Small-Scale Cheese Making Break-Even: $179K Monthly Sales

Fixed costs $5.5K/mo Monthly overhead

Contribution margin 81% After variable costs

Break-even revenue ≈$6.7K/mo Monthly target

Break-even timing Month 2 Model breakeven

Break-even calculator

Test whether monthly cheese sales cover direct costs and fixed overhead, and see how each scenario sits versus break-even.

Lean Base Full

Monthly revenue Monthly sales drive the margin available to cover fixed overhead. $ Low sales High sales Variable expenses Direct costs like milk, cultures, packaging, and labor rise with output. $ Low direct cost High direct cost

Money available to cover fixed costs $22,250 $27,288 revenue - $5,038 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead base contribution margin must cover. $ Lean overhead Higher overhead

Break-even chart Revenue Total costs

Which cheese making expenses are fixed, and which move with sales?

Cost classification

Break-even only works if each expense behaves the way the model says it does. Misclassify milk, packaging, or utilities, and the Month 2 break-even point can look cleaner than cash flow will feel.

Expense	Cost	Break-Even Treatment	Common Mistake
Milk, cultures, rennet, salt, herbs, and smoking chips	Variable	Increase with units produced and sold across the cheese mix.	Using one flat monthly amount instead of batch volume.
Packaging, containers, lids, labels, and foil wrap	Variable	Apply per sellable unit because each finished cheese needs packaging.	Forgetting packaging when pricing farmers market sales.
Direct labor per unit	Variable	Include per-unit labor in contribution margin before fixed overhead.	Counting all labor below break-even as fixed payroll.
Creamery Facility Rent	Fixed	Carry $3,000 per month regardless of monthly production volume.	Spreading rent per unit and hiding slow-month risk.
Insurance, website and POS, accounting, market fees, and renewals	Fixed	Model $1,700 per month as recurring overhead in the planning range.	Dropping small monthly fees from the break-even base.
Utilities and maturation utilities	Semi-variable	Use the $750 monthly utility base plus usage tied to maturation activity.	Treating all utilities as fixed when aging load rises.
Aging room capacity and storage load	Semi-fixed	Add in blocks when cooler, shelving, or storage capacity is exceeded.	Modeling capacity as a smooth per-unit charge.
Spoilage and yield loss	Variable	Reduce sellable units or raise variable expense before break-even math.	Letting lost yield disappear from the model.

How does break-even change from lean to full cheese production?

Scenario table

Lean output still runs a monthly gap, base scale lifts revenue but not enough to cover fixed payroll, and full output finally clears break-even with room to spare. More labor helps sales, but it also raises the sales bar.

Planning assumptions only; actual results can move with milk prices, yield, labor, and sales mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean creamery case	$154K/mo	$30K/mo	$144K/mo	80.5%	-$20K/mo	About a $25K monthly revenue gap remains.
Base production case	$273K/mo	$50K/mo	$254K/mo	81.5%	-$31K/mo	Needs about $38K more monthly revenue to break even.
Full production case	$447K/mo	$78K/mo	$312K/mo	82.6%	$57K/mo	Generates about a $69K monthly cushion above break-even.

What breaks this creamery’s break-even plan first?

Stress test

The base plan is already tight: about $154K monthly revenue versus about $144K fixed costs and $30K variable costs, leaving roughly a $20K operating loss before timing effects. A 10% sales dip or a 10% cost bump pushes break-even farther away.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$179,000/month	$25,000 gap	The plan is below break-even as written.
Revenue shortfall	Monthly revenue falls 10% to about $138,600.	$179,000/month	$40,000 gap	A small sales miss turns into a much wider loss.
Fixed-cost pressure	Fixed costs rise 10% to about $158,400.	$197,000/month	$43,000 gap	Rent, payroll, or utility creep lifts break-even fast.
Margin pressure	Variable expense rises 10% to about $33,000.	$183,000/month	$29,000 gap	Milk and packaging inflation squeeze contribution margin.
Combined pressure	Revenue falls 10%, variable expense rises 10%, and fixed cost rises 10%.	$208,000/month	$69,000 gap	Slow sell-through and cost creep hit at the same time.

What should the founder verify before signing the creamery lease?

Founder checklist

Break-even lands in Month 2, so you need proof before the lease and equipment commit. Verify 9,800 Year 1 units, the $14.4K monthly fixed load, and cow and goat milk supply before batch planning.

1Year 1 sales9,800 units

Confirm buyers for 9,800 units across Creamy Brie, Aged Farmhouse Cheddar, Herbed Goat Chevre, Smoked Gouda, and Blue Vein Gorgonzola before you sign the lease, because that is the Year 1 volume the model needs.

2Fixed load$14.4K/mo

Add rent, insurance, utilities, software, accounting, market fees, food-safety renewals, and Year 1 wages for the owner and sales staff. If this monthly load is not covered, break-even slips fast.

3Margin check80.5% CM

Here’s the quick math: Year 1 revenue is $184.6K and unit COGS is $36.0K, leaving $148.6K before fixed overhead. That contribution margin only works if milk, packaging, and labor stay on plan.

4Labor ramp2.0 FTE

Year 1 runs on 1.0 FTE for the owner and 1.0 FTE for sales, then adds the assistant in Month 13. Make sure cold storage and batch flow can handle the ramp without a bottleneck.

5Cash cushion$1.197M

Hold the Month 1 cash peak, because the model’s minimum cash lands there at $1.197M. Without that cushion, equipment, inventory, and payroll can crowd each other out.

6Launch ordersWholesale + DTC

Do not commit to the lease until wholesale and direct-to-consumer orders are visible, and secure cow and goat milk supply before batch planning. That keeps the first batches from running into a supply or sell-through gap.