Pigment Manufacturing Break-Even Analysis: $116K Monthly Revenue

Fixed costs $84.7K/mo Base monthly overhead

Contribution margin 72% After variable costs

Break-even revenue $118.3K/mo Revenue cover point

Break-even timing Month 1 Launch payback

Break-even calculator

Check whether monthly pigment sales cover variable expenses and the fixed cost base.

Lean Base Full

Monthly revenue Revenue sets the cash left after direct costs. $ Lower sales Higher sales Variable expenses These rise with output and sales activity. $ Lower costs Higher costs

Money available to cover fixed costs $458,300 $581,667 revenue - $123,367 variable expenses

Margin ratio

79%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead break-even must cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which pigment manufacturing expenses are fixed, and which move with sales?

Cost classification

Break-even is reliable only when per-unit inputs stay in margin and plant overhead stays fixed. In this model, Month 1 break-even depends on separating batch-driven chemicals, labor, testing, and shipping from the $41,800 monthly fixed overhead base.

Expense	Cost	Break-Even Treatment	Common Mistake
Raw Chemical Feedstock	Variable	Treat as direct unit economics. For Organic Red Pigment, this starts at $12 per unit before labor, packaging, energy, and disposal.	Blending it into factory overhead and hiding margin by pigment line.
Direct Production Labor	Variable	Apply per produced unit, from $3 per unit for Industrial White Base to $10 per unit for Custom Yellow Paste.	Treating all plant labor as Variable instead of separating salaried plant management.
Production Energy	Semi-variable	Model a usage-linked charge by batch or unit, since energy runs from $1.00 to $2.00 per unit across the product set.	Classifying all utilities as fixed and overstating margin at higher volume.
Waste Disposal and Hazardous Material Handling	Variable	Tie disposal to production volume and product mix. Custom Yellow Paste carries $3.00 per unit for hazardous material handling.	Using one flat monthly waste estimate despite different handling needs by pigment type.
Quality Control Testing and Laboratory Consumables	Semi-variable	Use a revenue-linked burden because testing and consumables rise with batches, SKUs, and customer specifications.	Leaving testing out of break-even until defects or rework hit cash.
Equipment Maintenance	Semi-fixed	Step maintenance up as production hours and equipment load increase, using the model’s 0.3% to 0.5% revenue range as a guide.	Scaling maintenance smoothly with sales instead of planning capacity-triggered service jumps.
Facility Lease	Fixed	Keep the lease in monthly overhead at $25,000 from Month 1 through Month 60.	Allocating rent per unit and assuming lower volume reduces the cash bill.
Lab Technician Headcount	Semi-fixed	Model headcount in steps: 2.0 FTE in the first year, rising to 6.0 FTE by the mature year.	Hiring too late because the model treats lab work as a perfect variable expense.

How does break-even change from lean to base to full pigment production?

Scenario table

Break-even rises as volume grows, but the cushion gets better because fixed plant costs are spread over more sales. Higher utilization also absorbs lab, lease, and compliance spend more cleanly.

Scenario figures are planning assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean pigment run	$582k	$158k	$84.7k	72.8%	$332k	Break-even is near $116k monthly revenue, so this run clears it with the smallest cushion.
Base pigment run	$1.11m	$278k	$103.5k	75.1%	$718k	Break-even moves near $138k monthly revenue, and better overhead absorption reduces risk.
Full pigment run	$1.74m	$390k	$126.0k	77.6%	$1.20m	Break-even is near $162k monthly revenue, and fuller output gives the strongest cushion.

What breaks the break-even plan for this pigment plant?

Stress test

Year 1 has a wide cushion, but the plan gets squeezed fast if sales soften, fixed overhead climbs, or scrap and rework cut margin. The biggest red flags are feedstock inflation, failed lab batches, late shipments, and underfilled reactors.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.16M	$4.65M cushion	Strong cushion, but uptime still matters.
Revenue shortfall	Sales run 20% below plan.	$1.16M	$3.49M cushion	Still above break-even, but the cushion shrinks fast.
Fixed-cost pressure	Fixed overhead rises 10%.	$1.28M	$4.54M cushion	Lease, compliance, and support costs need tight control.
Margin pressure	Contribution margin drops 5 points from raw material or rework pressure.	$1.25M	$4.57M cushion	Scrap and failed batches can erase margin quickly.
Combined pressure	Sales are 20% lower, fixed overhead is 10% higher, and margin drops 5 points.	$1.38M	$3.28M cushion	The plant still clears break-even, but the cushion thins sharply.

Is the pigment plant ready to lock the lease and equipment before the first production run?

Founder checklist

Don’t commit to the lease, hires, or major equipment until Year 1 demand, pricing, and batch quality all hold. The model shows break-even fast, but the $991K Month 2 cash floor means one bad ramp can still break the plan.

1Year 1 Demand50,000 units

Confirm buyers can absorb the full Year 1 forecast, because the plant needs that volume to keep the line loaded and the fixed base covered.

2Price Mix$90-$250

Check that actual quotes stay inside this range and keep the Year 1 mix strong enough to support about 76.6% contribution before fixed costs.

3Fixed Load$84.7K/mo

Verify lease, insurance, compliance, software, services, safety, and Year 1 payroll stay near this run rate, because that is the burn the cash plan must absorb.

4Feedstock SupplyPre-ramp

Lock raw chemicals, mineral inputs, and specialty materials before production starts, or one supply gap can stop the plant even when orders are in hand.

5Batch YieldQC pass

Run test batches through the lab workflow first and only scale after quality control can release product on time, since failed batches delay cash and waste material.

6Launch Crew6.0 FTE

Make sure the opening team can cover the plant manager, chief chemist, two lab techs, sales, and admin, while holding the $1.315M capex build and the $991K Month 2 cash floor.