Recycling Center Break-Even Analysis: $129K Monthly Revenue

Fixed costs $113.9K/mo Overhead base

Contribution margin 88.4% After variable costs

Break-even revenue $128.8K/mo Monthly target

Break-even timing Month 1 Launch break-even

Break-even calculator

Test how monthly revenue, direct costs, and fixed costs move your break-even point for a recycling facility.

Lean Base Full

Monthly revenue Revenue drives the margin that can cover fixed costs. $ Low sales High sales Variable expenses Direct costs rise with output and sales. $ Low direct cost High direct cost

Money available to cover fixed costs $488,027 $534,750 revenue - $46,723 variable expenses

Margin ratio

91%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base break-even has to cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which recycling center expenses are fixed and which move with sales?

Cost classification

Break-even is reliable only when $25,000/month rent stays in overhead and per-unit items like sorting labor, energy, packaging, and buyer transportation move with output. Mix them up, and Month 1 break-even can look stronger than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Lease/Rent	Fixed	Count $25,000/month in monthly overhead before contribution margin.	Tying rent to tons processed.
Base Utilities	Semi-variable	Keep the $8,000/month base charge in overhead and model processing energy by unit.	Treating all power as fixed.
Business Insurance	Fixed	Count $3,500/month as recurring overhead during the planning range.	Scaling insurance with pellet or bale volume.
Shared Facility Utilities	Semi-variable	Separate facility coverage from revenue-linked utility allocations by material stream.	Double-counting it with base utilities.
Raw Material Acquisition	Variable	Apply the per-unit rates by stream, such as $0.010 for rPET and HDPE inputs.	Using one blended percent of revenue.
Direct Sorting Labor	Variable	Move it with units processed, including $0.005 per rPET unit and $3.00 per paper bale.	Modeling it as fixed payroll.
Processing Energy	Variable	Apply unit rates separately from base utilities, such as $0.005 per rPET unit.	Burying usage energy in monthly overhead.
Waste Management Fee	Variable	Model it as revenue-linked throughput expense by stream, including 0.3% for rPET and 0.4% for paper.	Treating disposal needs as flat.

How does break-even shift as the recycling center moves from a lean launch to a fuller operating run?

Scenario table

Lean, base, and full cases all clear break-even, but the cushion grows as output and product mix improve. Fixed costs stay heavy, so better throughput is what makes the model safer.

Planning cases only; actual results will move with feedstock quality, utility use, logistics, and plant uptime.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$3,258K	$377K	$1,139K	88.4%	$1,976K	Above break-even, but the cushion is thinner.
Base operating case	$5,348K	$541K	$1,253K	89.9%	$4,065K	Healthy break-even cushion; fixed cost absorption is better.
Full run case	$7,283K	$636K	$1,253K	91.3%	$6,209K	Strong cushion; the plant has room for demand swings.

What can break this recycling center's break-even cushion?

Stress test

First-year revenue of $3.258M sits about $1.97M above the $1.288M break-even point. The cushion is real, but commodity price drops, contamination, hauling inflation, and downtime can trim it fast, and startup cash still falls to -$3.179M in Month 10.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.29M	$1.97M cushion	Healthy operating cushion, but startup cash still turns negative.
Revenue shortfall	Monthly revenue runs 10% below plan.	$1.29M	$1.64M cushion	Weaker commodity pricing trims the cushion fast.
Fixed-cost pressure	Monthly overhead rises by $10K.	$1.30M	$1.96M cushion	Lease, utilities, and overtime push required sales higher.
Margin pressure	Contribution margin slips by 1 point.	$1.30M	$1.96M cushion	Contamination or buyer pressure lifts break-even revenue.
Combined pressure	Monthly overhead rises by $10K and margin slips by 1 point.	$1.32M	$1.94M cushion	Small cost and margin hits stack fast, but the cushion still holds.

What must you verify before signing the lease and ordering equipment for this recycling center?

Founder checklist

Don’t sign the $25K monthly lease or order major equipment until site rules, inbound supply, buyer pricing, and cash all line up. The model shows $3.91M first-year revenue and $1.976M EBITDA, but cash still bottoms at negative $3.179M in Month 10, so the ramp needs real reserve money.

1Lease gate$25K/mo

Verify zoning, environmental rules, and hauling limits before you commit rent, because the wrong site can block inbound material and stall output.

2Overhead load$52K/mo

Check the monthly overhead before payroll, because rent, utilities, insurance, security, software, legal/accounting, marketing, and R&D start burning cash on day one.

3Capex timing$5.85M

Match the buildout, sorting, washing, pelletizing, baling, shredding, vehicles, lab, IT, and storage schedule to the cash plan, because the capex lands before the line is fully productive.

4Feedstock supply4.505M units

Lock in inbound supply for 4.505M first-year units, because the plant can’t hit its output plan if material intake is thin or inconsistent.

5Buyer pull$3.91M

Confirm buyers will absorb the Year 1 mix at the modeled prices, because $3.91M of revenue only works if roughly 90% is left after variable costs.

6Runway loadMonth 10

Test the 7.5 FTE Year 1 team and $742.5K payroll against the Month 10 cash low of negative $3.179M, because staffing and reserves have to cover the ramp, not just the steady state.