Physical Therapist Break-Even Analysis: $54k Monthly Revenue

Fixed costs $9.3K Monthly base cost

Contribution margin 85% After variable costs

Break-even revenue $10.9K Monthly target

Break-even timing Month 26 Model breakeven

Break-even calculator

Use this to test whether monthly revenue covers variable expenses and the fixed cost base.

Lean Base Full

Monthly revenue More monthly sales leave more room for fixed costs and profit. $ Low revenue High revenue Variable expenses Direct therapy, billing, marketing, and software costs rise with sales. $ Low cost High cost

Money available to cover fixed costs $147,366 $170,760 revenue - $23,394 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

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

Break-even chart Revenue Total costs

Which clinic expenses are fixed, and which move with patient visits?

Cost classification

The model reaches break-even in Month 26, so the split matters: fixed overhead sets the monthly hurdle, while visit-linked costs protect margin. If payroll is buried inside visit-level margin, the target visit count will look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Commercial Rent	Fixed	Use $5,000 per month from Month 1 through Month 60.	Spreading rent across visits and understating the base hurdle.
Professional Liability Insurance	Fixed	Use $1,200 per month before calculating required visits.	Treating insurance as a percent of revenue.
Utilities	Semi-variable	Start with the $800 monthly base, then adjust if clinic hours expand.	Leaving utilities flat after adding rooms or evening hours.
Electronic health record software	Semi-variable	Model the $400 base subscription plus the 2.0% per-patient charge in the first year.	Putting all software in fixed overhead.
Therapy Supplies	Variable	Apply 2.5% of revenue in the first year, then use the forecast rate by year.	Using one flat monthly supply budget at higher visit volume.
Billing Service Fees	Variable	Apply 4.5% of revenue in the first year because fees rise with collected activity.	Classifying billing fees as office overhead.
Marketing & Patient Acquisition	Variable	Use 6.0% of revenue in the first year, then step down as forecast.	Locking marketing as fixed while visit volume scales.
Added clinical and admin staffing	Semi-fixed	Add therapists, front desk, and billing roles in salary steps as capacity fills.	Hiding payroll inside visit-level margin instead of modeling hiring steps.

How does break-even shift from a lean caseload to a full clinic load?

Scenario table

A lean mix leaves fixed overhead too heavy, while a base mix clears it and a full mix builds a strong cushion. The big drivers are visit volume, pricing mix, and how much of each dollar stays after variable costs.

These are modeled planning assumptions, not guaranteed results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean caseload	$439k	$66k	$457k	85.0%	-$84k	Fixed costs still outrun contribution, so break-even is out of reach.
Base caseload	$1,193k	$163k	$828k	86.3%	$202k	This mix clears overhead and gives a workable profit cushion.
Full caseload	$2,333k	$282k	$1,174k	87.9%	$877k	High volume creates a strong cushion, but staffing and room use must stay tight.

What breaks the break-even plan for a physical therapy clinic?

Stress test

Launch is tight: first-year revenue sits below break-even, so there’s no cushion on day one. The mature year is safer, but slower visits, weaker collections, and a $5k monthly overhead jump can eat that room fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$538k	$99k gap	First-year revenue is below break-even.
Revenue slip	Year 3 revenue falls 10% to $1.074M.	$959k	$115k cushion	Slower referrals still leave slack, but not much.
Fixed cost up	Monthly fixed overhead rises $5k.	$1.029M	$164k cushion	Rent or staffing inflation cuts the safety buffer.
Margin down	Contribution margin falls from 86.3% to 84.3%.	$982k	$211k cushion	Small reimbursement or collection slippage matters.
Combined shock	Revenue falls 10%, margin drops to 84.3%, and monthly fixed overhead rises $5k.	$1.054M	$20k cushion	One more weak month could wipe out the cushion.

Should you sign the clinic lease before the break-even math clears?

Founder checklist

Not yet. Lock the lease and major build only after the $538K monthly break-even target, the 461-visit floor, and the Month 26 payback path all line up with real referral flow and booked schedules.

1Lease load$9.25K/mo

Test this fixed load against the $538K monthly break-even target before you lock the space, because rent and overhead start before revenue does.

2Demand floor461 visits/mo

Confirm referral sources and direct patient demand can fill 461 monthly break-even visits, or the schedule will look busy while the clinic still loses money.

3Contribution85% CM

Confirm insurance enrollment and billing flow before treating insured patients, because variable costs leave about 85% of each visit to cover wages and rent.

4Booked capacity600 visits/mo

Staff to booked visits, not hope, since Year 1 clinical capacity is about 600 monthly treatments and you need 461 to break even.

5Cash runway$329K

Hold enough cash through the Month 26 break-even mark and the Month 36 low point, because minimum cash still falls to $329K before recovery.

6Capex timing$205K

Phase the $205K equipment and setup spend so build-out, core therapy gear, software, and security land first, and delay advanced modalities until booked demand proves the clinic can carry them.