Patient Advocacy Break-Even Analysis: $22K Monthly Revenue Target

Fixed costs $4.8K/mo Monthly overhead base

Contribution margin 83% After variable costs

Break-even revenue $5.8K/mo Revenue to cover overhead

Break-even timing Month 31 Model crossing point

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a patient advocacy service.

Lean Base Full

Monthly revenue Revenue sets the margin that pays fixed overhead each month. $ Low sales High sales Variable expenses Direct costs here are insurance and payment fees that rise with revenue. $ Low direct High direct

Money available to cover fixed costs $43,102 $46,000 revenue - $2,898 variable expenses

Margin ratio

94%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your margin has to cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which patient advocacy expenses are fixed, and which move with sales?

Cost classification

Break-even gets shaky when fixed overhead, client-delivery percentages, marketing acquisition spend, and hiring steps sit in one bucket. Separate them so monthly overhead, contribution margin, and capacity jumps each hit the model in the right place.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Add $2,500 to monthly overhead; it raises the revenue needed before profit starts.	Spreading rent across clients and making break-even look easier at low volume.
Health Insurance Portability and Accountability Act (HIPAA) CRM and Billing Software	Fixed	Add $450 to monthly overhead; it does not change with each client file.	Treating required admin software like a per-client delivery expense.
Third-Party Medical Consults	Variable	Use 6.0% of first operating year revenue; it reduces contribution margin on each sale.	Putting consults in overhead and overstating margin per client.
Specialized Software Licenses	Variable	Use 4.0% of first operating year revenue; it moves with client-delivery activity.	Confusing usage-linked licenses with the fixed billing platform.
Professional Liability Insurance	Variable	Use 5.0% of first operating year revenue; it lowers contribution margin.	Booking it as flat insurance when the model treats it as revenue-linked.
Payment Processing Fees	Variable	Use 2.5% of first operating year revenue; each paid invoice carries a fee.	Ignoring processing fees because they feel small per transaction.
Marketing Budget and Customer Acquisition Cost	Semi-variable	Model the first operating year at $20,000 and $400 per acquired customer; growth spend rises with acquisition targets.	Mixing marketing with delivery work or treating every dollar as fixed overhead.
Advocacy Payroll Capacity	Semi-fixed	Use the $120,000 lead advocate and $24,000 half-time admin as payroll overhead until the next hire changes capacity.	Treating payroll, marketing, and client delivery work as one bucket.

How does break-even change across a lean launch, the Year 1 base case, and a fuller staffed plan?

Scenario table

Office costs push break-even up fast. The lean version trims rent and utilities, the base case matches the model’s Month 31 break-even, and the fuller plan needs much more monthly revenue to cover added staff and marketing.

Planning assumptions only; real break-even will move with case mix, staffing pace, and collections.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean remote launch	$18,800	$3,290	$15,487	82.5%	$0	Solo remote launch can break even with lower overhead.
Year 1 base case	$22,348	$3,911	$18,437	82.5%	$0	Matches the Month 31 full-model break-even point.
Year 3 staffed growth plan	$59,000	$7,847	$51,186	86.7%	-$33	Staffed growth is very close to break-even, but rounding leaves a small loss.

What breaks the break-even plan first for patient advocacy?

Stress test

The plan is thin at launch: Year 1 break-even is about $22,348 a month on a 17.5% variable-cost load, so a 20% revenue miss creates a roughly $3,700 gap. Add rent or fee creep, and the target moves fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; Year 1 variable costs stay at 17.5% and fixed spend stays at $18,437 per month.	$22,348	$0 gap	No cushion; unpaid admin time hits first.
Revenue shortfall	Monthly revenue runs 20% below the $22,348 target.	$22,348	$3,700 gap	CAC above $400 makes the miss expensive.
Fixed-cost pressure	Monthly rent increases by $2,500 before demand is proven.	$25,400	$3,052 gap	Fixed commitments lock in cash burn.
Margin pressure	Year 1 variable expenses rise from 17.5% to 22.5%.	$23,800	$1,452 gap	Travel-heavy cases and consults squeeze margin fast.
Combined pressure	Monthly revenue stays 20% below target, rent adds $2,500, and variable expenses rise to 22.5%.	$27,014	$9,136 gap	Lower referrals and low utilization can push break-even past Month 31.

What must be true before you commit to rent, hires, and heavier marketing in patient advocacy?

Founder checklist

Do not lock in rent, hires, or bigger ad spend until the referral pipeline, pricing, and case flow can support the Month 31 break-even path. The model needs about 181 billable hours a month at base load, so early demand has to cover that before you add fixed costs.

1Referral Flow$20K

Validate enough referrals and paid inquiries first, because Year 1 marketing is only $20,000 and customer acquisition cost (CAC) is assumed at $400.

2Price Test$120 / $115 / $160

Test these price points before scaling, since Year 1 direct costs total 17.5% and weak pricing cuts the margin that pays payroll.

3Billable Load181 hrs/mo

Use this as the staffing gate, because the base case only works if booked hours cover the lead advocate plus a half-time admin before you add more people.

4Lease Drag$2.5K/mo

Delay the lease if $2,500 rent strains runway, since fixed overhead starts at $4,770 a month before salaries and that drag shows up long before break-even.

5Cash Cushion$480K

Keep this reserve intact until Month 31, because the model’s minimum cash need is $480,000 and payback takes 50 months.

6Launch Gate$400 CAC

Set intake forms, consent, and Health Insurance Portability and Accountability Act (HIPAA) workflow before using client data, then track CAC against the $400 Year 1 assumption so launch demand does not outrun the budget.