Orthopedic Clinic Break-Even Analysis: About $291K Monthly

Fixed costs $238.3K Monthly base

Contribution margin 82% After variable costs

Break-even revenue $290.6K Monthly target

Break-even timing Month 26 Forecast month

Break-even calculator

Test how monthly revenue, variable expenses, and fixed costs move the clinic to break-even.

Lean Base Full

Monthly revenue Revenue is the monthly cash coming in before costs. $ Lower volume Higher volume Variable expenses These costs rise with treatments, billing, and marketing. $ Lower cost Higher cost

Money available to cover fixed costs $247,148 $301,400 revenue - $54,252 variable expenses

Margin ratio

82%

Covers fixed costs

$131,152 short

Fixed monthly costs This is the monthly cost base the margin has to cover. $ Tighter overhead Broader overhead

Break-even chart Revenue Total costs

Which clinic expenses are fixed, and which move with patient revenue?

Cost classification

If fixed payroll and facility overhead get mixed with visit-linked supplies and billing fees, break-even will look cleaner than cash will feel. Use fixed monthly load first, then let 18% revenue-linked expenses reduce contribution margin.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Lease	Fixed	Include $15,000 monthly in non-wage overhead from Month 1 through Month 60.	Treating rent as lower when patient volume drops.
Malpractice Insurance	Fixed	Include $5,000 monthly because coverage is needed before volume arrives.	Pushing insurance into per-procedure expense.
Clinical and admin payroll	Fixed	Include $212,500 first-year monthly wages for clinical, billing, reception, and administration roles.	Treating surgeon or staff pay as variable per visit.
Medical Supplies	Variable	Reduce contribution margin by 7% of revenue.	Putting supplies into fixed overhead.
Pharmaceuticals	Variable	Reduce contribution margin by 4% of revenue.	Assuming drug use stays flat as treatment revenue rises.
Billing Services	Variable	Reduce contribution margin by 5% of revenue.	Counting billing fees as admin payroll.
Marketing	Variable	Reduce contribution margin by 2% of revenue.	Budgeting marketing as a flat monthly line.
Maintenance	Semi-fixed	Budget $1,500 monthly, with step-ups as equipment use and clinic scale rise.	Modeling equipment upkeep like office rent.

How does break-even change from a lean launch clinic to a full orthopedic practice?

Scenario table

Break-even improves as staffing and capacity rise, because revenue grows faster than fixed cost load. The base case is the hinge: it turns monthly profit positive, but the model still reaches break-even around Month 26.

Planning assumptions only, not a promise of actual results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean first-year clinic	$228,000	$41,040	$238,300	82.0%	-$51,340	Still loss-making; fixed costs outrun cash flow.
Base second-year clinic	$451,406	$81,253	$324,967	82.0%	$45,186	Monthly profit turns positive, but break-even still lands around Month 26.
Full fifth-year clinic	$1,235,000	$222,356	$524,967	82.0%	$487,677	Strong mature-stage cushion; capacity is no longer the main risk.

Where does the break-even plan crack first for this orthopedic clinic?

Stress test

The base plan is already below break-even, and the gap widens fast if referrals slow, collections slip, or payroll grows ahead of volume. Underused imaging capacity and higher fixed overhead are the main pressure points.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$290,600	$62,600 gap	Still below break-even, so cash stays tight.
Revenue shortfall	Revenue falls 10% to $205,200.	$290,600	$85,400 gap	Slower referrals and collections widen the monthly loss.
Fixed-cost pressure	Fixed costs rise 10% to $262,130.	$319,700	$91,700 gap	Higher overhead pushes the target far above plan.
Margin pressure	Variable expenses rise to 23%, cutting contribution margin to 77%.	$309,500	$81,500 gap	Billing and marketing drag makes each dollar work less.
Combined pressure	Revenue falls 10%, variable expenses rise to 23%, and fixed costs rise 10%.	$340,400	$135,200 gap	Weak referrals, slower collections, and payroll ahead of volume hit at once.

What should you verify before signing the orthopedic clinic lease?

Founder checklist

Don’t sign the lease or buy the equipment until the referral pipeline, staffing plan, and cash reserve still work at the 60% launch case. This clinic does not hit breakeven until Month 26, so the real question is whether the first-year setup can absorb the fixed load without a cash crunch.

1Demand flow60% launch case

Verify that referrals and booked visits can fill the 60% capacity case before you lock the lease, because weak intake makes every other cost harder to cover.

2Fixed load$25.8K/mo

Check that the $15,000 lease plus utilities, maintenance, insurance, EHR, supplies, and cleaning still fit under the monthly fixed load you can carry.

3Staff ramp$212.5K/mo

Confirm first-year coverage for 2 surgeons, 4 PAs, 1 radiologist, 3 therapists, 5 nurses, 1 administrator, 2 billing specialists, and 2 receptionists, because payroll starts at $212,500 a month from Month 1.

4Margin mix82% CM

Build the billing workflow so 5% billing services and 2% marketing stay near plan, since the model leaves about 82% contribution margin before payroll and rent.

5Launch capex$2.88M capex

Make sure the MRI, X-ray, surgical equipment, therapy gear, furniture, IT, renovation, ultrasound, and EHR build can be funded without starving working capital.

6Cash reserve$3.159M

Keep enough reserve to survive the Month 25 cash low point, because the model’s minimum cash need is $3.159 million before the clinic starts to pull ahead.