Test whether monthly revenue covers variable costs first, then the fixed monthly base.
Money available to cover fixed costs$1,555,720
$1,913,083 revenue - $357,363 variable expenses
Margin ratio
81%
Covers fixed costs
Yes
Break-even chart Revenue Total costs
Which running track installation expenses are fixed, and which move with sales?
Cost classification
Break-even is only reliable when monthly overhead stays separate from job-level spend. Here, the model reaches break-even in Month 1, but that depends on treating materials, crew labor, bonding, and freight as volume-linked.
Expense
Cost
Break-Even Treatment
Common Mistake
Warehouse and Office Lease
Fixed
Carry $12,500 per month from Month 1 through Month 60 as fixed overhead before job margin.
Allocating it only to active projects, which hides idle-month burn.
Software and Design Tools
Fixed
Carry $1,200 per month as a stable operating expense across the planning range.
Tying the full subscription bill to striping volume.
Recycled Rubber Granules
Variable
Charge $42,000 per full track installation as direct material in per-job margin.
Treating bulk material buys like fixed overhead.
Installation Crew Wages
Variable
Charge $12,000 per full track installation because the spend rises with completed installs.
Treating project labor like salaried office staff.
Logistics and Freight
Variable
Charge $3,000 per full install and test margin by project location.
Leaving freight in overhead, which overstates job contribution.
Equipment Fuel and Lubricants
Semi-variable
Model the usage-linked amount at 1.0% of revenue, with sensitivity for travel and equipment hours.
Treating fuel as fixed when job mix drives usage.
Project Performance Bonding
Semi-variable
Apply 1.5% of revenue in the first year, dropping to 1.0% in the mature year.
Ignoring bonding on bids, which overstates contribution.
Project Manager and Lead Estimator Staffing
Semi-fixed
Add capacity in hiring steps: project managers move from 2.0 to 5.0 FTE; estimators move from 1.0 to 2.0 FTE.
Scaling salaries smoothly with revenue instead of step changes.
How does break-even shift from a lean month to a full project month for a running track installer?
Scenario table
More project volume pushes revenue up faster than the fixed overhead stack, so break-even moves from tight in the lean month to well covered in the base and full months. Still, school awards are lumpy, so annual averages can hide dry spells.
Planning case only: award timing, weather, and site access can move actual break-even.
Scenario
Monthly Revenue
Variable Costs
Fixed Costs
CM Ratio
Operating Profit
Break-Even Signal
Lean launch month
$82K
$20K
$62K
75.6%
$0
Near break-even; one delayed award can flip the month red.
Base Year 1 plan
$842K
$226K
$62K
73.2%
$555K
Healthy cushion for first-year overhead coverage.
Full Year 2 load
$1.298M
$373K
$62K
71.2%
$863K
Strong cushion; watch for lumpy school-award timing.
What breaks the break-even plan for a running track installation service?
Stress test
The plan clears break-even in Month 1, but the cushion depends on school awards landing on time and keeping freight, overtime, and waste near plan. A $100,000 revenue slip, a $10,000 monthly overhead bump, or a 5-point margin drop tightens the buffer fast.
Stress Case
Changed Assumption
Break-Even Revenue
Revenue Gap
Risk Signal
Current plan
No change to the Year 1 forecast.
$978,000
$9,122,000 cushion
Month 1 stays above break-even.
Revenue shortfall
Year 1 revenue is $100,000 lower.
$978,000
$9,022,000 cushion
School award delays eat cushion fast.
Fixed-cost pressure
Fixed overhead rises by $10,000 per month.
$1,110,000
$8,990,000 cushion
Lease, insurance, and RFP spend push break-even up.
Margin pressure
Contribution margin drops 5 points to 706%.
$1,047,000
$9,053,000 cushion
Freight, overtime, and waste push the line up.
Combined pressure
Revenue is $100,000 lower, overhead is $10,000 per month higher, and margin falls to 706%.
$1,218,000
$8,782,000 cushion
Still above break-even, but the buffer narrows hard.
What should you verify before committing to the yard, fleet, and hiring plan?
Founder checklist
Don't commit to the yard, fleet, and hiring plan until you have late-stage jobs close to the Year 1 mix, supplier quotes in hand, and the $1.026M Month 1 cash floor covered. On this model, the business only looks break-even-ready if pipeline, margins, and mobilization timing all line up.
1Pipeline$10.1M Y1
Confirm signed or late-stage work can support the Year 1 revenue plan before you add overhead.
2Base overhead$73.9K/mo
Check that the Year 1 salary load plus fixed expense base is covered, because it starts in Month 1.
3Full-install CM74.7% CM
Verify a full install still leaves enough contribution after listed materials, labor, and sales costs to carry the overhead base.
4Crew ramp6 core FTE
Make sure the opening team can handle the Year 1 job mix without pushing mobilization past the launch month.
5Cash floor$1.026M
Hold the Month 1 cash floor before ordering the $685K capex set, or the buildout can outrun working capital.
6Launch packBid-ready
Lock quotes for the seven core materials and have insurance, bonding, safety, and school RFP packets ready before you spend on space or equipment.
