Vestibular Rehab Clinic Break-Even Analysis: Month 2 Target

Fixed costs $8.8K/mo Core monthly overhead

Contribution margin 82.5% After variable costs

Break-even revenue $10.6K/mo Revenue to cover overhead

Break-even timing Month 2 Model break-even point

Break-even calculator

Use this to test whether monthly revenue clears variable costs and then covers fixed overhead.

Lean Base Full

Monthly revenue Revenue is the pool that pays variable costs and then fixed overhead. $ Low volume Busy clinic Variable expenses These rise with volume, like direct clinical supplies, billing, and outreach. $ Low direct cost High direct cost

Money available to cover fixed costs $128,146 $150,583 revenue - $22,437 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

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

Break-even chart Revenue Total costs

Which vestibular rehab clinic expenses are fixed, variable, semi-variable, or semi-fixed?

Cost classification

Classify costs before calculating break-even, because only revenue-linked costs reduce contribution margin while fixed overhead must be covered every month. For this clinic, Month 2 break-even depends on separating flat rent from session-driven supplies, claims processing, and step-up staffing.

Expense	Cost	Break-Even Treatment	Common Mistake
Specialized Clinic Rent, $6,500/month	Fixed	Include the full monthly amount in overhead before testing treatment volume.	Dividing rent by sessions and treating it like it rises with each visit.
EMR and HIPAA Compliance Software, $850/month	Fixed	Count it as recurring monthly overhead across Month 1 through Month 60.	Scaling software expense with revenue when the model gives a flat monthly amount.
Professional Liability Insurance, $1,200/month	Fixed	Keep it in fixed overhead for the clinic’s normal monthly planning range.	Dropping insurance below the break-even line because it is not tied to visits.
Janitorial and Medical Waste Services, $450/month	Semi-variable	Use the base monthly amount, then review waste load as visit volume grows.	Modeling it as fully fixed even when higher patient flow can raise service needs.
Clinical Supplies and Disposables	Variable	Apply as a revenue-linked charge inside contribution margin.	Putting treatment supplies in overhead, which overstates margin per session.
Patient Education Materials and Home Kits	Variable	Treat as a per-treatment or revenue-linked expense that moves with patient volume.	Budgeting one flat monthly kit spend while visits rise.
Medical Billing and Claims Processing	Variable	Deduct from revenue before calculating how much is left to cover overhead.	Counting claims processing as fixed even though it follows billed activity.
Patient Care Coordinator and Medical Billing Specialist payroll	Semi-fixed	Add payroll in staffing steps as full-time equivalent levels increase.	Assuming front-desk and billing payroll grows smoothly with each treatment.

How does break-even change across lean, base, and full vestibular rehab scenarios?

Scenario table

As visits, staffing, and payer mix improve, fixed costs get spread over more revenue and the margin widens. The lean case works, but the base case hits Month 2 break-even and the full case creates a large cushion.

Planning assumptions only; actual margins will move with referral flow, staffing, and payer mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$401k	$70k	$257k	82.5%	$74k	Works, but the cushion is thin if referrals slow.
Base steady clinic case	$939k	$150k	$319k	84.0%	$470k	Hits Month 2 break-even and absorbs normal demand swings.
Full scaled clinic case	$3,571k	$454k	$490k	87.3%	$2,627k	Builds a strong cushion as capacity and referral depth rise.

What can push this vestibular rehab clinic below break-even?

Stress test

At an 82.5% contribution margin, the plan has about $89,000 of cushion above a $312,000 break-even point. Slow physician referrals, no-show clusters, and denied claims are the first signs that cushion is fading.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$312,000	$89,000 cushion	The plan clears break-even, but the cushion is not huge.
Revenue shortfall	Referral volume drops 25% from the current plan.	$312,000	$11,000 gap	Fewer referrals or more cancellations push the clinic below break-even.
Fixed-cost increase	Monthly overhead rises by $10,000.	$324,000	$77,000 cushion	Every extra $10,000 of overhead adds about $12,000 to required revenue.
Margin pressure	Variable costs rise to 20.0% of revenue.	$322,000	$79,000 cushion	Higher billing leakage or outreach spend lifts break-even fast.
Combined pressure	Referral revenue drops 25%, overhead rises $10,000, and variable costs rise to 20.0%.	$472,000	$171,000 gap	Lower reimbursement plus higher rent or payroll can erase the Month 2 break-even signal.

What should a vestibular rehabilitation therapy founder verify before signing the lease and hiring ahead?

Founder checklist

Check the path before you lock the lease or add staff. If referrals, billing, and first-year capacity do not support the Month 2 break-even path, the $756K minimum cash cushion gets tight fast.

1Referral Paths4 sources

Verify real patient flow from ear, nose, and throat, neurology, primary care, and audiology before you commit to $6,500 monthly rent.

2Fixed Burn$32.4K/mo

Confirm Year 1 rent, software, insurance, and base payroll can clear each month’s fixed load before you add more overhead.

3Reimbursement$175/$145/$110

Test whether session pricing holds by provider type so the payer mix can carry the margin you modeled.

4Capacity Ramp91/96/94/mo

Check Year 1 capacity for senior specialist, staff physical therapist, and assistant visits before you hire ahead of demand.

5Billing SetupPre-launch

Finish credentialing and test scheduling, cancellations, and intake flow before the launch month so visits turn into cash cleanly.

6Cash Cushion$756K min

Keep the $218.5K equipment and buildout capex outside operating break-even so the Month 2 cash floor stays intact.