Kyalami Surface Business Plan — Break-even Analysis
The job volume and utilisation needed to cover the cost base, and when the business crosses break-even.
Section 26 of 31
Break-even Analysis
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- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. Investment Thesis
- 3. Company and Business Overview
- 4. Problem, Customer Need and Value Proposition
- 5. Products and Services
- 6. Industry Analysis
- 7. Market Analysis
- 8. Customer Analysis
- 9. Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model
- 13. Management and Organisation
- 14. Strategic Plan
- 15. SWOT Analysis
- 16. Risk Analysis
- 17. ESG and Sustainability
- 18. Implementation Roadmap
- 19. Financial Plan: Assumptions
- 20. Projected Income Statement
- 21. Projected Balance Sheet
- 22. Projected Cash Flow
- 23. Capital Expenditure and Working Capital
- 24. Funding Requirement and Structure
- 25. Break-even Analysis
- 26. Investment Case and Returns
- 27. Sensitivity and Scenario Analysis
- 28. Key Performance Indicators and Management Dashboard
- 29. Conclusion
- 30. Appendices
A mature single studio breaks even at R1.27m of monthly revenue — 59% installer utilisation.
Calculated on the mature single-studio cost structure at month 18.
Table 38. Break-even calculation
|
Item |
Value |
|---|---|
|
Reference month |
Month 18 (mature single studio) |
|
Monthly revenue at reference |
R1,649,655 |
|
Variable costs (film, consumables, rework, commission, cards, marketing) |
37.2% of revenue |
|
Contribution margin |
62.8% |
|
Monthly fixed cost base (including installer payroll) |
R796,304 |
|
Break-even revenue per month |
R1,267,744 |
|
Break-even installer utilisation |
59.1% |
|
Margin of safety at reference month |
23.2% |
|
First month EBITDA-positive |
Month 15 |
|
First month cumulative EBITDA-positive |
Month 36 |
|
First month operating cash flow positive |
Month 15 |
Installer payroll is treated as fixed in this calculation, which is the conservative and correct treatment: certified installers cannot be hired and released with monthly demand without destroying the capability the Company is trying to build. This is why break-even utilisation is as high as it is, and it is the central economic fact of the business.
Note also that January trading falls below break-even utilisation in every year of the plan. This is expected and funded: the January shortfall is absorbed by the November and December surplus. It does mean, however, that a January cash position should never be read as an indicator of underlying performance.