Used Tire Shop Break-Even Analysis: $248K Monthly Revenue Target

Fixed costs $20.4K/mo Base overhead

Contribution margin 82% After variable cost

Break-even revenue $24.8K/mo Monthly target

Break-even timing Month 19 Model break-even

Break-even calculator

Use this calculator to compare monthly revenue, variable expenses, and fixed costs against break-even for a used tire shop.

Lean Base Full

Monthly revenue Revenue sets the pool that pays variable costs and fixed overhead. $ Low sales High sales Variable expenses These are direct costs like inventory and install supplies that rise with sales. $ Low costs High costs

Money available to cover fixed costs $33,500 $41,000 revenue - $7,500 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base the shop must cover before profit starts. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which used tire shop expenses are fixed, and which move with sales?

Cost classification

Break-even works only if tire inventory and supplies move with sales while rent, payroll, and other monthly overhead stay fixed. Misclassify inventory as overhead, and the Month 19 break-even target can look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Rent	Fixed	Use $4,000 per month across the planning range.	Reducing rent per slow month instead of holding it flat.
Payroll	Fixed	Use first-year wages of $170,000 annually, about $14,167 per month.	Treating base staff pay as variable with each tire sale.
Used Tire Inventory Acquisition	Variable	Apply 12% of revenue in the first year.	Treating tire inventory like fixed overhead.
Installation Supplies	Variable	Apply 6% of revenue in the first year.	Forgetting supplies rise with installation volume.
Utilities	Fixed	Use $800 per month unless shop volume changes materially.	Over-modeling small usage swings before volume proves it.
Insurance	Fixed	Use $400 per month during the operating period.	Linking insurance to monthly sales without a policy trigger.
Marketing	Fixed	Use the planned $500 monthly spend in break-even overhead.	Cutting marketing to force a lower break-even point.
Equipment Maintenance	Fixed	Use $300 per month for recurring shop upkeep.	Mixing the $62,000 startup capex into monthly break-even.

How does break-even shift as a used tire shop moves from lean to base to full staffing?

Scenario table

Break-even rises as traffic, conversion, and ticket value improve, but each step also adds payroll. So the shop needs more monthly sales to cover costs, yet the profit cushion gets better if tire supply and technician time stay available.

Planning figures only; actual results can move with traffic, pricing, staffing, and tire supply.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean shop, Year 1 staffing	$41.4k	$7.5k	$19.4k	82%	$14.6k	Break-even is about $23.6k per month, so lean traffic can cover costs but leaves a thin cushion.
Base shop, Year 2 staffing	$64.8k	$10.7k	$27.9k	83.5%	$26.3k	Break-even is about $33.4k per month, so the second tech only works if sales stay steady.
Full shop, Year 3 staffing	$95.7k	$14.4k	$31.2k	85%	$50.2k	Break-even is about $36.7k per month, and the stronger margin gives the widest cushion.

What breaks first if sales soften or costs rise?

Stress test

The base plan clears break-even at about $248.8k in annual revenue, but the cushion is thin. If sales slip or tire and supply costs rise, the shop can lose the margin it needs to cover $204k of fixed costs.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$248.8k	$0 cushion	Year 1 EBITDA is -$132k, so early cash pressure stays real.
Revenue miss	Sales fall 10% below the base plan.	$248.8k	$24.9k gap	A modest sales miss keeps the shop below the break-even bar.
Fixed cost bump	Fixed overhead rises 10% from payroll, rent, and utilities.	$273.7k	$24.9k gap	Higher overhead pushes the break-even line up fast.
Margin squeeze	Variable costs rise from 18% to 21% of sales.	$258.2k	$9.4k gap	Each lost margin point means more sales just to stand still.
Combined hit	Sales fall 10%, fixed costs rise 10%, and variable costs rise to 21%.	$284.1k	$35.3k gap	If monthly orders sink under 133 and hiring stays ahead of demand, losses widen fast.

What should you verify before signing the lease and hiring for this used tire shop?

Founder checklist

Do not lock the shop until the fixed monthly load, opening capex, and staffing plan can survive the slow ramp to break-even. The model does not break even until Month 19, and Year 1 EBITDA is -$132k, so the cushion has to be real.

1Lease Load$6.2K/mo

Verify rent, utilities, insurance, marketing, maintenance, and office supplies together, because that fixed load hits before revenue catches up.

2Demand Proof133/mo

Test whether walk-in traffic can support about 133 monthly orders, since break-even depends on steady visit volume, not occasional spikes.

3Unit Margin82% CM

Check that used tire sourcing stays near the 12% Year 1 inventory acquisition plan and that the 5% disposal fee is collected cleanly so contribution stays strong.

4Install Capacity1 tech

Confirm one lead technician can handle installation work before you count on more service sales, because the second technician does not start until Month 13.

5Capex Plan$62K

Budget the full opening spend for shop fit-out, tire mounting machine, balancing equipment, inspection tools, POS system, and signage before you open.

6Cash Buffer$713K

Hold enough working capital to reach the Month 19 break-even point and survive the Month 23 minimum cash trough without scrambling for rescue money.