Small Cargo Van Delivery Break-Even: About $286K/Month

Fixed costs $24.3K/mo Year 1 run-rate

Contribution margin 85% After variable costs

Break-even revenue $28.6K/mo Monthly target

Break-even timing Month 1 Launch month

Break-even calculator

Test how monthly revenue, variable expenses, and fixed monthly costs shape break-even for a small cargo van delivery service.

Lean Base Full

Monthly revenue More monthly sales leaves more room to cover fixed overhead. $ Low load High load Variable expenses These are the direct costs that rise with each delivery and sale. $ Low cost High cost

Money available to cover fixed costs $82,146 $95,408 revenue - $13,262 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead break-even has to cover first. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which delivery expenses are fixed, and which move with sales?

Cost classification

This model shows break-even in Month 1, so classification matters: a small error can make early profit look safer than it is. In the first year, driver, fuel, processing, and marketing charges total 15% of revenue, not fixed overhead.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $1,500 per month as base overhead before any deliveries.	Modeling it per delivery hides the Month 1 break-even load.
Vehicle Fleet Insurance	Fixed	Use $2,000 per month within the current fleet plan.	Lowering it when volume dips understates required monthly cash.
Software Licenses GPS Dispatch	Fixed	Use $500 per month to keep routing and dispatch live.	Treating core dispatch software as optional after launch.
Driver Contractor Fees	Variable	Apply 6.0% of first-year delivery revenue; lower rates are modeled later.	Treating driver pay as fixed while orders scale.
Fuel Costs per Delivery	Variable	Apply 4.0% of first-year delivery revenue and update with route density.	Treating fuel, tolls, and parking as fixed.
Payment Processing Fees	Variable	Apply 2.0% of first-year revenue collected through cards or online payments.	Forgetting fees on express and subscription deliveries.
Utilities & Internet	Semi-variable	Start with $300 per month, then flex for depot usage and network load.	Putting the whole bill in fixed overhead forever.
Customer Support Lead Staffing	Semi-fixed	Model 0.5 FTE in the first year, then step up toward 1.0 FTE by Year 3.	Spreading the added headcount evenly per delivery.

How does break-even shift across lean, base, and full delivery setups?

Scenario table

Lean breaks even faster because fixed payroll and overhead stay lower. As volume climbs, the margin edge improves, but the real cushion comes from spreading fixed cost across denser routes.

Planning assumptions only; actual results will move with route density, fuel, staffing, and customer mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean route plan	$36.4k	$5.5k	$24.3k	85.0%	$6.6k	Month 1 break-even signal, but the cushion is thin.
Base route plan	$95.4k	$13.3k	$31.1k	86.1%	$51.1k	Break-even stays covered if routes stay full and steady.
Full route plan	$183.3k	$23.5k	$39.8k	87.2%	$120.1k	Best cushion, as long as higher use comes from denser routes.

What breaks the break-even plan for this delivery service?

Stress test

The base plan sits above break-even with a $78K cushion, but a 20% revenue drop almost wipes it out. Fuel spikes, contractor fees, higher insurance, and slow-paying accounts are the main ways this model slips.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change to revenue, margin, or fixed costs.	$286K	$78K cushion	Base case clears break-even, but the cushion is not wide.
Revenue shortfall	Monthly revenue falls 20%.	$286K	$5K cushion	Low route density or softer demand nearly removes the buffer.
Fixed-cost increase	Fixed costs rise 10%.	$314K	$50K cushion	Higher insurance or staffing cost cuts into room fast.
Margin pressure	Variable expenses rise from 15% to 20%.	$304K	$60K cushion	Fuel spikes or contractor fees squeeze margin, but the plan still holds.
Combined pressure	Revenue falls 20%, variable expenses rise to 20%, and fixed costs rise 10%.	$334K	$43K gap	This turns the plan into about a $34K monthly operating loss.

What should the founder verify before the first van lease and the first hires?

Founder checklist

Test the route book, pricing, and cash runway against break-even before you commit. This model carries about $24.3K in fixed cost each month and still hits a $843K cash trough in Month 2, so demand and collections need to show up early.

1Route Commitments13,000 stops

Verify prebooked work or signed route commitments can cover the Year 1 forecast before you spend on vans.

2Year 1 Rates$30 / $55 / $25

Check that standard, express, and subscription jobs can actually clear these average charges in the first operating year.

3Fixed Load$24.3K/mo

Make sure the business can carry the monthly fixed cost, including payroll, before you add more staff or vehicles.

4Zip DensityZip map

Map the service area by zip code so stops cluster tightly and route miles do not eat the delivery margin.

5CoverageCoverage set

Confirm insurance is active before you accept jobs, and keep backup vehicle access ready for downtime.

6Cash Cushion$843K

Keep reserve above the model’s minimum cash because Month 2 is the trough, and slow collections can push the dip deeper; delay full hiring if volume stays below break-even.