Sporting Goods Store Break-Even: About $246K Monthly Sales

Fixed costs $20.6K/mo Base overhead

Contribution margin 84% After variable costs

Break-even revenue $24.5K/mo Revenue target

Break-even timing Month 17 Model crossover

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed costs against break-even for a sporting goods store.

Lean Base Full

Monthly revenue Revenue sets the pool that covers direct costs and fixed overhead. $ Low sales High sales Variable expenses These rise with sales, like inventory, payment fees, and selling costs. $ Low costs High costs

Money available to cover fixed costs $34,255 $40,780 revenue - $6,525 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the store must cover before profit. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which sporting goods store expenses stay fixed, and which move with sales?

Cost classification

Break-even works only when fixed overhead, sales-linked costs, and step costs are separated. Inventory bought before opening is cash risk, not break-even margin by itself.

Expense	Cost	Break-Even Treatment	Common Mistake
Store Rent	Fixed	Use $5,000 per month in fixed overhead from Month 1 through Month 60.	Treating rent as a percent of sales and understating the sales needed to cover the lease.
Local Advertising Retainer	Fixed	Use $1,000 per month as committed overhead, separate from sales commissions.	Blending fixed ads with commission spend, which hides the true monthly cash floor.
Wholesale Inventory Cost	Variable	Apply 10.0% of sales in the first year, stepping down to 8.0% by the fifth year.	Confusing the $40,000 Initial Inventory Stock with monthly margin pressure.
Team Customization Materials	Variable	Apply 2.0% of sales in the first year, tied to customized jersey and team orders.	Putting materials into fixed overhead even though they rise with customized sales.
Marketing & Sales Commissions	Variable	Apply 3.0% of sales in the first year, falling to 2.5% by the fifth year.	Counting commissions as fixed payroll and overstating contribution margin.
Payment Processing Fees	Variable	Apply 1.0% of sales in the first year, then model the lower rates shown in later years.	Ignoring card fees because each swipe feels small; they scale with every sale.
Utilities	Semi-variable	Start with the $800 monthly base, then review usage if traffic rises materially.	Leaving utilities flat while store hours, visitors, and equipment use increase.
Payroll Levels by FTE	Semi-fixed	Model wages by full-time equivalent staffing levels; payroll jumps when new FTE capacity is added.	Scaling payroll smoothly with revenue instead of adding staff in real hiring steps.

How does break-even change from a lean launch store to a full-format sporting goods store?

Scenario table

Break-even improves as traffic, conversion, and basket size rise, but fixed labor and store costs rise too. Lean is the location-risk check, base is the staffing sweet spot, and full depends on stronger repeat demand and service sales.

These are planning assumptions, not guarantees; actual results can shift with traffic, product mix, wages, and inventory turnover.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$41.3k	$6.6k	$17.3k	84.0%	$17.4k	Clear cushion, but this is the location-risk test.
Base growth case	$103.6k	$14.8k	$22.6k	85.7%	$66.2k	Best balance for scale, with room to support added staff.
Full scale case	$225.5k	$28.9k	$23.3k	87.2%	$173.3k	Largest cushion, but it needs stronger repeat demand and service sales.

What breaks the break-even plan for this store?

Stress test

Year 1 has room, but the cushion can shrink fast. The plan clears break-even by about $208k, yet a small sales miss, higher payroll, or slower margin improvement can pull the store close to the line before Year 3.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$246k	$208k cushion	The first-year buffer is solid.
Revenue shortfall	Conversion slips from 8.0% to 7.0%.	$246k	$151k cushion	A 1-point conversion miss cuts about $57k of cushion.
Fixed-cost increase	Annual overhead rises from $207k to $271k.	$317k	$137k cushion	Adding payroll before traffic pushes break-even up fast.
Margin pressure	Variable expenses stay at 16.0% instead of easing to 12.8%.	$323k	$131k cushion	Discounting or weak mix keeps the margin bar higher.
Combined pressure	Conversion slips to 7.0%, overhead rises to $271k, and variable expenses stay at 16.0%.	$323k	$74k cushion	Traffic, staffing, and margin pressure leave a thin buffer.

What should you verify before you sign the lease and fund opening inventory?

Founder checklist

Only sign the lease if Year 1 sales can clear the $246k monthly break-even run-rate and the cash plan still survives rent, inventory, and launch spend. Don’t let a nice storefront outrun the cash plan.

1Sales proof$246k/mo

Verify traffic and conversion can support this run-rate, with mix near 35% running shoes, 20% jerseys, 25% fitness apparel, 10% rackets, and 10% gait analysis service, because the Year 1 cost stack only works if the mix holds.

2Fixed load$7.8k/mo

Check that $5,000 rent plus $7,750 of other monthly overhead still fits the foot-traffic forecast, because this is the fixed cash floor before sales start paying back the lease.

3Opening stock$40k

Fund the initial inventory order without squeezing operating cash, because empty shelves hurt early sales and make the opening month look better than the store really is.

4Launch spend$160k

Stage the build-out, fixtures, POS hardware, service equipment, security, signage, and furniture so the opening cash burn stays controlled before the store starts trading.

5Payroll plan$155k/yr

Keep Year 1 staffing at the $155,000 wage base, or 4.0 FTE, until traffic and conversion justify more help, because labor should follow sales, not lead them.

6Cash cushion$593k, Month 21

Hold enough runway to survive the $593,000 cash trough in Month 21, or the lease and launch spend are too heavy for the current plan.