Sparkle Lane Business Plan — Break-Even

The cars per day and subscriber base needed to cover the site cost base, and when each site crosses its own break-even.

Break-Even

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Single-site break-even. The gap to the mature target is the buffer against weather and seasonality
Figure 19. Single-site break-even. The gap to the mature target is the buffer against weather and seasonality.

Measure

Value

Basis

Break-even revenue per site

R2.23m

Site fixed cost divided by the contribution margin

Break-even cars per day

50

At a blended R126.86 per car

Plan at maturity

66 cars per day

The modelled mature site throughput

Margin of safety

24.2%

The buffer against weather and seasonality

Revenue per car

R126.86

Blended across walk-in, subscription and ancillary

Including group overhead at a third share

49 cars per day

25.8% margin of safety once overhead is shared across three sites

A margin of safety of 24.2 per cent sounds comfortable on an annual view. It is not comfortable in a wet fortnight. This is precisely what the subscription base is for: R3.52 million of Year 5 revenue arrives whether it rains or not, and that converts a weather-dependent business into one with a floor beneath it.