Wheel Alignment Break-Even Analysis: $28K Monthly Revenue Target

Fixed costs $23.9K/mo Monthly overhead base

Contribution margin 84.5% After variable costs

Break-even revenue $28.3K/mo Revenue needed

Break-even timing Month 7 Model crosses here

Break-even calculator

Test whether monthly revenue covers variable costs and the fixed shop base.

Lean Base Full

Monthly revenue This is the monthly sales line that has to support the shop. $ Lower sales Higher sales Variable expenses Use direct shop costs that rise with each alignment sold. $ Lower cost Higher cost

Money available to cover fixed costs $22,300 $26,400 revenue - $4,100 variable expenses

Margin ratio

84%

Covers fixed costs

$1,600 short

Fixed monthly costs This is the monthly cost base that margin must cover. $ Lean shop Big shop

Break-even chart Revenue Total costs

Which wheel alignment service expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful if fixed overhead stays separate from expenses that move with jobs or revenue. Rent and salaried roles set the monthly hurdle, while parts and usage-linked costs reduce contribution margin.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Rent/Lease — $4,000/month	Fixed	Include in monthly overhead before calculating break-even jobs.	Don’t tie rent to daily job count.
Shop Insurance — $300/month	Fixed	Include monthly across the full planning period.	Don’t bury insurance in variable expenses.
Software Subscriptions — $250/month	Fixed	Include as recurring overhead separate from per-revenue fees.	Don’t double-count diagnostic software fees.
Utilities — $800/month baseline	Semi-variable	Use the baseline, then stress test higher usage as visits rise.	Don’t assume utilities stay flat at 38 visits/day.
Equipment Maintenance — $400/month	Semi-fixed	Include the baseline and review as throughput increases.	Don’t ignore lift and alignment system wear.
Shop Manager and Lead Technician payroll — $130,000/year	Fixed	Convert annual salaries to monthly payroll overhead.	Don’t treat salaried labor as per-job labor.
Automotive Technician payroll — $45,000/year per FTE	Semi-fixed	Add capacity when volume supports the FTE ramp.	Don’t hire ahead of demand.
Cost of Parts Sold — 8.0% of revenue in the first year	Variable	Subtract from revenue before contribution margin.	Don’t include parts in fixed monthly overhead.

How does break-even change across lean, base, and full shop formats?

Scenario table

Higher visits and a better mix spread fixed shop costs across more billable work, so break-even improves fast from lean to full. The base case is the right staffing check; full usage is the mature target.

Planning assumptions only; actual results will move with mix, pricing, and shop efficiency.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch scenario	$35,046	$5,432	$23,900	84.5%	$5,714	Revenue is just above the $28,284 break-even line, so the cushion is thin.
Base staffing scenario	$56,550	$8,198	$27,442	85.5%	$20,908	Revenue clears the $32,095 break-even line with room for steady staffing.
Full utilization scenario	$173,039	$19,380	$37,650	88.8%	$116,009	Revenue sits far above the $42,399 break-even line, which gives a strong cushion.

What pushes this wheel alignment shop below break-even?

Stress test

The base plan clears about $5.7k a month, but a 15% revenue drop or 10% higher fixed costs trims the cushion fast. Add both plus a 5-point margin squeeze, and the shop swings to about a $2.6k monthly gap.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$28,285	$5,714 cushion	Steady bookings clear costs, but slack is limited.
Revenue shortfall	Revenue falls 15% to about $29,789.	$28,285	$1,272 cushion	Missed appointment targets and discounting below $161.75 a visit cut room fast.
Fixed-cost increase	Fixed costs rise 10% to about $26,290 a month.	$31,112	$3,324 cushion	Rent above $4,000 or early payroll additions tighten the plan.
Margin pressure	Variable expenses rise 5 points to 20.5% of revenue.	$30,063	$3,962 cushion	Rework that eats technician capacity lowers margin even if volume holds.
Combined pressure	Revenue falls 15%, variable expenses rise to 20.5%, and fixed costs rise 10%.	$33,082	$2,608 gap	That mix pushes the shop below break-even and starts burning cash.

What should you verify before signing the lease and buying alignment equipment?

Founder checklist

Do not commit until demand, site fit, and cash all clear the model. This shop needs at least 175 visits a month, about $205,000 of startup spend, and roughly $23,900 of fixed overhead a month before the break-even path looks real.

1Demand Floor175/mo

Verify you can book at least 175 visits a month before launch, because lower volume will not support the lease and payroll load.

2Startup Load$205K

Confirm the site can hold the laser alignment system, two lifts, scanners, tire balancer and changer, facility improvements, and $12,000 of initial parts inventory.

3Fixed Overhead$23.9K/mo

Check that rent, utilities, software, maintenance, and Year 1 pay for one shop manager, one lead technician, one automotive technician, and one customer service rep stay near $23,900 a month.

4Margin Check84.5% CM

Test that Year 1 prices of $115, $170, $75, and $105 still leave an 84.5% contribution margin after 8.0% parts, 2.0% consumables, 4.0% marketing, and 1.5% software fees.

5Throughput15/day

Verify the launch team can handle 15 visits a day before you add Year 2 headcount, because that is the point where the labor ramp starts to make sense.

6Cash Cushion$718K

Hold enough cash to cover the Month 12 low point of $718,000, since Year 1 EBITDA is still negative before the model turns positive in Year 2.