Taekwondo School Break-Even Analysis: 163 Students To Cover Costs

Fixed costs $14.4K/mo Monthly base overhead

Contribution margin 87.5% After variable costs

Break-even revenue $16.4K/mo Revenue to cover costs

Break-even timing Month 1 Launch month

Break-even calculator

Test whether monthly revenue can cover variable expenses and fixed monthly costs for a taekwondo school.

Lean Base Full

Monthly revenue Use total monthly income from memberships and belt testing fees. $ Lower sales Higher sales Variable expenses Include direct costs that rise with sales, like payment fees, marketing, uniforms, and belt testing costs. $ Lower costs Higher costs

Money available to cover fixed costs $55,106 $61,848 revenue - $6,742 variable expenses

Margin ratio

89%

Covers fixed costs

Yes

Fixed monthly costs Include rent, wages, and other overhead that must be covered each month. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which taekwondo school expenses are fixed, and which move with enrollment?

Cost classification

Break-even only works if overhead and margin are separated cleanly. Fixed items set the monthly hurdle, while variable and step costs show what each added student really contributes.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Rent ($4,500/month)	Fixed	Include in monthly overhead before calculating student break-even.	Spreading rent across students as if it rises with each enrollment.
Utilities ($650/month)	Semi-variable	Keep a base amount in overhead and let usage rise with class volume.	Treating the full bill as fixed when longer hours increase usage.
Owner/Head Instructor ($5,833/month)	Fixed	Include as recurring payroll overhead in the planning range.	Leaving owner pay out, which overstates true break-even profit.
Lead Instructor ($4,583/month)	Semi-fixed	Add in staffing steps as class load and capacity increase.	Modeling instructor payroll as one-for-one with each new student.
Assistant Instructor ($2,500/month)	Semi-fixed	Increase in blocks when enrollment needs more class coverage.	Adding fractional labor too smoothly instead of using staffing steps.
Uniforms & Gear for Resale (3.0% of revenue in first year)	Variable	Deduct from sales to show resale gross margin.	Netting retail gear revenue and resale expense without showing margin.
Belt & Certification Costs (2.0% of revenue in first year)	Variable	Match against belt-related activity as a direct expense.	Mixing belt testing fees, which are revenue, with certification expenses.
Payment Processing Fees (2.5% of revenue in first year)	Variable	Deduct from each paid membership or fee transaction.	Ignoring card fees and overstating contribution per student.

How does break-even shift from a lean launch to base and full enrollment at a taekwondo school?

Scenario table

Higher occupancy and more students push revenue up faster than rent and payroll, so break-even moves from a thin lean gap to a stronger full-capacity cushion. The base case is the practical midpoint to watch.

Planning assumptions only; actual results will move with enrollment, staffing, and fee collection.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case (Year 1)	$25,190	$3,149	$22,092	87.5%	-$51	Nearly break-even; revenue is about $60 short.
Base neighborhood case (Year 2)	$37,048	$4,298	$23,342	88.4%	$9,408	Comfortable cushion; revenue is about $10.6k above break-even.
Full-capacity case (Year 5)	$77,365	$8,123	$27,258	89.5%	$41,984	Strong cushion; revenue is about $46.9k above break-even.

What breaks a taekwondo school’s break-even plan?

Stress test

Year 1 is only a hair from break-even, so small misses matter. Revenue drops, rent jumps, or higher staffing and discounts can quickly turn the thin cushion into a real loss.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	Base Year 1 case: $25,190 revenue, 125% variable expense rate, and $22,092 fixed overhead.	$25,248	$58 gap	Only a $58 gap, so active students must stay above 163.
Revenue shortfall	Revenue falls 10% to $22,671 while costs stay the same.	$25,248	$2,577 gap	Weak trial-to-member conversion can open a fast shortfall.
Fixed-cost pressure	Fixed overhead rises 10% to $24,301.	$27,773	$2,583 gap	Rent increase or instructor overtime widens the gap fast.
Margin pressure	Variable expenses rise to 150% of revenue.	$25,990	$800 gap	Family discount creep can wipe out most of the cushion.
Combined pressure	Revenue falls 10%, variable expenses rise to 150%, and fixed overhead rises 10%.	$28,590	$5,919 gap	Churn after belt testing can turn a weak month into a clear loss.

What should you verify before you sign the lease for a Taekwondo School?

Founder checklist

Before you sign the lease or spend launch cash, make sure demand, pricing, and staffing can cover the first-year cost base. The model only works if early classes fill fast and Month 1 bills get paid without waiting on late signups.

1Demand Pipeline163 students

Confirm at least 163 active students or a signed pipeline equivalent before you commit, because that is the first-year cost-base test for break-even.

2Price Test$135/$145/$155

Verify parents and adults will accept $135, $145, and $155 a month, because pricing has to support the cost base, not just match nearby schools.

3Site Fit60% occupancy

Make sure the space can handle 60% occupancy at launch with parking, visibility, and safe drop-off, or early classes will feel cramped and hurt retention.

4Fixed Load$22.1K/mo

Confirm Year 1 wages of about $16,042 a month plus $6,050 in overhead, because the school owes that cash before student growth helps.

5Margin Check87.5% CM

Check that gear, belts, processing, and marketing keep Year 1 variable drag near 12.5%, so each $1,000 in tuition keeps about $875 to cover fixed costs.

6Launch Cash$940K

Fund the Month 1 cash need of $940K and set waivers, recurring billing, attendance tracking, belt-testing tracking, and payment processing before opening, so late signups do not have to cover bills.