Occupational Therapy Clinic Break-Even Analysis: $92K Monthly Revenue

Fixed costs $9.1K Core overhead

Contribution margin 84.5% After variable spend

Break-even revenue $10.7K Monthly target

Break-even timing Month 26 Launch to even

Break-even calculator

Use this to test monthly revenue against variable costs and the fixed cost base that break-even must cover.

Lean Base Full

Monthly revenue Revenue is the cash coming in each month before direct and fixed costs. $ Low volume High volume Variable expenses These are the costs that rise with patient volume, like supplies, billing fees, marketing, and transaction fees. $ Light costs Heavy costs

Money available to cover fixed costs $152,425 $175,000 revenue - $22,575 variable expenses

Margin ratio

87%

Covers fixed costs

Yes

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

Break-even chart Revenue Total costs

Which occupational therapy clinic expenses are fixed, and which move with visits?

Cost classification

Break-even gets tighter when rent and core staff sit in overhead, while supplies, billing fees, and marketing move with revenue. Misclassifying therapist payroll as per-visit spending can make Month 26 break-even look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Clinic Rent, $7,500/month	Fixed	Include in monthly overhead before any visit volume.	Spreading rent across visits and hiding idle capacity.
Utilities, $1,000/month	Semi-fixed	Hold flat within the current clinic footprint, then step up with longer hours or more rooms.	Treating utilities as fully variable with each treatment.
Professional Liability Insurance, $750/month	Fixed	Include as recurring overhead for the monthly planning range.	Leaving it out because it does not track patient visits.
Consumable Therapy Supplies, 2.0% of revenue in first year	Variable	Deduct from revenue as visit-driven direct spending.	Budgeting one flat supply amount despite higher treatment volume.
Billing Service Fees, 4.0% of revenue in first year	Variable	Apply as a revenue-linked deduction before contribution margin.	Putting billing fees in fixed overhead and overstating margin.
Patient Acquisition Marketing, 8.0% of revenue in first year	Variable	Treat as demand-driven spending tied to patient volume and revenue.	Assuming referrals replace paid marketing too early.
EHR Transaction Fees, 1.5% of revenue in first year	Variable	Deduct with each billed treatment or revenue cycle transaction.	Combining usage fees with the fixed software subscription.
Occupational Therapist Payroll, 6.0 FTE in first year	Semi-fixed	Model as capacity added in staffing blocks, not as a fee per visit.	Treating all therapist payroll as per-visit spending.

How do lean, base, and full occupational therapy clinic scenarios change break-even risk?

Scenario table

Lean launch runs below break-even, the base case sits at the line, and full scale adds cushion. Best fit depends on referrals, payer mix, and room utilization.

Planning cases only; actual results will move with referrals, payer mix, staffing, and room use.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$53,223	$8,250	$77,917	84.5%	($32,944)	Cash burn stays high unless volume or overhead improves.
Base break-even	$92,209	$14,292	$77,917	84.5%	$0	This is the line; small misses in referrals create losses.
Full scale	$273,876	$30,126	$173,750	89.0%	$69,500	With 18 OT FTE and 5 assistant FTE, EBITDA can reach about $834,000 a year if utilization holds.

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

Stress test

The base plan is already tight, so a small miss on visits or reimbursement pushes the clinic deeper into the red. The biggest pressure points are cancellations, claim denials, overtime, rent jumps, and weak referral flow.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$85,300	$32,100 gap	Base pricing still leaves a monthly shortfall.
Revenue shortfall	Year 1 revenue falls 10% to $47,900.	$85,300	$37,400 gap	Fewer visits or weak referrals widen the loss fast.
Fixed-cost increase	Monthly overhead rises 10% to $85,700.	$101,400	$48,200 gap	Rent or staffing hikes push break-even out of reach.
Margin pressure	Variable expenses rise to 20.5% of revenue.	$98,000	$44,800 gap	Denials, billing fees, and overtime eat contribution.
Combined pressure	Revenue falls 10%, variable rate rises to 20.5%, and overhead rises 10%.	$100,800	$47,600 gap	One miss in referrals can turn into a cash squeeze.

Is the occupational therapy clinic ready to sign the lease and hire before the break-even math works?

Founder checklist

Don’t commit until the space, staffing, billing, and referral flow can support the Year 1 model. If any one of those slips, the clinic can miss break-even even when demand looks fine on paper.

1Fixed load$77.9K/mo

Verify the lease and full fixed base, including $7,500 rent and Year 1 payroll, fit inside the monthly load; if the room plan is too tight, break-even moves out fast.

2Visit flow570/mo

Check that referral sources can reach 570 completed monthly visits, not just the 329 launch volume, because break-even only works on visits that are actually billed and collected.

3Margin mix84.5% CM

Confirm the first-year mix still leaves about 84.5% contribution margin after 2.0% supplies, 4.0% billing fees, 8.0% patient acquisition marketing, and 1.5% electronic health record (EHR) fees.

4Staff ramp6 OT + 2 assist

Make sure you can staff 6 occupational therapist FTE and 2 OT assistant FTE in Year 1 while holding payroll near $66,667 per month, or capacity will cap before demand does.

5Capex fund$165K

Fund the full $165,000 build-out, equipment, furniture, IT, security, signage, and software package before opening, because partial setup burns cash without adding billable visits.

6Cash floor$90K, Month 37

Keep at least $90,000 of cash through Month 37, since that is the model low point and a slower billing cycle or delayed credentialing can eat the cushion quickly.