Phycocyanin Extraction Break-Even Analysis: $122K Monthly Sales

Fixed costs $87.5K/mo Lease, overhead, wages

Contribution margin 33% After variable costs

Break-even revenue $265K/mo Monthly target

Break-even timing Month 2 Launch ramp

Break-even calculator

Test monthly revenue against direct variable costs and fixed monthly overhead to see where break-even lands.

Lean Base Full

Monthly revenue Revenue is the cash coming in before direct costs and fixed overhead. $ Low sales Peak sales Variable expenses Use direct costs that rise with output, shipping, and sales activity. $ Light costs Heavy costs

Money available to cover fixed costs $325,533 $483,750 revenue - $158,217 variable expenses

Margin ratio

67%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base margin must cover. $ Lean overhead High overhead

Break-even chart Revenue Total costs

Which extraction expenses stay fixed, and which move with sales volume?

Cost classification

Break-even is reliable only when fixed overhead, payroll, per-unit inputs, and revenue-linked fees are separated. In the first year, fixed overhead is $31,200/month before $56,250/month payroll and volume-linked production costs.

Expense	Cost	Break-Even Treatment	Common Mistake
Biotech Facility Lease	Fixed	Use $15,000/month as baseline overhead from Month 1 through Month 60.	Spreading lease by unit and hiding the monthly cash burden.
Laboratory Equipment Insurance	Fixed	Include $2,500/month in fixed operating overhead for break-even revenue.	Dropping insurance from break-even because it is not tied to batches.
Fixed Payroll	Fixed	Use first-year wages of $675,000, or $56,250/month, before volume margin.	Treating technical staff as variable labor when salaries are committed.
Cold Chain Logistics	Variable	Apply 6.5% of first-year revenue, then reduce to 4.5% by the mature year.	Modeling logistics as flat freight even though it moves with shipments.
Sales Commissions	Variable	Apply 3.0% of revenue in the first three years, then 2.5% and 2.0%.	Adding commissions to fixed payroll and overstating break-even overhead.
Unit Inputs	Variable	Charge spirulina, nutrients, solvents, stabilizers, packaging, carriers, and cartridges per unit produced.	Using one blended input rate and missing product margin differences.
Energy, Water, Testing, Maintenance, and Waste	Semi-variable	Model as revenue-linked plant usage percentages, with higher rates for more demanding grades.	Calling all facility spend fixed and understating usage at higher output.
Production and Quality Staffing Steps	Semi-fixed	Add staff in blocks as volume rises, including technicians, quality coverage, and senior science roles.	Smoothing headcount across units instead of adding real hiring steps.

How does break-even move as this phycocyanin supply business shifts from lean pilot output to full-scale production?

Scenario table

Higher volume spreads fixed lab and plant costs across more sales, so break-even stays covered in all three cases. The main risk is yield loss, QA failure, or reprocessing pushing variable costs above plan.

Planning numbers only: these break-even figures are model assumptions, not guarantees, and real results can move if yield or QA changes.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean pilot wholesale supply	$230k	$73.9k	$87.5k	67.9%	$68.7k	Break-even sits near $129k/month, so sales are above it.
Base steady-state output	$483.8k	$158.2k	$131.2k	67.3%	$194.3k	Break-even sits near $195k/month, leaving a wider cushion.
Full-scale expanded production	$784.5k	$255.6k	$182.9k	67.4%	$346.1k	Break-even rises to about $271k/month, but sales still clear it.

What pressures the break-even plan most for this phycocyanin business?

Stress test

Year 1 has a healthy cushion, but it narrows fast if sales miss, staffing and compliance costs rise, or extraction yield slips. The worst case here is the combo: Year 5 overhead plus Year 1 margin turns profit into about an $18,000 monthly loss.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$122,000/month	$108,000 cushion	Launch starts with solid room above break-even.
Revenue shortfall	Monthly revenue falls to $122,000, the break-even line.	$122,000/month	$0 gap	Any further sales miss turns monthly profit negative.
Fixed-cost pressure	Fixed overhead rises to $131,200/month in Year 3.	$183,000/month	$47,000 cushion	Hiring, audits, and plant overhead eat most of the slack.
Margin pressure	Variable costs rise 1 point to 29.3%, cutting margin to 70.7%.	$124,000/month	$106,000 cushion	Lower yield, costlier inputs, or freight hikes cut contribution fast.
Combined pressure	Fixed overhead climbs to $182,900/month while revenue stays at $230,000 and margin stays at 71.7%.	$255,000/month	$25,000 gap	That mix creates about an $18,000 monthly operating loss.

Should you sign the lease and buy the extraction line yet?

Founder checklist

Not yet unless you can prove 8,100 Year 1 units, accepted wholesale prices from $220 to $850, and steady batches. The model shows Month 2 break-even, but the real guardrails are a $31.2K monthly fixed load, a $1.495M buildout, and $350K minimum cash in Month 10.

1Launch demand8,100 units

Confirm the buyer pipeline can absorb the Year 1 mix of 8,100 units, because that is the volume behind the $2.76M revenue plan.

2Price test$220-$850/unit

Test the wholesale range with real orders first, because Year 1 pricing only works if buyers accept the full band from $220 to $850 per unit.

3Supplier cover5 inputs

Secure backup supply for spirulina, nutrients, solvents, stabilizers, and packaging so a single missed input does not stop production.

4QA repeatability76% CM

Track batch yield, purification loss, QA pass rate, and rework time, because the Year 1 model still needs about 76% blended contribution margin after unit inputs, 6.5% cold chain logistics, and 3.0% commissions.

5Fixed load$31.2K/mo

Know the monthly fixed burn from the lease, insurance, software, audits, marketing, and legal before you commit to the facility and headcount.

6Cash runway$350K

Hold at least $350K through Month 10, stage the $1.495M capex across the lab and plant, and wait on Year 3 hires until revenue can carry about $182K per month.