Neurological Rehabilitation Break-Even: About $557K Per Month

Fixed costs $47.4K/mo Lease plus payroll

Contribution margin 85% After variable costs

Break-even revenue $55.7K/mo Monthly target

Break-even timing Month 2 Early ramp

Break-even calculator

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

Lean Base Full

Monthly revenue Use total monthly treatment revenue before direct costs. $ Low revenue High revenue Variable expenses Include billing, marketing, consumables, and software tied to volume. $ Lower costs Higher costs

Money available to cover fixed costs $200,613 $233,000 revenue - $32,387 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs These are monthly overhead costs the business must cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which expenses are fixed, variable, semi-variable, or semi-fixed in a neurological rehabilitation break-even model?

Cost classification

Break-even gets fragile when monthly overhead, percentage fees, and step-up staffing are blended together. Keep stable monthly bills separate from volume-linked expenses, so each added treatment shows its real contribution.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Lease	Fixed	Carry $12,000 per month from Month 1 through Month 60 before calculating treatment contribution.	Spreading rent across each visit and making break-even look easier when volume rises.
Utilities	Fixed	Model $2,000 per month as stable overhead within the planning range.	Changing utilities with every treatment even though the model sets a flat monthly amount.
Insurance & Malpractice	Fixed	Include $2,500 per month as required monthly coverage, not a per-session charge.	Leaving it below the break-even line because it does not feel tied to patient visits.
Electronic Health Record and Billing System	Semi-variable	Split the $1,500 monthly base from the specialized software license percentage used in revenue-linked expense assumptions.	Putting the whole system in fixed overhead or treating the whole system as visit-driven.
Therapy Consumables	Variable	Apply 4.0% of revenue in the first year, then use the modeled percentage for each later year.	Using one flat monthly supply budget and missing higher usage as treatments grow.
Billing & Collections Fees	Variable	Apply 3.0% of revenue in the first year because the model ties the fee directly to collections activity.	Treating collections as fixed admin overhead and overstating contribution margin.
Marketing & Patient Acquisition	Variable	Use 5.0% of revenue in the first year, then step down to the modeled rates as volume matures.	Locking marketing at one monthly amount while assuming patient volume keeps rising.
Patient Coordinator	Semi-fixed	Model staffing in steps: 1.0 FTE in the first two years, 1.5 FTE in Year 3, and 2.0 FTE from Year 4.	Treating every payroll dollar as volume-linked instead of adding support staff when capacity steps up.

How does break-even change from a lean launch to a full rehab build?

Scenario table

More therapists and treatments raise revenue faster than overhead, so each step up improves cushion. But payroll, lease, and admin costs also rise, so break-even still depends on how quickly referrals fill the schedule.

Planning assumptions only; actual results can move with referral flow, staffing pace, and collections timing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$1,268k	$190k	$474k	85%	$604k	Clears the break-even line, but the cushion is still tied to steady referrals.
Base ramp	$2,330k	$324k	$530k	86.1%	$1.48m	Strong margin cushion, so the bigger risk is hiring ahead of filled schedules.
Full scale	$3,832k	$479k	$569k	87.5%	$2.78m	Best cushion of the three, but only if referral depth and staffing stay in sync.

What breaks first if referrals slow or costs rise in neurological rehabilitation?

Stress test

Year 1 starts with about $1.268M of revenue against a $558k break-even point, so the plan has roughly a $710k cushion. The real pressure comes from slower referrals, higher billing and acquisition costs, and any wage or equipment shocks that lift fixed load.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$558k	$710k cushion	Strong starting cushion, but fixed load stays heavy.
Revenue shortfall	Revenue lands 10% below plan.	$558k	$584k cushion	Slower referrals still cover break-even, but the buffer shrinks fast.
Fixed-cost increase	Fixed overhead rises by $5k per year.	$564k	$704k cushion	Small lease or staffing adds push break-even higher.
Margin pressure	Variable expenses rise 5 percentage points.	$593k	$676k cushion	Higher billing and visit costs cut contribution margin fast.
Combined pressure	Revenue falls 10%, variable expenses rise 5 points, and fixed overhead rises by $5k per year.	$599k	$542k cushion	Cancellations, delayed collections, wage resets, or downtime can erode the cushion quickly.

What should you verify before signing the lease and launch spend?

Founder checklist

Treat this as a cash-and-demand test, not a build-first bet. The model only works if referrals, reimbursement, staffing, and collections support Year 1 volume while you still keep $330k on hand for the Month 7 cash trough.

1Referral Pipeline480/mo

Confirm enough referred patients are ready to fill 480 treatments a month in Year 1 before you sign the lease, or fixed costs will hit before revenue does.

2Pricing Mix$150/$145/$160/$220/$130

Verify payer mix supports the assumed prices for physical therapy, occupational therapy, speech therapy, neuropsychology, and rehab nursing, because small rate cuts hit break-even fast.

3Fixed Burn$48.4K/mo

Add the $21.9k monthly facility and overhead budget to about $26.5k of Year 1 admin payroll so you know the base burn before variable treatment costs.

4Staff Ramp12 FTE

Check that recruiting and schedules can actually cover the Year 1 plan of 12 FTE, or service slots will go empty and revenue will lag the model.

5Cash Cushion$330K

Hold enough cash to survive the Month 7 trough, because the model needs about $330k of minimum cash even though breakeven lands in Month 2.

6Workflow Setup$700K capex

Make sure accessibility, scheduling, billing, EHR, and collections timing are ready before the $700k capex is committed, or ramp-up spend can outrun cash.