Upscale Sober Living Break-Even: About $218K Monthly Revenue

Fixed costs $176.0K/mo Monthly overhead base

Contribution margin 83% After variable spend

Break-even revenue $212.0K/mo Monthly target

Break-even timing Month 2 Launch month

Break-even calculator

Use this calculator to test whether monthly revenue covers variable expenses and fixed costs at break-even.

Lean Base Full

Monthly revenue Revenue is the cash that has to cover variable costs and the fixed base. $ Soft month Peak month Variable expenses Marketing and practitioner fees rise as occupancy and service use rise. $ Low spend High spend

Money available to cover fixed costs $648,691 $682,833 revenue - $34,142 variable expenses

Margin ratio

95%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that contribution margin must cover. $ Slim setup Full staff

Break-even chart Revenue Total costs

Which expenses stay fixed and which move with resident volume?

Cost classification

Break-even only works if monthly overhead and resident-driven spend are separated cleanly. Here, the first-year model carries $126k/month of fixed facility overhead before payroll, food, amenities, marketing, or practitioner fees.

Expense	Cost	Break-Even Treatment	Common Mistake
Luxury Property Lease	Fixed	Include $80k/month in fixed overhead from Month 1 through Month 60.	Treating the lease as occupancy-driven.
Property Insurance	Fixed	Include $8k/month in required overhead before calculating resident-level margin.	Leaving insurance out of monthly overhead.
High-End Property Maintenance	Semi-fixed	Use the $15k/month baseline, then step it up when scale or wear rises.	Ignoring upscale repair spikes.
Utilities & Internet	Semi-variable	Start with the $10k/month baseline and allow usage pressure as resident count grows.	Assuming utilities do not rise with occupancy.
Residential Support Staff	Semi-fixed	Model payroll by staffing step: 2.0 FTE in the first year, rising to 6.0 FTE by the fifth year.	Modeling support staff as purely per-resident.
Gourmet Food Services	Variable	Apply 6.0% of first-year revenue, then use the lower forecast rates in later years.	Calling all food spend fixed.
Marketing & Client Acquisition	Variable	Apply 5.0% of first-year revenue, tied to admissions and revenue growth.	Ignoring slower admissions.
Specialized Wellness Practitioner Fees	Variable	Apply 3.0% of first-year revenue as resident service volume scales.	Confusing resident services with fixed payroll.

How does break-even shift from a lean opening to a full Year 2 operating setup?

Scenario table

The break-even point moves fast because monthly revenue rises faster than variable costs, while the core lease and staffing load stays heavy. Here’s the quick math: more revenue density gives you more cushion, but only if occupancy holds.

Planning figures only; they depend on occupancy, service mix, and staffing pace, so treat them as assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening case	$218,000	$37,060	$181,000	83%	$-60	Very close to break-even; a small slip in occupancy turns negative.
Base Year 1 case	$269,167	$45,758	$181,000	83%	$42,409	Covers fixed costs and leaves about $42k a month before other model items.
Full Year 2 case	$429,833	$63,615	$193,083	85.2%	$173,135	Strong cushion; higher payroll still leaves healthy coverage.

What breaks the break-even plan first for upscale sober living?

Stress test

Year 1 planned monthly revenue is about $269k and break-even is about $218k, so the cushion is only about $51k. Slower move-ins plus extra payroll break the model first; lease and food inflation tighten the margin next.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$218,072	$51,095 cushion	Healthy on paper, but the cushion is thin.
Revenue shortfall	Monthly revenue falls 20% to about $215k.	$218,072	$2,739 gap	A modest drop pushes the plan below break-even.
Fixed-cost pressure	Luxury Property Lease rises 10% to $88,000 per month.	$227,711	$41,456 cushion	Housing cost inflation quickly eats the cushion.
Margin pressure	Direct costs rise to 19% of revenue.	$223,457	$45,710 cushion	Food and amenities inflation push break-even up.
Combined pressure	Monthly revenue falls 20% and Wellness Coordinator staffing rises to 1.5 FTE.	$222,289	$6,956 gap	Slower move-ins and added staff break the model fastest.

What should you verify before signing the lease and funding the build-out?

Founder checklist

Do not sign the lease until the monthly revenue path clears break-even on paper. This model needs about $218K/month in total revenue against a $181K/month fixed base, with break-even in Month 2 and a cash trough near -$2.743M in Month 12.

1Demand Proof$218K/mo

Confirm pre-commitment demand can reach at least $218K/month, because that is the total revenue floor the opening plan has to clear.

2Fee Mix$240K/mo + $29K/mo

Price rooms before you furnish them, and verify residency fees can hit $240K/month while premium services and property income add about $29K/month.

3Fixed Base$181K/mo

Check that lease, insurance, utilities, security, software, licensing, and payroll stay near the $181K/month fixed load, or break-even slips.

4Margin Load83% CM

Keep Year 1 variable costs near 17% of revenue so contribution margin (money left after variable costs) stays around 83% before fixed overhead.

5Staff Ramp1.0→6.0 FTE

Open only when the director, chef, wellness, concierge, support, and maintenance roles can scale to the planned load without dropping service.

6Cash Cushion$2.743M

Hold enough cash to cover the Month 12 low of about -$2.743M and the $4.05M build-out, so renovation and launch do not starve operations.