scanners and systems available.	Treating maintenance as optional.
OCR Software Licensing & Processing	Variable	Model as 8.5% of first-year revenue, or about $40,800 on $480,000.	Burying processing fees in overhead.
Media Handling & Logistics	Variable	Model as 4.5% of first-year revenue, or about $21,600 on $480,000.	Forgetting shipping and intake labor.
Sales Commissions & Incentives	Variable	Model as 8.0% of first-year revenue, or about $38,400 on $480,000.	Double counting CAC and commissions.
Cloud Storage & Data Transfer	Variable	Model as 3.5% of first-year revenue, or about $16,800 on $480,000.	Assuming storage is free.
Technician, QA, project, IT, admin, and manager payroll	Semi-fixed	Model as $618,000 in first-year wages, then step up with staffing capacity.	Hiring ahead of validated volume.

How does break-even change from a lean start to base and full-capacity microfiche digitization?

Scenario table

Lean is still below break-even because fixed payroll and facility costs outrun the smaller monthly revenue base. By Year 3, the higher contribution margin (CM) turns the model positive, and Year 5 has a much wider cushion if utilization stays high and rework stays low.

Planning cases only; actual contract mix, rework, and timing can move break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean government records start	$40,000	$9,800	$74,500	75.5%	-$44,300	Below break-even; underfilled equipment and payroll drag.
Base mixed archive run	$201,583	$41,929	$96,167	79.2%	$63,487	Above break-even; the mix now covers fixed costs with room to spare.
Full-capacity archive portfolio	$530,167	$94,906	$132,250	82.1%	$303,011	Strong cushion; larger archive contracts and lower rework fit this case best.

What breaks first in the break-even plan for this microfiche digitization service?

Stress test

This model leans hard on fixed costs. Year 1 revenue is about $40,000 a month, but break-even sits near $104,000, so a sales miss, higher overhead, or more rework pushes profit out and cash burn stays heavy.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; Year 1 revenue stays near $40,000 a month.	$103,643	$48,050 gap	Month-one revenue still leaves a wide cash coverage gap.
Revenue shortfall	Monthly revenue falls 15% from $40,000 to $34,000.	$103,643	$52,580 gap	A 15% sales miss widens the gap fast.
Fixed cost pressure	Monthly fixed costs rise 10% from $78,250 to $86,075.	$114,074	$55,875 gap	More rent, labor, or admin spend pushes breakeven later.
Margin pressure	Variable expenses take 5 more points of revenue, cutting contribution margin from 75.5% to 70.5%.	$110,993	$50,050 gap	More OCR, logistics, or QC rework eats more of each dollar.
Combined pressure	Revenue falls 15%, fixed costs rise 10%, and margin drops to 70.5%.	$122,163	$62,105 gap	This is the clearest cash warning; the model already bottoms at -$880,000 in Month 25.

Can you prove demand, pricing, and cash before you commit to the scanner build?

Founder checklist

Do not lock in the scanners, facility, or hires until signed or high-probability work can support about $104K a month, your Year 1 pricing test holds, and cash can survive the Month 25 trough of about -$880K.

1Launch Demand$104K/mo

Verify signed or high-probability work can cover the break-even run rate before you commit major capital, and check customer acquisition cost (CAC), the cost to win one client, at $1,800 against contract value.

2Capex Gate$833K

Review the full $833K of listed scanner, server, facility, security, and workstation spend before you buy, because this build only works if demand is already in hand.

3Fixed Load$23K/mo

Confirm the $23K monthly fixed cost base from rent, security, support, legal, supplies, memberships, and bookkeeping is supportable from opening-month work.

4Margin Mix75.5% CM

Year 1 variable costs total 24.5% of revenue, so contribution margin is 75.5%; test pricing from $65 to $110 per billable hour by segment so the mix does not push break-even out.

5Workflow Ramp2 senior techs

Prove the first workflow with no more than two senior scanning technicians, plus secure intake, chain-of-custody, media handling, return steps, and QA standards before you add more FTEs.

6Cash Buffer-$880K

Plan reserves for the Month 25 cash low of about -$880K, because breakeven does not arrive until Month 26 and the ramp can outrun cash fast.