Occupational Therapy Break-Even Point: 362 Visits Per Month

Fixed costs $53.9K/mo Payroll included

Contribution margin 89% After variable costs

Break-even revenue $60.9K/mo Monthly target

Break-even timing Month 2 Launch month

Break-even calculator

Use this calculator to test monthly revenue against variable expenses and fixed costs, then see where the clinic breaks even.

Lean Base Full

Monthly revenue Revenue is the top line that covers variable costs and helps pay fixed costs. $ Low volume Busy clinic Variable expenses These are the costs that rise with patient volume, like billing, marketing, and therapy supplies. $ Lean overhead Heavy spend

Money available to cover fixed costs $79,500 $90,000 revenue - $10,500 variable expenses

Margin ratio

88%

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 occupational therapy expenses are fixed, and which move with patient volume?

Cost classification

Break-even is reliable only when fixed payroll and clinic overhead stay out of gross margin. In the first operating year, visit-linked costs equal 11.5% of revenue, while $9,900 in monthly fixed overhead must be covered.

Expense	Cost	Break-Even Treatment	Common Mistake
Clinic Rent	Fixed	Use $5,000 per month as fixed overhead from Month 1 through Month 60.	Spreading rent across visits and overstating per-session margin.
Utilities	Fixed	Use $800 per month as fixed overhead because the model treats it as a stable monthly charge.	Modeling it as volume-linked when the forecast gives a flat monthly amount.
Electronic Health Record Software Subscription	Fixed	Use $1,000 per month as fixed overhead before calculating break-even visits.	Leaving software below the line and understating monthly overhead.
Professional Liability Insurance	Fixed	Use $500 per month as fixed overhead required to operate the clinic.	Treating required coverage as optional until patient volume ramps.
Therapeutic Supplies	Variable	Use 2.0% of first-year revenue as a visit-linked expense in gross margin.	Ignoring small supply percentages that compound as visits grow.
Splint Fabrication Materials	Variable	Use 1.5% of first-year revenue as a revenue-linked materials charge.	Classing specialized materials as fixed inventory instead of session-driven usage.
Medical Billing Services	Variable	Use 5.0% of first-year revenue as a variable collection and billing charge.	Counting billing as fixed while each reimbursed visit adds processing expense.
Occupational Therapist Payroll	Semi-fixed	Treat committed first-year payroll as fixed overhead, then add FTE in steps as capacity rises.	Calling therapist salaries variable even when payroll is owed if visits fall.

How does break-even shift from launch to scaled to mature occupational therapy operations?

Scenario table

At launch, the clinic is still carrying about $53.9k of monthly overhead, so break-even is tight. By Year 3 and Year 5, higher therapist capacity lifts revenue faster than fixed cost, which widens the cushion even though variable costs stay near 10% of sales.

Planning assumptions only; actual break-even can move with payer mix, staffing speed, and referral flow.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Launch referral-demand case	$77,760	$8,942	$53,858	88.5%	$14,959	Revenue clears break-even by about $16.9k, so launch risk is still sensitive to referral volume.
Scaled staffing-depth case	$239,890	$24,709	$105,317	89.7%	$109,865	Revenue sits about $122.5k above break-even, so staffing depth matters more than overhead.
Mature multi-therapist case	$499,680	$47,470	$154,483	90.5%	$297,727	Revenue is about $329.0k above break-even, so capacity is the main limit, not fixed cost.

What breaks the break-even plan for an occupational therapy clinic?

Stress test

Year 1 clears break-even, but the cushion is only about $16.9k a month. Billing lag, no-show spikes, reimbursement pressure, or hiring before booked capacity can erase it fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$60,857	$16,903 cushion	Profit stays positive if revenue holds.
Revenue shortfall	Year 1 revenue falls 10% to $69,984.	$60,857	$9,127 cushion	Completed visits below 362/month can shrink the cushion fast.
Fixed-cost pressure	Monthly fixed overhead rises 10% to $59,244.	$66,943	$10,817 cushion	Extra rent or staffing cuts straight into break-even headroom.
Margin pressure	Variable expense rate rises 5 points to 16.5% of revenue.	$64,462	$13,298 cushion	Billing lag and reimbursement pressure weaken profit without more volume.
Combined pressure	Revenue falls 10%, fixed overhead rises 10%, and variable expense rate rises 5 points.	$70,942	$958 gap	A modest miss on volume plus higher overhead flips profit to loss.

What should you verify before signing the lease and hiring ahead of occupational therapy volume?

Founder checklist

Before you sign the lease or add the next therapist, make sure referral volume, payer setup, and cash can support break-even. The model only works if the Year 1 mix fills the schedule, covers the $9.9K monthly overhead, and survives the $836K Month 2 cash trough.

1Referral proof362 visits/mo

Verify enough referral sources to keep at least 362 completed visits each month, because that is the demand floor behind the Year 1 plan.

2Revenue mix$87.6K/mo

Check that the Year 1 service mix really produces about $87,600 a month from the forecast volumes and prices, or break-even slips fast.

3Contribution margin88.5% CM

Confirm that supplies, splint materials, billing, and patient acquisition stay near 11.5% of revenue, which leaves 88.5% before fixed overhead and wages.

4Fixed overhead$9.9K/mo

Lock the non-labor clinic burn at about $9,900 a month for rent, utilities, software, insurance, cleaning, supplies, education, and IT before you sign a lease.

5Capacity ramp7 clinicians

Match rooms and schedules to the Year 1 mix of pediatric, adult rehab, geriatric, hand therapy, and group program visits, and do not add the next FTE until demand supports the step-up.

6Launch controls$836K Month 2

Hold cash for the $836,000 low point in Month 2 and the $185,000 build-out package, and finish payer enrollment, Health Insurance Portability and Accountability Act (HIPAA)-compliant systems, and liability insurance before launch.