Plastic Recycling Break-Even Revenue: About $301K/Month

Fixed costs $54.0K/mo Base overhead

Contribution margin 49% After variable costs

Break-even revenue $109.5K/mo Revenue at zero

Break-even timing Month 2 Forecast breakeven

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a plastic recycling facility.

Lean Base Full

Monthly revenue Revenue sets the pool that has to cover direct costs and fixed overhead. $ Soft start Scaled output Variable expenses Use costs that rise with output, like feedstock, transport, energy, and direct labor. $ Tighter cost Higher cost

Money available to cover fixed costs $1,161,417 $2,450,000 revenue - $1,288,583 variable expenses

Margin ratio

47%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead base break-even must cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which plastic recycling expenses are fixed, and which move with sales volume?

Cost classification

Break-even only works if rent, base utilities, materials, labor, and selling fees are separated by behavior. Misclassifying variable production inputs as fixed can make Month 2 break-even look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Rent	Fixed	Use $25,000 per month in fixed overhead from Month 1 through Month 60.	Spreading rent across units and hiding the true monthly hurdle.
Utilities Base	Fixed	Use $8,000 per month as the base plant utility load before unit-level energy.	Treating all utilities as usage-based and understating idle-month burn.
Raw Material PET	Variable	Apply $300 per rPET Flakes unit sold or produced in contribution margin.	Using a single blended material rate across PET, HDPE, PP, LDPE, and lumber.
Energy Cost PET	Variable	Apply $100 per rPET Flakes unit as production volume rises.	Putting production energy inside base utilities and overstating gross margin.
Sales Commissions	Variable	Apply 3.0% of revenue in the first year, then use the lower forecast rates by year.	Modeling commissions as payroll and missing the sales-linked drag on margin.
Outbound Logistics	Variable	Apply 2.5% of revenue in the first year, then use the forecast rate declines.	Ignoring freight as revenue grows and overstating break-even contribution.
Production labor tied to throughput	Semi-variable	Split direct labor per unit from staffed plant roles when testing volume changes.	Treating all labor as fixed even when shifts expand with output.
Operations Supervisor and Production Technician staffing	Semi-fixed	Step staffing up as volume grows, including technician FTE increases from 10.0 in Year 1 to 22.0 in Year 5.	Smoothing headcount into a clean percentage and missing step changes.

How does break-even change from lean startup output to full utilization in plastic recycling?

Scenario table

The business stays above break-even in all three cases, and the cushion widens as throughput rises. Here’s the quick math: monthly revenue grows faster than fixed costs, so the real risk is feedstock supply, contract pricing, and plant uptime.

Planning assumptions only; actual break-even will move with feedstock mix, uptime, and contract pricing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean startup mix	$2.45M	$1.13M	$149K	53.8%	$1.17M	Above break-even, but feedstock or uptime slips can thin the cushion.
Base operating mix	$3.90M	$1.71M	$187K	56.1%	$2.00M	Healthy buffer; contracts and uptime keep break-even risk low.
Full-utilization mix	$5.97M	$2.49M	$239K	58.3%	$3.24M	Strong cushion; the main watchout is keeping supply and throughput steady.

What breaks the break-even plan if resin prices fall or plant costs rise?

Stress test

The opening year has a solid cushion, but it shrinks fast if selling prices fall, contamination lifts wash and transport costs, or payroll adds fixed load. The combined case is the one to watch because it hits revenue and margin together.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$3.31M	$26.09M cushion	Healthy opening-year buffer.
Revenue shortfall	All selling prices fall 10%.	$3.62M	$22.84M cushion	Lower resin pricing trims the buffer fast.
Fixed-cost pressure	Production Technicians rise from 10.0 to 12.0 FTE.	$3.52M	$25.88M cushion	Payroll creep lifts the break-even line.
Margin pressure	Contamination lifts variable costs by 5.0% of revenue.	$3.65M	$25.75M cushion	More wash, transport, and yield loss eat margin.
Combined pressure	Prices fall 10%, variable costs rise 5.0%, and 2.0 technician FTE are added.	$4.27M	$22.19M cushion	Revenue and margin drop together, so coverage weakens fastest.

What should the founder verify before signing the lease and buying the first recycling line?

Founder checklist

Verify Year 1 sales, feedstock, and plant load before you sign the lease or buy the first line. The model shows break-even by Month 2, but cash still drops to -$430K in Month 5, so the launch has to clear the math fast.

1Offtake Demand10k/8k/6k/3k/1k

Confirm buyers can take the full Year 1 mix of rPET flakes, rHDPE pellets, rPP pellets, recycled LDPE granules, and mixed plastic lumber before you commit to output.

2Feedstock LockPre-ramp

Lock PET, HDPE, PP, LDPE, and mixed waste supply before you add line hours, because the plant cannot hit break-even if inbound material is late or inconsistent.

3Margin Check53.8% CM

Verify the blended contribution margin stays near 53.8% after direct costs, commissions, and outbound logistics, or the Month 2 break-even case gets thin fast.

4Ramp Load17 FTE

Match the Year 1 staffing load of 17 FTE to the sorting, washing, extrusion, pelletizing, and granulation plan, because labor and utility load must rise with throughput.

5Fixed Floor$148.6K/mo

Budget about $148.6K each month for $54.0K non-payroll fixed overhead plus roughly $94.6K in Year 1 salaries, so the plant can survive before volume ramps.

6Cash Cushion-$430K M5

Keep enough working capital for the Month 5 cash low and stage the $6.7M capex build in order, or the project can run out of cash before it stabilizes.