Fixed costs

Fixed costs are the bills that arrive on schedule regardless of production: rent, staff wages and payroll taxes, loan payments, insurance premiums, software subscriptions and utilities. They do not flex with a slow week or a canceled morning, which is exactly why they are the number you use to calculate break-even: the daily or monthly production required just to cover what the practice owes before a single patient contributes a dollar of profit.

The distinction that trips owners up is doctor compensation. It feels fixed because a paycheck goes out every period, but it actually moves with production for an associate paid a percentage, or with profit for an owner paying themselves from what is left over, which makes it a variable cost in the break-even model, not a fixed one. Lump it in with rent and the break-even number comes out too low, which is the single most common mistake owners make running this calculation on a napkin.

List every fixed cost from the P&L, divide the monthly total by the days the practice is actually open, and that daily figure is the floor the schedule has to clear before profit starts. It is the honest starting point for any conversation about whether the schedule, the fee schedule, or the expense side needs to change.