Organic Health Food Store Break-Even: $227K Monthly Revenue Risk

Fixed costs $19.4K/mo Overhead base

Contribution margin 85.5% Sales after variable costs

Break-even revenue $22.7K/mo Monthly sales target

Break-even timing Month 7 Model crossover point

Break-even calculator

Use this to test monthly revenue against variable costs and fixed costs, then see how quickly the store reaches break-even.

Lean Base Full

Monthly revenue Sales set the margin pool that has to cover fixed costs. $ Low sales High sales Variable expenses Direct costs rise with sales, like inventory, card fees, and promo spend. $ Low costs High costs

Money available to cover fixed costs $33,700 $39,400 revenue - $5,700 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly costs the store pays even when sales slow. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which expenses are fixed, variable, semi-variable, or semi-fixed for an organic health food store?

Cost classification

Break-even gets more reliable when fixed overhead stays separate from sales-linked spend. This table uses only listed model expenses, so it keeps Month 7 break-even math tied to the actual operating plan.

Expense	Cost	Break-Even Treatment	Common Mistake
Store Rent	Fixed	Include $5,000 per month in fixed overhead for the relevant planning range.	Treating rent as a percent of sales and hiding the true monthly hurdle.
Store Insurance	Fixed	Include $300 per month as fixed overhead from Month 1 through Month 60.	Leaving small fixed bills out because they look immaterial one by one.
Utilities	Semi-variable	Start with the $800 monthly base, then review usage if refrigeration load or store hours rise.	Modeling the full bill as fixed when higher traffic can lift power use.
Payment Processing Fees	Variable	Apply as a sales-linked rate, starting at 2.5% of revenue in the first year.	Putting card fees in overhead instead of tying them to checkout volume.
Marketing & Promotions	Variable	Apply as a revenue-linked spend, starting at 7.0% in the first year.	Assuming the budget stays flat while sales and customer acquisition rise.
Inventory Quality Control	Variable	Treat as cost of goods sold, starting at 3.0% of revenue in the first year.	Classifying quality checks as overhead and overstating contribution margin.
Store Payroll	Semi-fixed	Treat wages as fixed within each staffing plan, then step them up as full-time equivalents increase.	Spreading payroll as a smooth percent of sales instead of modeling staffing steps.

How does break-even shift from a lean store to a full organic health food setup?

Scenario table

Break-even gets easier as traffic, conversion, and basket size rise, but payroll also climbs. The lean case clears break-even with the thinnest cushion, and the full case gives the widest cushion.

Planning cases only; actual results will move with traffic, mix, staffing, and pay mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean operating case	$39.4k	$5.7k	$16.2k	85.5%	$17.5k	Clears break-even, but the cushion is still the thinnest.
Base operating case	$86.2k	$11.7k	$20.1k	86.4%	$54.4k	Break-even risk eases as traffic and basket size rise.
Full operating case	$162.3k	$20.5k	$23.9k	87.4%	$118.0k	Strong cushion; higher traffic covers fixed costs fastest.

What pressure breaks the break-even plan for an organic health food store?

Stress test

The base plan clears break-even, but the cushion is small. A 20% traffic drop, a 10% rise in fixed costs, or a 5-point margin hit can erase most of that buffer fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change from Year 1 fixed costs, 14.5% variable expenses, and an 85.5% contribution margin.	$227k	$19k cushion	Base case has only a modest buffer.
Revenue shortfall	Revenue falls 20% versus the Year 1 steady visitor case.	$227k	$30k gap	Slow traffic and weak conversion cut through the cushion.
Fixed-cost pressure	Fixed costs rise 10% from $194k to about $214k.	$250k	$4k gap	Higher payroll or rent pushes the store below break-even.
Margin pressure	Variable expenses rise 5 points, lowering contribution margin to 80.5%.	$241k	$5k cushion	Supplier price pressure, shrink, or spoilage eat the buffer.
Combined pressure	Revenue falls 20%, fixed costs rise 10%, and margin drops to 80.5%.	$265k	$69k gap	Small misses across traffic, payroll, rent, and waste turn into loss.

Is this organic health food store ready to sign the lease, hire, and buy opening stock?

Founder checklist

Don’t sign the lease or buy opening stock until traffic, margin, and cash all clear the model. Breakeven lands in Month 7, but cash bottoms in Month 8 at about $737K, so the launch has to survive that gap.

1Traffic Test75 buyers/wk

Test 500 weekly visitors at 15% conversion before you commit, because that gets you to about 75 buyers a week and proves the shop has real pull.

2Lease Load$7.1K/mo

Keep rent at $5,000 and total fixed overhead near $7,120 a month before payroll, or the store starts too heavy for its break-even path.

3Margin Mix85.5% CM

Hold Year 1 variable costs near 14.5% of sales, since that leaves an 85.5% contribution margin to cover payroll and rent.

4Staff Ramp3.5 FTE

Verify the opening team can cover 3.5 FTE in Year 1, with payroll around $147.5K a year before the marketing hire starts in Month 13.

5Cash BufferMonth 8 / $737K

Keep enough cash to reach the Month 8 trough, because the model shows minimum cash of about $737K and breakeven only arrives in Month 7.

6Launch Surge5 units/order

Make sure shelves, supplier terms, and the $40K opening stock can handle 5 units per order and about 210 weekend visitors, or launch-day stockouts will hit sales fast.