Radio Advertising Break-Even Analysis: $91K Monthly Revenue Target

Fixed costs $9.7K/mo Overhead floor

Contribution margin 84% After variable costs

Break-even revenue $11.5K/mo Revenue floor

Break-even timing Month 17 Model break-even

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against the break-even point for a radio advertising service.

Lean Base Full

Monthly revenue Revenue sets the margin pool that pays fixed costs. $ Low sales High sales Variable expenses These rise with each deal and eat into contribution margin. $ Light costs Heavy costs

Money available to cover fixed costs $84,000 $112,000 revenue - $28,000 variable expenses

Margin ratio

75%

Covers fixed costs

Yes

Fixed monthly costs This is the cost base the business must cover each month. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses stay fixed and which move with ad sales?

Cost classification

Break-even gets shaky when overhead, commissions, and planned acquisition spend are mixed together. Separate the monthly floor from deal-linked costs before using Month 17 as the target break-even point.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Include $3,500/month in overhead from Month 1 through Month 60.	Treating rent as if it rises with ad volume.
Legal & Accounting Services	Fixed	Include $1,500/month in the monthly overhead floor.	Tying professional fees to order count or campaign spend.
General Software Subscriptions	Fixed	Include $800/month as recurring operating overhead.	Burying platform tools inside variable delivery expense.
CEO, CTO / Lead Engineer, and Head of Sales Payroll	Semi-fixed	Model as a staffing floor that steps up when new full-time roles are added.	Spreading leadership payroll across each ad order.
Sales Commissions	Variable	Apply 7.0% of revenue in the first year, declining by forecast year.	Putting commissions in overhead and overstating contribution margin.
Customer Support Scaling	Variable	Apply 3.0% of revenue in the first year as sales activity grows.	Assuming support stays flat while buyer and seller volume grows.
Server Hosting & Platform Maintenance	Variable	Apply 4.0% of revenue in the first year, then use the forecast percentage by year.	Calling hosting fixed and missing usage-linked platform load.
Buyer and Seller Acquisition Budgets	Semi-variable	Plan annual budgets separately, then test volume using buyer CAC and seller CAC.	Mixing planned marketing spend with pure per-order variable expense.

How does break-even change across lean, base, and fuller radio ad sales scenarios?

Scenario table

Break-even shifts mainly with fixed overhead: $472k in lean, $764k in base, and about $1.122M in full. The fuller case also improves the contribution margin ratio to 85.4%, so the real test is whether station access and advertiser volume can cover the bigger load.

Planning assumptions only; actual break-even will move with mix, pricing, and selling costs.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean radio sales book	$562k	$90k	$472k	84%	$0	Lean overhead can break even fast if deal flow stays steady.
Base radio sales book	$910k	$146k	$764k	84%	$0	This is the balanced case; it works if acquisition spend and sales output hold to plan.
Fuller radio sales book	$1.314M	$192k	$1.122M	85.4%	$0	Higher overhead needs stronger station access and advertiser volume to stay safe.

What breaks the break-even plan for radio advertising?

Stress test

Radio advertising breaks fast if ad sales slip or costs climb. At the base plan, a 15% revenue miss becomes about a $114K monthly loss, and a 10% fixed-cost jump pushes break-even to about $1.0M.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$910K	$0 cushion	Plan sits at break-even.
Revenue shortfall	Revenue falls 15% to about $774K.	$910K	$114K gap	Slower advertiser acquisition turns profit negative.
Fixed-cost increase	Fixed costs rise 10% to about $840K.	$1.00M	$90K gap	Overhead leaves less room for error.
Margin pressure	Variable expenses rise from 16% to 20%.	$955K	$45K gap	Higher station rates squeeze margin.
Combined pressure	Revenue falls 15%, variable expenses hit 20%, and fixed costs rise 10%.	$1.05M	$221K gap	Small misses stack into a large monthly loss.

What should the founder verify before locking in radio advertising commitments?

Founder checklist

Test booked demand, station access, pricing, and cash before you lock major commitments. With Year 1 EBITDA at -$350K, minimum cash at $358K in Month 16, and break-even in Month 17, this only works if the pipeline is real.

1Demand proofAOV: $500/$1.5K/$5K

Verify enough booked advertisers at the Year 1 small business, mid-market, and enterprise AOVs so rep time is paid for before you hire past the core team.

2Station accessMix: 60/30/10

Confirm coverage across local stations, regional networks, and national broadcasters, and keep approval timing tight so you do not lock long airtime before demand is sold.

3Unit margin16% load

Build billing rules around the $10 fixed commission plus 10% of order value, and make sure the buyer and seller subscriptions support the Year 1 variable load before sales commissions start hitting cash.

4Fixed burn$9.7K/mo

Check the monthly base burn from rent, software, cybersecurity, ads, insurance, and travel first, then add payroll only as the pipeline proves it can carry the higher run rate.

5Team rampM7/M13/M19

Keep hiring to core roles until demand supports the Month 7 marketing hire, the Month 13 engineer and operations add-ons, and the Month 19 customer success role.

6Cash runway$358K M16

Hold enough cash through the Month 16 trough and treat Month 17 break-even as a planning milestone, not a promise, because payback takes 31 months.