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Key Takeaways
- The minimum required monthly operating budget to sustain the Medical Simulation Training platform in 2026 is approximately $86,800.
- Specialized payroll is the single largest expense category, consuming over 62% of the total monthly running costs.
- Despite achieving a strong 92% gross margin, high fixed overhead and labor costs necessitate rapid subscription revenue growth for profitability.
- A minimum cash runway equivalent to three months of operating expenses, totaling around $260,000, is crucial to buffer against revenue volatility and high initial CapEx.
Running Cost 1 : Specialized Staff Wages
Key Wage Commitment
Specialized staff wages total $54,000 monthly, consuming the largest part of your operating budget. This fixed cost funds the Lead Software Engineer and Medical Expert Curriculum Designer needed to build the core simulation platform.
Talent Cost Drivers
This $54,000 estimate covers salaries for the highly specialized personnel required to develop immersive training content. You need firm quotes for senior engineering talent and subject matter experts to lock this monthly fixed expense. These wages represent about 62% of your total initial running costs.
- Lead Software Engineer salary input.
- Curriculum Designer salary input.
- Total fixed monthly staff cost.
Managing Salary Burn
High upfront cash outlay for specialized talent demands careful management; offset salary needs with equity grants (ownership shares). Avoid hiring non-essential staff before securing initial B2B subscriptions to manage the $54k monthly drain. Legal and Accounting fees are only $2k, so staff is your main lever.
- Use strict vesting schedules for equity.
- Delay hiring until revenue visibility improves.
- Benchmark salaries against comparable tech firms.
Staffing Timeline Risk
If the hiring process for these two key roles extends past 90 days, your content delivery date slips, delaying subscription revenue needed to cover the $54,000 monthly payroll. This is defintely your primary near-term operational risk point.
Running Cost 2 : Cloud Hosting & Data Storage
Hosting Budget Check
Your cloud hosting budget is set at $5,750 monthly right now. This figure represents a significant 50% of projected 2026 subscription revenue. Since this expense scales with your user occupancy rate, managing infrastructure efficiency is crucial for margin control as you onboard more healthcare systems.
Cost Drivers
This $5,750 covers the infrastructure supporting your immersive VR training and performance analytics storage. Estimation relies on the 50% allocation against anticipated 2026 subscription revenue, directly tied to how many staff members are actively using the platform. It’s a variable cost that grows with usage, unlike fixed rent.
- VR simulation processing load.
- Data storage volume per user session.
- Projected 2026 revenue baseline.
Controlling Cloud Spend
You must watch infrastructure scaling closely because this cost is tied to occupancy. Avoid over-provisioning resources for peak simulation loads that only happen occasionally. Look into reserved instances for baseline storage needs to lock in better rates now.
- Audit data retention policies monthly.
- Use reserved instances for steady loads.
- Monitor egress fees closely.
Occupancy Risk
Since hosting is 50% of 2026 revenue, any delay in achieving target occupancy rates means this cost consumes too much cash flow early on. If onboarding takes longer than expected, this $5,750 monthly burn rate becomes a defintely higher percentage of actual income.
Running Cost 3 : Office Rent
Fixed Office Budget
Budget $5,000 monthly for office rent, a fixed cost covering administrative needs and R&D space. This allocation is independent of your training volume, meaning it hits the P&L regardless of subscription uptake. You defintely need this space operational before you can build out complex simulations.
Cost Allocation Detail
This $5,000 covers physical space for administrative staff and R&D teams building those high-fidelity models. To estimate this, you need quotes for square footage suitable for your core team. It's a key fixed overhead component, sitting right next to the $54,000 in specialized staff wages.
- Covers admin and R&D functions.
- Fixed cost, zero volume dependency.
- Part of total fixed overhead.
Managing Space Costs
Seek flexible lease terms, maybe month-to-month or 12-month agreements, especially while R&D is scaling. A common mistake is signing a long lease before validating subscription growth. Consider shared lab space to keep this cost low initially.
- Prioritize flexibility over prestige.
- Test hybrid work models first.
- Keep lease term under 24 months.
Fixed Cost Impact
Since rent is fixed, your sales team needs to drive enough volume to cover this $5,000 plus the $54,000 in wages. Fixed costs like this mean your break-even point is high; you're not saving money by having fewer training sessions. Every seat sold must contribute heavily to covering this base.
Running Cost 4 : Legal & Accounting Fees
Compliance Budget
You must budget $2,000 monthly for legal and accounting services. This covers mandatory compliance, contract review, and financial reporting necessary because you operate in the highly regulated medical training sector. Don't treat this as optional overhead.
Fixed Compliance Cost
This $2,000 covers essential legal work, like reviewing B2B subscription agreements and ensuring regulatory reporting is accurate, plus monthly financial statements. It's a fixed cost, independent of training volume, but it’s non-negotiable given the medical focus of your platform. Here’s the quick math on what it covers:
- Contract review for B2B seats
- Regulatory reporting needs
- General ledger setup
Managing Legal Spend
Don't try to skimp on specialized legal help early; regulatory fines are defintely more expensive than proactive counsel. Use a fixed-fee retainer for routine compliance checks instead of volatile hourly billing when possible. This keeps your monthly spend predictable, which CFOs love.
- Use fixed-fee retainers
- Bundle compliance needs
- Avoid hourly surprises
Contract Readiness
Since you sell subscriptions to hospitals and schools, ensure your standard client contract template is fully vetted by counsel before the first major sale closes, maybe by March 2025. This upfront investment prevents costly scope creep or liability issues down the road.
Running Cost 5 : Sales Commissions
Commission Budget
Sales commissions are budgeted at $9,200 monthly. This cost directly ties sales payouts to subscription revenue, specifically targeting the higher-tier Pro and Enterprise deals. You must ensure this 80% payout rate drives enough volume to cover fixed costs. That’s a heavy incentive.
Calculating Payouts
This $9,200 estimate requires tracking total subscription revenue monthly. The calculation is simple: Total Subscription Revenue multiplied by 80% equals the commission pool. If subscription revenue dips below $11,500 ($9,200 / 0.80), this cost structure is unsustainable, or you’re not selling enough. Watch that baseline.
- Inputs: Total Subscription Revenue
- Factor: 80% payout rate
- Target: $11,500 minimum revenue
Incentive Management
Managing this cost means optimizing the sales cycle for high-value contracts. A high 80% payout incentivizes closing large Enterprise deals fast. If sales reps focus only on small, quick wins, this commission structure won't scale efficiently. Defintely review deal size targets against your $9,200 spend.
- Avoid rewarding low-value sales
- Focus on Enterprise adoption
- Ensure 80% drives volume
Operationalizing Commissions
Tie commission payouts directly to Annual Recurring Revenue (ARR) milestones rather than just monthly collections. This stabilizes the $9,200 estimate and aligns sales effort with long-term customer value. Monitor churn closely, as paying a high commission on a short-term contract is a definite net loss for the business.
Running Cost 6 : Third-Party Content Licensing
Licensing Cost is Variable
Third-party licensing sets a baseline cost of $3,450 per month, but this expense scales directly, consuming 30% of your subscription revenue. Quality content is non-negotiable for medical training validation, so treat this as a direct cost of service delivery.
Estimate Inputs and Budget
This $3,450 is the initial monthly projection for specialized medical content needed to keep your curriculum current. Since it ties to 30% of subscription revenue, you must model this against projected sales volume. If revenue hits $11,500, this cost is exactly $3,450; if revenue doubles, so does this licensing expense. You defintely need clear revenue tracking here.
- Cost is 30% of monthly sales.
- Initial fixed estimate: $3,450.
- Crucial for curriculum quality.
Manage Content Spend
Reducing content spend risks curriculum integrity, which is your core value. Negotiate multi-year agreements for better rates instead of month-to-month contracts. Audit usage quarterly to ensure you aren’t paying for licenses your staff never accesses. Don't let vendor lock-in dictate your growth trajectory.
- Seek multi-year rate locks.
- Audit content usage often.
- Avoid paying for unused seats.
Impact on Margins
Treat this licensing spend as a Cost of Goods Sold (COGS) component, not just overhead. If you can negotiate the rate down to 25% of revenue, that extra 5% margin flows straight to your bottom line, significantly improving your gross contribution.
Running Cost 7 : Software Subscriptions
Fixed Software Burn
Budget $2,200 monthly for all required software, split between $1,500 for core operations and $700 for marketing tech. This is a non-negotiable fixed overhead component for launch.
Inputs for Software Budget
Estimate this cost by summing quotes for necessary platforms like CRM and analytics. The $1,500 operational budget supports internal processes, while the $700 marketing budget fuels outreach to hospitals. This is a pure fixed expense.
- Core operations: $1,500/month
- Marketing tech: $700/month
- Total fixed software: $2,200
Controlling Subscription Spend
Avoid paying for unused seats or premium features before volume justifies them. Audit usage quarterly to cut redundant tools, especially in marketing where overlap is common. Don't commit to annual billing too soon.
- Audit usage every 90 days
- Prioritize operational necessity
- Delay feature upgrades
Fixed Cost Impact
This $2,200 is pure fixed overhead, meaning it hits your burn rate regardless of training sessions booked. If your target monthly gross profit per contract is $5,000, you need to secure at least 0.44 contracts just to cover this single line item.
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Frequently Asked Questions
Monthly running costs start near $86,800 in 2026, primarily driven by $54,000 in specialized payroll and $12,700 in fixed overhead Your high 92% gross margin provides a strong foundation, but aggressive growth is needed to cover the high operational burn rate