Therapist Break-Even: $426k Monthly Revenue And 269 Sessions

Fixed costs $40.3K/mo Recurring base

Contribution margin 94.5% After variable

Break-even revenue $42.6K/mo Monthly target

Break-even timing Month 2 Launch ramp

Break-even calculator

Test monthly revenue against variable expenses and fixed costs for a therapist practice.

Lean Base Full

Monthly revenue Revenue sets the margin that pays fixed costs. $ Low revenue High revenue Variable expenses Direct costs like fees and referral bonuses rise with sessions. $ Low direct costs High direct costs

Money available to cover fixed costs $256,405 $269,050 revenue - $12,645 variable expenses

Margin ratio

95%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your margin must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which therapist practice expenses are fixed, variable, semi-variable, or semi-fixed at break-even?

Cost classification

Break-even is reliable only if recurring overhead, payroll, and revenue-linked fees are separated cleanly. Treat one-time setup spend outside monthly overhead, or Month 2 break-even can look weaker than the operating model really is.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Include $3,500 per month as recurring overhead from Month 1 through Month 60.	Mixing it with Office Furniture & Decor at $20,000 and treating both as monthly overhead.
Professional Liability Insurance	Fixed	Include $700 per month because it does not move with session volume in the planning range.	Leaving it out because it is not tied to a specific therapy session.
EHR Software License	Fixed	Include $400 per month as recurring practice software overhead.	Combining the $400 monthly license with the $1,500 initial setup fee.
Telehealth Platform Fees	Variable	Apply 1.5% of revenue in the first year, then use the lower forecast rates by year.	Modeling it as a flat monthly bill instead of a revenue-linked fee.
Payment Processing Fees	Variable	Apply 1.0% of revenue in the first year because the fee rises with collected sales.	Forgetting it when calculating contribution margin, which overstates break-even profit per session.
Client Referral Bonuses	Variable	Apply 2.0% of revenue in the first year as a sales-linked client acquisition expense.	Treating referrals as fixed marketing even though the model ties them to revenue.
Utilities & Internet	Semi-variable	Start with the $500 monthly amount, and review it as office use and telehealth activity scale.	Assuming it stays perfectly flat while clinician count and session volume grow.
Administrative Assistant salary	Semi-fixed	Include $45,000 annual salary as payroll; step it up only when added capacity requires more support.	Treating the full next staffing step as variable per session instead of a capacity-driven jump.

How does break-even change from a lean launch to a full therapist practice?

Scenario table

Lean launch clears fixed costs, but the cushion is thin if cancellations rise. By Year 3 and Year 5, more sessions spread overhead better, so break-even risk drops and the profit buffer gets wider.

Planning figures only; actual results will move with mix, utilization, and cancellations.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean office launch	$51,065	$2,809	$40,250	94.5%	$8,006	Clears fixed costs, but the cushion is thin.
Base scaled group practice	$198,358	$9,323	$88,583	95.3%	$100,452	Strong break-even cushion for a growing group model.
Full mature multi-clinician practice	$390,115	$15,995	$141,917	95.9%	$232,203	Very wide cushion once the practice is fully staffed.

What breaks the break-even plan for this therapist practice?

Stress test

Year 1 revenue is $51,065 against $42,593 break-even, so the cushion is only $8,472. That buffer disappears fast if sessions slip or telehealth, referral, or payroll costs rise.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$42,593	$8,472 cushion	Base plan clears break-even, but the buffer is modest.
Revenue shortfall	Cut modeled sessions by 533, from 3,215 to 2,682.	$42,593	$0 gap	That drop uses the full operating cushion.
Fixed-cost pressure	Lift fixed commitments 20% to $48,300.	$51,111	$46 gap	Rent or payroll growth can almost erase the cushion.
Margin pressure	Raise variable costs from 5.5% to 10.5%.	$44,973	$6,092 cushion	Fee drift from processing or telehealth cuts cushion fast.
Combined pressure	Cut sessions 10%, raise fixed commitments 20%, and lift variable costs to 10.5%.	$53,966	$8,007 gap	Cancellations plus higher payroll or rent push it below break-even.

Before you sign the lease, have you proved the sessions and cash this practice needs to break even?

Founder checklist

Don’t lock in rent or new hires until the referral flow can support about 269 billed sessions a month and the practice can carry a $40.25K monthly fixed load. The model also needs about $868K of cash to survive the Month 2 low point.

1Referral Pipeline500 sessions/mo

Prove the Year 1 referral flow can keep about 500 sessions a month coming in before you commit to the $3,500 rent.

2Fixed Load$40.25K/mo

Confirm recurring overhead really lands at $40.25K a month, including $6.5K in office and software costs plus $33.75K in payroll.

3Session Capacity269 billed/mo

Make sure staffing can cover at least 269 billed sessions a month, because that is the break-even load at the model's fees and variable costs.

4Fee Mix$159/session

Confirm the payer mix and cash-pay share before you count reimbursement; the Year 1 blend is about $159 per session, and lower-priced work pulls break-even out.

5Cash Cushion$868K min

Hold enough cash for the Month 2 dip; the model's minimum cash need is $868K, so thin reserves make the lease and hiring plan fragile.

6Launch Stack$51.2K capex

Get telehealth, EHR, payment, and scheduling tools live first, and keep the $51.2K of one-time capex separate from recurring overhead.