Used Oil Recycling Break-Even Analysis: $84K Monthly Revenue

Fixed costs ≈$25.4K/mo Base overhead

Contribution margin 82% After variable costs

Break-even revenue ≈$31.0K/mo Monthly target

Break-even timing Month 10 First profit month

Break-even calculator

Test monthly revenue, direct costs, and overhead to see when this service clears break-even.

Lean Base Full

Monthly revenue Revenue is the cash pool that covers direct and fixed costs. $ Low sales High sales Variable expenses Use direct costs that move with collection volume, like processing and fuel. $ Low direct High direct

Money available to cover fixed costs $171,150 $203,750 revenue - $32,600 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs Use monthly overhead that stays on, even when volume changes. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which used oil recycling expenses are fixed, variable, or scale in steps at break-even?

Cost classification

Break-even is only useful if each expense behaves like the model says it does. In this model, fixed overhead starts at $16,200 per month before payroll, while processing and fleet usage move with revenue and route activity.

Expense	Cost	Break-Even Treatment	Common Mistake
Fleet Insurance	Fixed	Include as $4,500 of monthly overhead before profit.	Tying it to gallons collected.
Facility Lease and Utilities	Fixed	Cover the $6,200 monthly facility burden before break-even.	Ignoring storage-yard minimums.
Software Platform Maintenance	Fixed	Include the $2,500 monthly system spend for routing and billing.	Treating it as a per-pickup charge.
Regulatory Compliance and Permits	Fixed	Include the $1,800 monthly compliance burden from Month 1.	Leaving permits out of break-even.
Third-Party Recycling Processing Fees	Variable	Model as 9.5% of first-year revenue, improving to 7.5% by fifth year.	Treating processing or disposal as fixed.
Fleet Fuel and Maintenance	Variable	Model as 8.5% of first-year revenue, improving to 6.5% by fifth year.	Treating fuel as fixed overhead.
Certified Fleet Driver Payroll	Semi-variable	Start with three first-year FTEs, then scale headcount as routes expand.	Assuming route labor is fully fixed.
Sales and Account Manager Payroll	Semi-fixed	Start with one first-year FTE, then add staff in hiring steps as accounts grow.	Ignoring the margin hit from hiring jumps.

How does break-even shift across lean, base, and full route months for this service?

Scenario table

Lean months stay underwater, the base case sits at break-even, and the fuller second-year mix turns a small monthly profit. The swing comes from pricing mix, route density, and fixed-cost absorption.

Planning assumptions only; actual results can shift with route density, fuel, and account mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean first-year route mix	$60.6k	$10.9k	$68.6k	82%	-$18.9k	Still below break-even; more stops are needed to cover fixed overhead.
Base break-even route mix	$84.0k	$15.1k	$68.9k	82%	$0	Month 10 break-even signal; any mix lift adds cushion.
Full second-year route mix	$132.1k	$22.5k	$95.1k	83%	$14.5k	Above break-even with a modest monthly cushion.

What breaks the break-even plan if revenue slips or costs run hot?

Stress test

Here’s the quick math: the base plan needs about $84,000 a month to break even on an 82% contribution margin and a $68,600 fixed burden. A 10% sales miss, higher fuel and processing fees, or 10% more overhead can push the plan back into loss.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$84,000	$0 gap	Only works if volume holds.
Revenue shortfall	Monthly revenue falls 10% below plan.	$84,000	$6,900 gap	A small sales miss creates real cash drag.
Fixed-cost pressure	Fixed costs rise 10% before routes scale.	$92,000	$8,000 gap	Overhead can outrun route density.
Margin pressure	Variable expense pressure lifts costs from 18% to 23%.	$89,100	$5,100 gap	Fuel and processing fees push break-even up fast.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and margin drops to 77%.	$98,000	$17,300 gap	Low renewals, long routes, and higher costs stack quickly.

Is the used oil recycling setup ready for break-even before you lease space, buy trucks, and hire route staff?

Founder checklist

Verify contracted volume, storage capacity, and cash before you lock in trucks, space, and route hires. The model reaches break-even around Month 10, but cash still dips to $27K in Month 16, so the opening plan has to absorb a slow ramp.

1Recurring volume184 accounts

Verify 184 Year 1 average accounts at the stated tier mix before you add routes, because that supports about $84.0K in monthly revenue.

2Startup capex$665K

Keep the $665K startup build separate from break-even math so trucks, storage, software, safety kits, and fit-out do not get treated like monthly profit needs.

3Fixed load$52.9K/mo

Check that the $4,500 insurance bill, $6,200 facility lease and utilities, plus software, compliance, admin, and Year 1 payroll stay under a $52.9K monthly base before you sign long commitments.

4Margin check82.0% CM

Confirm that 9.5% processing fees and 8.5% fuel and maintenance still leave an 82.0% contribution margin, or the route math stops working fast.

5Driver ramp3 drivers

Add the first three certified fleet drivers only when route density can keep pickups full, because sparse routes push payroll ahead of revenue.

6Cash buffer$27K floor

Hold at least $27K through the Month 16 low point and keep the Year 1 marketing plan near $120K with about $450 CAC, so early demand can keep pace with the cash burn.