Recycling Plant Break-Even Analysis: $159K Monthly Revenue

Fixed costs $128K/mo Monthly base cost

Contribution margin 80.5% After variable costs

Break-even revenue $159K/mo Revenue at zero profit

Break-even timing Month 1 Launch month

Break-even calculator

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

Lean Base Full

Monthly revenue Revenue is the cash coming in before direct plant costs and overhead. $ Slow ramp Peak output Variable expenses These move with output, like feedstock, processing, logistics, and sales costs. $ Lower mix Higher mix

Money available to cover fixed costs $3,191,750 $3,833,333 revenue - $641,583 variable expenses

Margin ratio

83%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your contribution margin has to cover. $ Lean crew Larger crew

Break-even chart Revenue Total costs

Which recycling plant expenses stay fixed, and which move with sales volume?

Cost classification

Break-even gets unreliable when fixed overhead is mixed with unit-driven processing costs. Keep rent, insurance, and base tools separate from materials, logistics, commissions, and step-up labor.

Expense	Cost	Break-Even Treatment	Common Mistake
Plant & Office Rent	Fixed	Use $25,000 per month in fixed overhead for the planning range.	Spreading rent per unit and making break-even look too easy at higher volume.
Insurance Premiums	Fixed	Use $4,000 per month as fixed overhead from Month 1 through Month 60.	Dropping insurance below the line instead of including it in operating break-even.
Software Subscriptions	Fixed	Use $1,500 per month as fixed overhead, since the model does not tie it to units or revenue.	Treating software as a percentage of sales without support from the model.
Utilities	Semi-variable	Split the $6,000 monthly fixed portion from direct utilities such as $0.008 per rPET pellet unit and $25 per aluminum ingot.	Treating all utilities as fixed and hiding the usage charge from contribution margin.
Raw Material Acquisition	Variable	Charge materials per unit, such as raw PET at $0.070 per unit, raw aluminum at $220 per ingot, and raw OCC at $18 per bale.	Blending feedstock into overhead, which overstates margin when volume rises.
Inbound Logistics	Variable	Model inbound handling per unit, such as $0.008 for rPET pellets, $18 for aluminum ingots, and $3 for baled cardboard.	Hiding inbound logistics in overhead instead of matching it to processed volume.
Outbound Logistics and Sales Commissions	Variable	Apply Year 1 rates to revenue: 2.5% for outbound logistics and 1.5% for sales commissions.	Using gross revenue in break-even without subtracting selling and shipping friction.
Supervisors, Maintenance Technicians, and General Laborers	Semi-fixed	Treat staffing as step-ups: supervisors rise from 2.0 to 4.0 FTE, technicians from 2.0 to 4.0 FTE, and laborers from 10.0 to 20.0 FTE across the model.	Holding payroll flat even when throughput and maintenance needs rise.

How does break-even shift from lean launch to base and full capacity?

Scenario table

Lean is the tightest case, base is the cleanest operating target, and full capacity gives the widest cushion. As output rises, rent and payroll get spread over more sales, so break-even gets easier.

Planning assumptions only; actual plant results will move with feedstock quality, pricing, and uptime.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$2.46M	$382K	$128K	84.5%	$22.09M	Launch discipline matters most; the early cushion is thin.
Base steady-state case	$3.83M	$576K	$156K	85.0%	$35.33M	This is the clean operating target and the best staffing baseline.
Full-capacity case	$5.33M	$771K	$185K	85.5%	$50.13M	Full scale gives the widest cushion and the strongest fixed-cost absorption.

What breaks the recycling plant's break-even plan?

Stress test

Here’s the quick math: the base plan has a wide cushion, but a 20% revenue drop, a 15% fixed-cost rise, or a margin slip from 80.5% to 70.0% pushes break-even up fast. Rejected loads and buyer price cuts are the early warning signs.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change. Revenue holds near $246M a month with 80.5% contribution margin and $128K fixed costs.	$159K	$245.8M cushion	Very wide cushion, but uptime still matters.
Revenue shortfall	Revenue falls 20% to about $197M a month, with the same 80.5% margin.	$159K	$196.6M cushion	A sales drop still clears break-even, but the cushion shrinks.
Fixed-cost pressure	Fixed costs rise 15% to about $147K a month.	$183K	$245.8M cushion	Higher overhead narrows the safety margin.
Margin pressure	Contribution margin falls to 70.0% from contamination, utility spikes, freight pressure, or overtime.	$183K	$245.8M cushion	Contamination and freight pressure hit the spread first.
Combined pressure	Fixed costs rise 15% and contribution margin falls to 70.0%.	$210K	$245.8M cushion	Rejected loads and buyer price cuts can move break-even fast.

Can this plant clear break-even before you lock the site and equipment?

Founder checklist

Don’t sign the site or buy the line until the plant can clear Year 1 volume, hold the $128K monthly fixed load, and survive the Month 10 cash dip. If one of those breaks, break-even is not real yet.

1Launch demandYr 1 $29.55M

Confirm buyer interest can absorb the modeled first-year output before you commit, because the revenue plan only works if every product line moves from launch.

2Supply lock5 streams

Confirm suppliers can cover the five feedstock streams—rPET, aluminum, cardboard, HDPE, and mixed paper—at launch volume, or the line will sit underloaded.

3Fixed load$128K/mo

Make sure the site can carry about $128K a month of fixed rent, insurance, utilities, software, fees, security, lab supplies, and core payroll before output ramps.

4Margin test82% CM

Recheck product mix at Year 1 prices and costs; contribution margin (cash left after variable costs) sits near 82% after the 4% outbound and sales commission load, so pricing slippage bites fast.

5Staffing ramp18 FTE

Verify the opening crew of 1 plant manager, 2 operations supervisors, 1 sales manager, 1 quality control lead, 1 admin, 2 maintenance technicians, and 10 laborers can keep uptime high.

6Cash trough-$5.873M

Plan for the Month 10 cash trough of negative $5.873M and the $21.8M capex stack, because land, construction, and machinery spend hit before the plant stabilizes.