Oxygen Plant Break-Even Analysis: ~$99K Monthly Revenue

Fixed costs $82.1K/mo All-in base

Contribution margin 89.7% After variable costs

Break-even revenue $91.6K/mo Monthly target

Break-even timing Month 1 First profit month

Break-even calculator

Use this calculator to test monthly revenue against direct costs and fixed overhead.

Lean Base Full

Monthly revenue Revenue drives the margin left after direct costs and before fixed overhead. $ Low sales High sales Variable expenses Use direct production, testing, packaging, and delivery costs that rise with output. $ Lower cost Higher cost

Money available to cover fixed costs $356,069 $416,875 revenue - $60,806 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly costs the plant must cover before profit starts. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which oxygen plant expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful if each expense behaves the right way in the model. Treat base rent, usage power, unit labor, testing, and delivery differently, or Month 1 break-even can look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Plant Lease/Rent	Fixed	Hold at $15,000 per month in the operating break-even model.	Spreading rent per cylinder and hiding the true monthly hurdle.
Utilities Base and Electricity Production	Semi-variable	Model the $2,500 monthly base separately from electricity production percentages and per-unit power.	Treating all electricity as Fixed, even when output drives usage.
Sales Commissions	Variable	Apply to revenue, starting at 3.0% in the first year and declining to 2.0% by the fifth year.	Leaving commissions below gross margin and overstating contribution.
Delivery Charges & Logistics	Variable	Apply to revenue, starting at 2.0% in the first year and declining to 1.2% by the fifth year.	Treating delivery as overhead instead of a sales-linked expense.
Direct Labor per Unit	Variable	Attach labor to units filled, loaded, assembled, or rented, such as $0.50 per medical cylinder.	Treating all labor as Variable and missing salaried staffing steps.
Plant Maintenance Contracts	Semi-fixed	Start with $3,500 per month, then step up only when added capacity requires more coverage.	Treating all maintenance as Fixed across every utilization level.
Quality Control Testing and Testing Materials	Variable	Link testing to production volume, including percentage testing and per-unit testing materials.	Treating compliance testing as optional when it protects sellable output.
Insurance & Regulatory Compliance	Fixed	Hold at $1,800 per month for the relevant planning range.	Moving compliance with sales and understating low-volume break-even risk.

How does break-even change across lean, base, and full oxygen plant cases?

Scenario table

Break-even gets easier as the plant moves from the Year 1 mix to the Year 5 mix. Industrial oxygen bulk drives the lean case, but higher volume and slightly better margin in the full case give the widest cushion over fixed cost.

Planning assumptions only; actual break-even will move with plant uptime, product mix, pricing, and compliance cost.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 mix	$256.7k	$44.4k	$82.1k	82.7%	$130.1k	Above break-even, but the cushion is thinnest here.
Base Year 3 mix	$500.2k	$82.1k	$94.6k	83.6%	$323.5k	Comfortable cushion; this is the clearest middle case.
Full Year 5 mix	$894.6k	$138.6k	$113.0k	84.6%	$643.1k	Strongest cushion; fixed cost is spread across the most volume.

What pushes the oxygen plant below break-even?

Stress test

Year 1 has about $2.567 million in monthly revenue, $821,000 in fixed monthly cost, and a $993,000 break-even point, so the plan starts with a $1.574 million cushion. Sales below about 39% of plan, or higher power and delivery costs, can erase it.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; use Year 1 plan.	$993k	$1,574k cushion	Strong buffer if sales hold.
Revenue shortfall	Monthly sales slide to 39% of Year 1 plan.	$993k	$8k cushion	Any further drop turns the cushion into a gap.
Fixed-cost pressure	Add one plant operator and one delivery driver.	$1,003k	$1,564k cushion	Payroll growth trims cushion, but the model still holds.
Margin pressure	Variable costs rise from 17.3% to 22.3% of sales.	$1,058k	$1,509k cushion	Power, delivery, and test cost inflation lifts the floor.
Combined pressure	Sales fall to 35% of plan and costs rise.	$1,068k	$170k gap	Weak offtake plus higher cost load pushes below break-even.

What must be true before you commit to the oxygen plant build?

Founder checklist

The model says operating break-even starts in Month 1, but cash still falls to -$1.8M in Month 6. So before you spend on the plant, prove offtake, utility capacity, QA, staffing, and a cash cushion are locked in.

1Offtake proof23,000 units

Lock buyers for 15,000 medical cylinders and 8,000 industrial bulk units before ordering capacity, because unfilled opening demand makes every fixed cost harder to absorb.

2Fixed burn$82.1k/mo

Check the full Year 1 fixed load, including $15k plant rent, $3k office rent, and 10 FTE payroll, so the lease does not outrun early sales.

3Margin stack88% CM

Confirm the product mix keeps contribution near 88% after revenue-based direct costs, because margin is what pays for rent, payroll, and plant overhead.

4Utility ready$150k + $120k

Verify utility capacity, the $150k backup generator, and the $120k lab before medical supply commitments, because production and purity checks must work before volume ramps.

5Staffing ramp10 FTE

Match the 10 FTE plan, including drivers, to route density so labor only scales with signed volume, not with empty miles.

6Cash trough-$1.8M M6

Protect enough reserve for the Month 6 low point, because the model still shows a cash trough of -$1.8M even with Month 1 operating breakeven.