Physics Kit Business Break-Even Analysis: Month 2 Target

Fixed costs $36.0K/mo Lease, staff, tools

Contribution margin 72.8% After variable costs

Break-even revenue $49.5K/mo Monthly target

Break-even timing Month 2 Early launch

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a physics kit business.

Lean Base Full

Monthly revenue Sales bring in the cash that has to cover direct costs and overhead. $ Soft start Scale month Variable expenses Use costs that rise with each kit sold, like materials, assembly, shipping, and marketing. $ Low direct cost High direct cost

Money available to cover fixed costs $67,600 $76,000 revenue - $8,400 variable expenses

Margin ratio

89%

Covers fixed costs

Yes

Fixed monthly costs Use overhead that stays on, like rent, salaries, software, and insurance. $ Lean base Heavy base

Break-even chart Revenue Total costs

Which physics kit expenses are fixed, and which move with sales?

Cost classification

Break-even works only if fixed monthly spend stays separate from per-kit and revenue-linked spend. Here, first-year payroll is $337.5k, or about $28.1k/month, while materials, marketing, shipping, and production percentages move with sales.

Expense	Cost	Break-Even Treatment	Common Mistake
Warehouse and Office Lease	Fixed	Use $4,500/month as stable overhead from Month 1 through Month 60.	Spreading rent across kits and hiding true monthly break-even.
Utilities and High Speed Internet	Fixed	Use $650/month in the base monthly overhead stack.	Treating normal utility spend as if it rises with every kit sold.
SaaS and E-commerce Platform Fees	Fixed	Use $800/month as recurring platform overhead for break-even.	Mixing platform development spend into monthly operating break-even.
Base Staff Payroll	Fixed	Use first-year wages of $337.5k, about $28.1k/month, as committed labor.	Forgetting payroll when testing whether Month 2 break-even is durable.
Kit Materials, Manuals, and Packaging	Variable	Apply per-unit inputs, such as $4.50 structural components, $2.00 manuals, and $1.50 packaging.	Blending per-kit materials with overhead and overstating contribution margin.
Production Percentage Items	Variable	Apply the 4.0% total: 1.5% manufacturing overhead, 1.0% quality control labor, and three 0.5% items.	Calling all production overhead fixed when the model ties it to revenue.
Digital Marketing and Lead Acquisition	Variable	Use 4.0% of first-year revenue, falling to 2.0% by the mature year.	Locking marketing as a flat budget and missing sales-linked spend.
Added Sales, Support, and Logistics Headcount	Semi-fixed	Add payroll in steps as scale rises, such as sales reps moving from 1.0 to 4.0 FTE.	Assuming headcount grows smoothly with each kit instead of in hiring blocks.

How does break-even shift from a lean launch to a full rollout for physics experiment kits?

Scenario table

Lean launch is closest to the edge because fixed payroll and overhead are already on. Base and full cases spread those costs across more kits, so the cushion widens, but school mix and shipping can still move the margin.

Planning cases only; school order mix and freight can move the margin.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$76.0k	$16.3k	$36.0k	78.6%	$19.3k	Break-even lands by Month 2, so launch timing matters.
Base case	$236.3k	$46.1k	$46.9k	80.5%	$134.6k	More volume gives a wider cushion against overhead and freight swings.
Full launch	$545.7k	$96.2k	$60.4k	82.4%	$361.4k	Strong cushion here, but shipping and order mix still set the margin.

What breaks the break-even plan if school orders slow or costs rise?

Stress test

Year 1 still clears break-even, but the cushion is thin enough to defend. A 20% revenue miss, a 15% cost jump, or a rise to 30% variable expense each cuts that buffer fast; together, they nearly wipe it out.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	Base Year 1 plan holds.	$46k/month	$30k cushion	Healthy on paper, but the early cushion is not large.
Revenue shortfall	Monthly revenue drops 20% to about $61k.	$46k/month	$15k cushion	Still above break-even, but half the buffer is gone.
Fixed-cost pressure	Overhead and payroll rise 15% before demand is proven.	$53k/month	$23k cushion	Fixed costs eat into the launch buffer fast.
Margin pressure	Variable expenses rise to 30% from higher shipping and freight claims.	$51k/month	$25k cushion	Margin erosion moves break-even up even if sales hold.
Combined pressure	Revenue drops 20%, overhead and payroll rise 15%, and variable expenses rise to 30%.	$59k/month	$2k cushion	Low adoption plus cost creep can erase the Month 2 signal.

What should you verify before signing the lease and buying the first kit run?

Founder checklist

Confirm real demand, kit margins, and warehouse flow before you lock in lease, staff, and bulk inventory. With Year 1 revenue at $912K, EBITDA at $232K, and minimum cash of $1.118M in Month 2, the model only works if orders and fulfillment both hold.

1Demand proof7,500 kits

Run sample kits with students and teachers before you order beyond the $45K initial inventory, because Year 1 output already assumes 7,500 kits.

2Price band$95-$145

Make sure quotes and test orders hold the Year 1 selling range, because the model depends on five kits priced from $95 to $145.

3Supplier margin78% CM

Lock quotes for structural parts, electronics, lenses, sensors, magnets, manuals, and packaging, then verify the full variable stack still leaves about 78% contribution margin before fixed costs.

4Fixed load$36.0K/mo

Check lease, software, insurance, travel, and wages against the monthly burn; fixed costs run about $36.0K per month before variable spend.

5Capacity ramp49,500 kits

Stress-test warehouse space and assembly flow against 7,500 Year 1 kits and 49,500 Year 5 kits so hiring stays ahead of bottlenecks.

6Automation timing$55K

Track school orders separately from direct online orders, and delay the $55K packaging automation buy until manual packing is the bottleneck.