Seed Supply Break-Even Analysis: $119K Monthly Revenue Target

Fixed costs $15.8K Fixed base

Contribution margin 83.5% After variable costs

Break-even revenue $18.9K Monthly target

Break-even timing Month 23 Model break-even

Break-even calculator

Use this to test whether monthly seed sales cover direct costs and overhead.

Lean Base Full

Monthly revenue This is the sales you need before fixed costs can be covered. $ Slow month Strong month Variable expenses Include seed purchase, packaging, shipping, and card fees that rise with sales. $ Low direct High direct

Money available to cover fixed costs $172,800 $200,000 revenue - $27,200 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs Include rent, wages, software, and other overhead that stays on. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed, variable, or step up with sales in a seed business?

Cost classification

Break-even only works if sales-linked costs reduce contribution margin and stable monthly costs sit below the line. Misclassify seed, shipping, payroll, or marketing, and Month 23 break-even can look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Bulk Seed Purchase Cost	Variable	Reduce contribution margin by 7.0% of first-year revenue, falling to 5.0% by the mature year.	Treating inventory purchases as fixed overhead instead of sales-linked product cost.
Packaging Materials	Variable	Reduce contribution margin by 2.0% of first-year revenue, falling to 1.2% by the mature year.	Ignoring packaging because each packet feels small.
Fulfillment & Shipping Fees	Variable	Reduce contribution margin by 5.0% of first-year revenue, falling to 3.0% by the mature year.	Putting shipping in fixed overhead and overstating margin at higher order volume.
Payment Processing Fees	Variable	Reduce contribution margin by 2.5% of first-year revenue, falling to 1.5% by the mature year.	Leaving card fees out of break-even math.
Website Hosting & Software	Fixed	Include $2,500 per month in fixed operating costs from Month 1 through Month 60.	Spreading it across orders and making low-volume months look too profitable.
Warehouse Lease	Fixed	Include $4,000 per month in fixed operating costs across the planning range.	Treating warehouse rent as variable because it supports fulfillment.
Payroll	Semi-fixed	Model base headcount as fixed by year, then step it up when support and fulfillment full-time equivalents increase.	Using one flat monthly payroll number even when staffing changes by year.
Marketing Budget	Semi-fixed	Model planned annual spend as a step-up budget: $500,000 in the first year to $1,800,000 in the mature year.	Treating marketing as a pure variable CAC expense and missing committed spend.

How does break-even change across lean, base, and full-scale seed supply scenarios?

Scenario table

Break-even moves up fast as fixed costs rise, but the mature-year mix also lifts margin. So the real test is whether sales can outrun the overhead ramp.

Planning assumptions only; actual break-even will move with seed mix, order size, and cost control.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$688K	$114K	$575K	83.5%	$0	Small misses push it back below break-even.
Base case	$1.19M	$196K	$991K	83.5%	$0	This is the main break-even hurdle.
Full-scale mature year	$2.50M	$267K	$2.23M	89.3%	$0	Better mix helps, but overhead is much larger.

What breaks Seed Supply’s break-even plan?

Stress test

Seed Supply is tight at break-even: about $1.187M in annual sales covers the plan, but a 1-point margin drop or a $10K cost bump moves the line up fast. Cash is the real watchout, with minimum cash at negative $361K in Month 23.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.187M	$0 gap	Right at break-even.
Revenue shortfall	Annual sales fall $10K below plan.	$1.187M	$10K gap	A small sales miss cuts the cushion fast.
Fixed-cost increase	Fixed overhead rises $10K a year.	$1.199M	$12K gap	Extra overhead pushes break-even sales higher.
Margin pressure	Contribution margin drops by 1 point.	$1.202M	$15K gap	Shipping pressure or markdowns move break-even up.
Combined pressure	Sales fall $10K, fixed costs rise $10K, and margin drops 1 point.	$1.214M	$27K gap	Small misses stack and can trigger the Month 23 cash low.

Can the seed supply launch cover its fixed costs before you lock in the warehouse lease, inventory, and hires?

Founder checklist

Test the first-year order mix against the lease, payroll, and inventory plan before you commit. Break-even lands in Month 23, but the business still needs to survive a $361K cash trough, so demand, margin, and hiring must hold up early.

1Demand proofMonth 23

Validate demand before the $75K initial seed inventory buy by confirming the first-year order value is about $18.90 and the mix can move enough volume.

2Lease load$57.5K/mo

Add the $15.8K of monthly overhead to the $500K Year 1 salary plan and the business carries about $57.5K a month before marketing, so the $4K warehouse lease only works if storage and picking can keep up.

3Margin test83.5% CM

Year 1 contribution margin is about 83.5% after seed cost, packaging, shipping, and card fees, so each order has to fund the rest of the fixed stack.

4Hiring rampMonth 13

Delay the first fulfillment hire until order volume can support the $40K annual salary, because the model keeps fulfillment staff at zero in the first 12 months.

5Cash cushion-$361K

Keep enough cash to absorb the Month 23 minimum cash point of negative $361K, because the model does not self-fund before then.

6CAC watch$25

Track Year 1 CAC at $25 before committing to the $500K marketing budget, because paid growth only works if acquisition stays below the margin it creates.