Recreation Center Break-Even Analysis: $62K Monthly Revenue

Fixed costs $53.2K/mo Base plus payroll

Contribution margin 86% After variable costs

Break-even revenue $61.8K/mo Revenue needed

Break-even timing Month 1 Launch month

Break-even calculator

Test monthly revenue against variable expenses and fixed costs to see when the recreation center clears break-even.

Lean Base Full

Monthly revenue Revenue is the pool that covers variable and fixed costs. $ Lower sales Higher sales Variable expenses These rise with visits, classes, and card fees. $ Lower costs Higher costs

Money available to cover fixed costs $145,775 $166,792 revenue - $21,017 variable expenses

Margin ratio

87%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the margin must cover. $ Lean overhead Heavier overhead

Break-even chart Revenue Total costs

Which recreation center fixed costs move with visits, classes, rentals, and sales?

Cost classification

For this facility, keep fixed lines in monthly coverage and percentage expenses in contribution margin. Misclassifying payroll or utilities can make the Month 1 break-even point look cleaner than the cash reality.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Taxes	Fixed	Include $5,000 per month in fixed monthly coverage.	Spreading it per visit and hiding the monthly hurdle.
Facility Insurance	Fixed	Include $3,000 per month before calculating break-even volume.	Treating insurance as lower when attendance is slow.
Utilities: Base Utilities plus Utilities Variable Portion	Semi-variable	Include $4,000 base monthly coverage and 3% Year 1 usage in contribution margin.	Treating all utilities as fully variable.
Payroll by Staffing Level	Semi-fixed	Model Year 1 wages of $410,000 annually, then step up with planned FTE growth.	Assuming labor flexes dollar-for-dollar with visits.
Payment Processing Fees	Variable	Deduct the 2% Year 1 rate from revenue in contribution margin.	Putting card fees below break-even as overhead.
Program Supplies	Variable	Deduct the 1% Year 1 rate from program and activity revenue.	Ignoring supplies when class registrations grow.
Marketing Advertising	Variable	Deduct the 8% Year 1 rate from revenue before covering fixed expenses.	Budgeting marketing as flat while volume depends on acquisition spend.

How does break-even change across lean, base, and full recreation center scenarios?

Scenario table

As the center scales from lean to full, break-even gets easier because revenue grows faster than fixed payroll and overhead. The lean case still clears break-even, but the cushion gets much better by Year 3 and Year 5.

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

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening year	$108.3K	$15.2K	$44.7K	86.0%	$48.6K	Above break-even, but the cushion is still thin.
Base Year 3 scale	$231.6K	$26.6K	$64.3K	88.5%	$140.7K	Best balance of scale and margin, with less break-even risk.
Full Year 5 scale	$333.8K	$33.7K	$75.3K	89.9%	$224.8K	Strong cushion; higher staffing still stays well above break-even.

What pressures the recreation center break-even plan?

Stress test

The plan clears break-even now, but a 10% revenue miss, a 10% fixed-cost jump, or variable expenses moving from 14% to 17% all squeeze the cushion. Lower class fill and higher labor hours together are the main warning sign.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; revenue stays at $1.083M/month and variable expenses stay at 14%.	$618K/month	$465K cushion	The plan clears break-even, but the cushion is not huge.
Revenue shortfall	Revenue runs 10% below plan at $975K/month from weaker attendance or fewer rentals.	$618K/month	$357K cushion	Lower visits still cover break-even, but the cushion drops fast.
Fixed-cost increase	Fixed costs rise 10% as property taxes, insurance, or base utilities increase.	$680K/month	$403K cushion	Higher overhead pushes the break-even line up and cuts room to absorb misses.
Margin pressure	Variable expenses rise from 14% to 17% from lower fill and more labor hours.	$641K/month	$442K cushion	A small margin slip still clears break-even, but cost control matters.
Combined pressure	Revenue falls 10%, variable expenses rise to 17%, and fixed costs rise 10%.	$705K/month	$270K cushion	This is the tightest case; class fill and labor discipline have to hold.

What should a recreation center founder verify before signing the lease and buying equipment?

Founder checklist

Don't sign the lease or buy the big equipment until the site can handle Year 1 traffic, the program and rental pipeline is real, and the cash plan survives the Month 9 trough. On this model, break-even only holds if traffic, staffing, and capex all line up together.

1Site Capacity60K visits

Verify the building can handle 50,000 member visits and 10,000 daily pass visits in Year 1 without choke points, because crowded floors and long waits hurt renewals fast.

2Program Demand2K / 100

Confirm demand for 2,000 program registrations and 100 facility rental events in Year 1, since those higher-value uses help fill the revenue gap faster.

3Operating Load$53.2K/mo

Verify the center can carry about $53,200 a month in payroll and fixed bills, because that base load must clear before variable costs and profit show up.

4Capex Stack$690K

Confirm the full build-out and equipment spend stays funded before opening, because the biggest cash hits land early and traffic ramps later.

5Margin Mix86% CM

Check that the mix still leaves about 86% after the 14% variable load from supplies, payment fees, marketing, and variable utilities, because that spread pays the overhead.

6Cash Cushion$516K / M9

Hold at least the $516,000 minimum cash shown for Month 9, or a slow stretch can force cuts before the payback window arrives.