Pharmacy Break-Even Analysis: $367K Monthly Revenue Target

Fixed costs $20.7K/mo Base overhead

Contribution margin 84.5% After variable costs

Break-even revenue $24.5K/mo Monthly target

Break-even timing Month 7 Model break-even

Break-even calculator

Test whether monthly pharmacy revenue covers direct costs and fixed overhead.

Lean Base Full

Monthly revenue Revenue is the money available to cover direct costs and overhead. $ Low sales High sales Variable expenses Direct drug, product, and payment costs rise with sales. $ Low cost High cost

Money available to cover fixed costs $35,733 $42,288 revenue - $6,555 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base break-even has to cover. $ Lean overhead Higher overhead

Break-even chart Revenue Total costs

Which pharmacy expenses are fixed, and which move with sales?

Cost classification

Break-even gets unreliable when inventory, reimbursement fees, payroll, and software are put in the wrong bucket. Treat sales-linked items as variable, steady monthly bills as fixed, and capacity-driven labor as semi-fixed.

Expense	Cost	Break-Even Treatment	Common Mistake
Retail Space Rent	Fixed	Use $7,500 per month in fixed overhead from Month 1 through Month 60.	Tying rent to prescriptions filled instead of store footprint.
Utilities	Semi-variable	Start with the $1,200 monthly base, then review usage as traffic and refrigeration demand rise.	Treating the full bill as fully fixed when higher volume can lift usage.
Pharmacy Management System Fees	Fixed	Include $800 per month as fixed operating overhead.	Modeling core dispensing software as a per-order fee.
Pharmacist In Charge	Fixed	Use $10,833 per month, based on the $130,000 annual salary at 1.0 FTE.	Moving required pharmacist coverage with sales volume too early.
Pharmacy Technician Year 1	Semi-fixed	Use $5,625 per month in the first year, based on $45,000 salary and 1.5 FTE.	Assuming technician labor rises smoothly with each order instead of in staffing steps.
Wholesale Drug & Product Costs	Variable	Apply 10.0% of sales in the first year, improving to 8.0% by the fifth year.	Treating inventory purchases as fixed overhead instead of sales-linked margin pressure.
PBM & DIR Fees	Variable	Apply 4.0% of sales in the first year for pharmacy benefit manager and direct and indirect remuneration fees.	Leaving reimbursement fees out of contribution margin.
Payment Processing Fees	Variable	Apply 1.5% of sales in the first year, falling to 1.0% by the fifth year.	Putting card fees in fixed overhead instead of each transaction.

How does break-even change from a lean opening month to a base run-rate and a full-capacity month?

Scenario table

Lean months sit closer to the line because rent and payroll stay high while revenue is still building. As the front end and immunization mix improve, margin rises, but added staff also lifts the fixed bar.

These are planning assumptions, not guarantees; payer mix, staffing, and volume can move break-even up or down.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening month	$70,100	$10,866	$31,025	84.5%	$28,209	Revenue clears break-even, but a small dip would trim the cushion.
Base Year 2 run-rate	$129,100	$18,978	$42,067	85.3%	$68,055	Higher volume more than covers payroll and rent, so the cushion is solid.
Full Year 5 capacity	$739,900	$88,788	$61,650	88.0%	$589,462	Strong front-end and immunization mix create a wide cushion, even with heavier staffing.

What breaks the pharmacy break-even plan?

Stress test

The base case clears break-even at about $36,700 in monthly revenue, but the cushion is thin if script volume slips, PBM and DIR fees rise, or labor runs hot. A 10% sales drop or a $5,000 fixed-cost jump moves the target fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$36,700	$0 gap	Base case clears break-even, but only if volume holds.
Revenue shortfall	Revenue runs 10% below plan.	$36,700	$3,100 gap	Lower script volume quickly creates a monthly hole.
Fixed-cost pressure	Fixed costs rise by $5,000 per month.	$42,600	$5,900 gap	Rising overtime, rent, or admin spend pushes the target up fast.
Margin pressure	Contribution margin falls to 82.5%.	$37,600	$900 gap	PBM fee pressure and higher shrink cut contribution margin.
Combined pressure	Revenue is 10% lower, margin is 82.5%, and fixed costs are $36,025.	$43,700	$8,800 gap	This downside case shows how volume, fees, and labor can stack up.

Can this pharmacy clear break-even before you sign the lease and commit launch capital?

Founder checklist

Use this as a go/no-go test. If the lease, staffing, inventory, build spend, and cash cushion do not support the modeled break-even path, delay opening.

1Sales Run$36,700/mo

With 15.5% variable cost, verify the site can support about $36.7K in monthly sales before you sign the lease.

2Fixed Load$31,025/mo

Rent, utilities, insurance, software, cleaning, and Year 1 labor add up to about $31,025 a month, so the lease has to fit that load.

3Staff Cover$130K + 2.5 FTE

Keep the Pharmacist In Charge covered at the $130,000 salary budget and staff Year 1 with 1.5 pharmacy technician FTEs plus 1.0 customer service associate FTE.

4Opening Stock$90,000

Lock the $90,000 opening inventory buy before launch, because prescriptions and shelf stock have to be ready when the doors open.

5Launch Build$165,000

Fund the $165,000 build for fixtures, dispensing, hardware, security, signage, furniture, and refrigeration, and do not open until the payer network and pharmacy management system are working.

6Cash Cushion$647,000

Hold at least $647,000 of cash, since the model bottoms out in Month 6 and a funding gap there can stall the first year.