Physical Rehabilitation Break-Even Analysis: $35K Monthly Revenue

Fixed costs $30.5K/mo Year 1 base

Contribution margin 86% Left after variable

Break-even revenue $35.4K/mo Monthly target

Break-even timing Month 13 Cumulative flip

Break-even calculator

Test how monthly revenue, variable expenses, and fixed costs shape break-even for a physical rehabilitation clinic.

Lean Base Full

Monthly revenue Revenue sets the pool that has to cover direct costs and overhead. $ Lower volume High volume Variable expenses Use direct costs that rise with each treatment, like supplies and billing fees. $ Low direct cost High direct cost

Money available to cover fixed costs $47,988 $55,800 revenue - $7,812 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your contribution margin must cover. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which physical rehabilitation expenses stay fixed, and which move with treatment volume?

Cost classification

A rehab center’s Month 13 break-even is only useful if rent, staff steps, supplies, and billing fees are split correctly. Blend them into one overhead bucket, and the model hides the real volume needed to cover monthly cash burn.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Lease	Fixed	Carry $10,000 per month from Month 1 through Month 60 before counting treatment margin.	Treating rent as if it falls when patient visits slow.
Insurance Premiums	Fixed	Include $2,000 per month as a base operating expense in every break-even month.	Spreading it across visits and making low-volume months look safer than they are.
EHR Software Subscription	Fixed	Use the $800 monthly subscription as fixed clinic overhead, not a per-treatment fee.	Loading software into each visit and overstating variable expense.
Medical Supplies	Variable	Model at 5.0% of first-year revenue, then use the forecast rate for later years.	Holding supplies flat even as treatment volume and revenue grow.
Therapy Consumables	Variable	Apply 3.0% of first-year revenue because bands, wraps, and similar items move with sessions.	Bundling consumables into facility overhead instead of visit-driven expense.
Billing and Collection Fees	Variable	Use 4.0% of first-year revenue, since collections activity rises with billed treatments.	Mixing billing fees with admin salaries and missing margin drag as volume scales.
Utilities	Semi-variable	Start with the $1,500 monthly baseline, then review usage as hours, rooms, and equipment use rise.	Assuming every dollar is fixed when longer clinic hours can push usage up.
Receptionist	Semi-fixed	Model $35,000 annual salary by full-time equivalent; staffing steps from 1.0 to 2.0 FTE in Year 4.	Treating front-desk labor as one blended overhead bucket with therapist capacity.

How does break-even move from a lean rehab clinic to a larger, fully staffed center?

Scenario table

Lean keeps the clinic close to the line because fixed overhead is high versus revenue. By the base plan, revenue clears break-even, and the fuller setup adds a much wider cushion.

Planning assumptions only; actual results will vary with payer mix, visit fill, and staffing speed.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch clinic	$323k	$45k	$305k	86.0%	-$27k	Still below break-even; the monthly gap stays tight.
Base Year 2 clinic	$655k	$88k	$346k	86.6%	$221k	Above break-even; the clinic starts building a real cushion.
Full Year 4 center	$1,524k	$180k	$476k	88.2%	$868k	Well above break-even; fixed costs are spread much wider.

What happens to break-even if visits slow or costs run hot?

Stress test

The plan is tightest if referrals slow, reimbursement slips, or therapist time goes unused. A 10% revenue miss, higher fixed overhead, or rising variable cost can turn a thin first-year gap into a cash problem.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$350,000	$27,000 gap	There is little cushion in year one.
Revenue shortfall	Revenue falls 10% to $291,000.	$350,000	$55,000 gap	Weak referral flow widens the funding need.
Fixed-cost pressure	Fixed overhead rises by $50,000.	$412,000	$77,000 gap	Higher lease or staffing cost pushes breakeven out.
Margin pressure	Variable expenses rise from 140% to 170%.	$360,000	$37,000 gap	Lower reimbursement and unused therapist capacity cut margin fast.
Combined pressure	Revenue falls 10%, fixed overhead rises $50,000, and variable expenses rise to 170%.	$437,000	$114,000 gap	Hiring ahead of visits and weak volume can blow up cash needs.

Can you prove demand, staffing, and cash runway before you sign the rehab clinic lease?

Founder checklist

Only move ahead if the referral flow, buildout spend, and launch setup can carry the clinic to Month 13 break-even. At 236 planned monthly visits versus 259 break-even visits, the margin for error is thin.

1Referral pipeline236 vs 259

Verify signed referrals and local demand can cover the 23-visit monthly gap before you take on the $10,000 lease.

2Fixed load$30.5K/mo

Check that the $16.3K facility stack plus about $14.2K a month in Year 1 wages still fits the visits you can realistically book.

3Margin mix86% CM

Keep medical supplies, therapy consumables, billing fees, and transportation near 14% of revenue so each visit still carries an 86% contribution margin.

4Buildout spend$125K

Stage the equipment and setup budget across therapy tables, exercise equipment, bikes, weights, ultrasound machines, computers, furniture, room setup, security, and initial supplies.

5Staff ramp40%-65%

Confirm therapist hiring by specialty and credentialing can hit the Year 1 capacity bands without leaving rooms and staff underused.

6Launch runwayMonth 13

Make sure billing, EHR workflow, and launch month readiness are live so cash collection starts on time and reserves can last to break-even.