Sleep Apnea Positional Therapy Device Break-Even: $115K/Month

Fixed costs $74.3K/mo Launch cost base

Contribution margin 81% After variable costs

Break-even revenue $91.8K/mo Monthly target

Break-even timing Month 2 Model break-even

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for a positional therapy device business.

Lean Base Full

Monthly revenue Revenue drives the margin available to cover fixed costs. $ Lower sales Higher sales Variable expenses Use direct costs that rise with each sale. $ Lower cost Higher cost

Money available to cover fixed costs $572,183 $912,500 revenue - $340,317 variable expenses

Margin ratio

63%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead contribution margin has to cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which sleep apnea device expenses are fixed, and which move with sales?

Cost classification

Break-even is only reliable when unit-linked spend, monthly overhead, and upfront cash needs stay separate. Here, percentage-of-revenue reserves lower contribution margin, while rent, audits, software, and payroll raise the monthly hurdle.

Expense	Cost	Break-Even Treatment	Common Mistake
Components, assembly, and packaging	Variable	Lowers contribution margin because materials, labor, and packaging rise with each unit produced.	Using one blended unit cost and missing product mix shifts.
Quality inspection, warranty reserve, inbound freight, inventory insurance, and manufacturing oversight	Variable	Lowers contribution margin; these items total 6.0% of revenue in the model.	Ignoring percentage-of-revenue reserves when testing break-even.
Digital marketing and acquisition	Variable	Lowers contribution margin because it is modeled as 10.0% of revenue in the first year, declining to 7.0% by the fifth year.	Treating acquisition spend as fixed while sales scale.
Sales commissions and DME rebates	Variable	Lowers contribution margin because the charge moves with revenue, from 3.0% in the first year to 4.0% from the third year onward.	Counting gross sales but leaving rebates below the line.
Lab rent, cloud security, regulatory audits, liability insurance, software, and office overhead	Fixed	Raises fixed monthly costs by $20,600 before payroll.	Spreading stable monthly overhead across units too early.
Payroll for leadership, engineering, regulatory, development, sales, and support	Semi-fixed	Raises fixed monthly costs in headcount steps as full-time employees increase from launch through scale.	Excluding payroll from fixed costs and overstating break-even speed.
Tooling, testing equipment, patent filings, and monitoring hardware	Semi-fixed	Creates upfront cash need during launch rather than lowering monthly contribution margin.	Treating tooling as per-unit spend instead of a launch cash requirement.

How does break-even change as this sleep apnea device moves from a lean launch to base and full scale?

Scenario table

As revenue scales faster than fixed overhead, break-even gets easier to clear. The key check is whether each launch step keeps monthly revenue ahead of the growing salary, support, and compliance load.

Planning figures are model assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$192.5k	$75.8k	$74.4k	60.7%	$42.3k	Revenue clears break-even, but the cushion is only about $70k a month.
Base launch case	$508.8k	$192.3k	$108.1k	62.2%	$208.3k	Revenue is well above break-even, so the base case can absorb higher overhead.
Full launch case	$912.5k	$340.3k	$131.4k	62.7%	$440.8k	Scale creates the widest buffer, but inventory and hiring now drive cash needs.

What breaks the break-even plan if sales slip or costs rise?

Stress test

The base plan clears break-even by a wide margin, but that cushion shrinks fast if monthly revenue falls, overhead rises, or warranty and acquisition costs run hot. The combined case gets close to break-even.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$115,000	$77,500 cushion	Base plan keeps a wide cushion.
Revenue shortfall	Monthly revenue slips to $154,000.	$115,000	$39,000 cushion	Slower channel conversion cuts the cushion.
Fixed-cost pressure	Monthly overhead rises to $85,500.	$131,741	$60,759 cushion	Overhead creep lifts the required run rate.
Margin pressure	Contribution margin falls to 55%.	$135,182	$57,318 cushion	Warranty reserve overrun can squeeze margin.
Combined pressure	Revenue slips to $154,000, margin falls to 55%, and overhead rises to $85,500.	$155,455	$1,455 gap	Acquisition cost creep can erase the last cushion.

Can this sleep-apnea device business clear break-even before you hire and buy inventory?

Founder checklist

Don’t commit to hiring and inventory until the first-year demand, $74.35K monthly fixed-cost base, and unit costs all hold up. If any one misses, the Month 2 cash trough gets worse fast.

1Demand proof$2.31M Y1

Confirm the first-year mix can really sell through 8,000 main devices and 2,000 premium devices, plus accessories, before you add staff or place inventory orders.

2Fixed load$74.35K/mo

Check that payroll and overhead stay at $74,350 a month before inventory, because that base cost is what the sales plan has to cover.

3Unit margin$19-$45 COGS

Validate quoted build costs at $30 for the main device, $45 for the premium device, $19 for the lower-price device, $9 for straps, and $14 for the charging case before supplier commitments.

4Staff ramp1→12 FTE

Make sure sales and clinical outreach can scale from 1.0 FTE in Year 1 to 12.0 FTE in Year 5 without hiring ahead of demand.

5Cash trough$1.102M

Fund the Month 2 cash trough first, since the model shows minimum cash of $1.102M before paid launch spend and inventory pressure hit hardest.

6Launch drag10% / 3%

Stress test 10% acquisition spend and 3% commissions, then make sure support, returns, warranty claims, and fulfillment do not eat the modeled contribution margin.