# New Store Break-even & Payback Calculator | Free Tool | Commmerce™ > Opening another outlet? Work out monthly break-even sales, payback months and peak cash needed for a new store, at store level and after head office costs. Canonical: https://commmerce.com/tools/new-store-break-even-calculator.html Free Tool # New Store Break-even & Payback Calculator Opening your 3rd, 10th or 25th outlet? Enter what the store will cost to open and run, and see the monthly sales it needs to break even, how long it takes to pay back, and how much cash you need until it does. ### Money to open the store (₹, one-time) Fit-out, interiors and signage Equipment (POS, racks, CCTV, AC, chillers) Pre-opening (licences, hiring, training, launch) Opening stock at cost Rent deposit (refundable) Count the deposit in payback ### Monthly running costs (₹) Rent and maintenance (CAM) Staff salaries and incentives Electricity, security, software and other fixed costs Share of head office cost (optional) ### Sales and margin Monthly sales once the store is mature (₹, excluding GST) Gross margin after discounts (%) Other variable costs (% of sales) Months to reach full sales First-month sales (% of mature) #### Related tools [Margin Calculator](margin-calculator.html)[Multi-store Fragmentation Estimator](multi-store-fragmentation-cost-estimator.html)[Inventory Days Calculator](inventory-days-calculator.html)[Reorder Point Calculator](reorder-point-calculator.html)[Break-even & Ad Spend](break-even-calculator.html)[EMI Calculator](emi-calculator.html) **Disclaimer:** This free tool is provided by Commmerce for general informational and estimation purposes only. Results are indicative and depend entirely on the figures you enter; they are not a forecast of how any store will perform. Commmerce makes no warranty as to accuracy or completeness and accepts no liability for any loss or decision made based on this tool. Always check your expansion plan with a qualified professional (chartered accountant or financial adviser) before committing money. ## Store-level vs company-level break-even A new outlet has two break-even points, and chains often mix them up. **Store-level break-even** is the monthly sales at which the store's own gross profit covers its own rent, staff and running costs. Below it, the store loses money on its own. Above it, it contributes to the business. **Company-level break-even** adds the store's share of head office cost: buying, accounts, area managers, the warehouse and the software that runs it all. A store can pass store-level break-even and still not pay its share of the centre. Both numbers matter: the first tells you whether to keep the store open, the second whether opening more stores like it grows group profit. ## What to count ### Money to open the store **Fit-out and equipment** are sunk once spent. **Pre-opening costs** such as trade licence, shop and establishment registration, hiring, training and launch marketing are easy to forget and add up. **Opening stock** is working capital: not lost, but locked on the shelves, and a new store usually needs a full range before its sales justify one. A **refundable deposit** comes back when you leave, so the calculator keeps it out of payback by default but counts it in the cash you need. ### Monthly running costs Rent and maintenance charges, salaries with incentives and PF/ESI, electricity (often the second-largest cost for stores with chillers or air conditioning), security, internet, software subscriptions and repairs. Use full monthly figures, not the first month's discounted rent. ### Margin and variable costs Use **gross margin after discounts** on sales excluding GST, not the margin printed on your price list. Then deduct costs that rise with sales: card and UPI charges, carry bags and packaging, shrinkage and damage, and any franchise royalty or mall revenue share. What is left is the contribution margin, which is what pays the fixed costs. ### Ramp-up Few stores hit full sales in month one. The calculator starts at the first-month percentage you enter and rises evenly to full sales over the months you choose. The losses in those early months are often what stretches payback and cash, so test a slower ramp as well as your expected one. ## How the calculator works Contribution margin = gross margin minus other variable costs. Store-level break-even sales = monthly running costs divided by contribution margin. Company-level break-even adds the head office share to running costs. Payback is the first month in which cumulative store profit, including ramp-up losses, covers the money to open the store. Peak cash needed is the deepest point of that running total, plus the deposit. ### Worked example (illustrative numbers) These figures are made up to show the method. Use your own. A chain opening its 11th store spends ₹15 lakh on fit-out, ₹5 lakh on equipment, ₹2 lakh before opening and ₹15 lakh on opening stock, with a ₹6 lakh deposit. Running costs are ₹2 lakh rent, ₹1.8 lakh staff and ₹60,000 other costs, so ₹4.4 lakh a month, plus a ₹50,000 head office share. Gross margin is 35% and other variable costs 4%, leaving a 31% contribution margin. The store is expected to reach ₹18 lakh a month, starting at half that and reaching full sales in month 7. - Store-level break-even: ₹4.4 lakh / 31% = about **₹14.2 lakh a month**, or ₹47,300 a day. - Company-level break-even: ₹4.9 lakh / 31% = about **₹15.8 lakh a month**. - Mature store profit: ₹18 lakh x 31% minus ₹4.4 lakh = **₹1.18 lakh a month** (₹68,000 after the head office share). - Payback on ₹37 lakh: **40 months**. Peak cash needed, including the deposit: about **₹46.7 lakh**. Now change one thing at a time. Negotiating rent down to ₹1.6 lakh brings payback to 30 months. Opening with ₹10 lakh of stock instead of ₹15 lakh brings it to 36 months. Because mature profit is a thin slice of sales, small changes in rent, staffing or margin move payback by many months. ## Before opening store 3, 10 and 25 ### Store 3: prove the model - Know the real contribution margin and payback of stores 1 and 2, not just their sales. - Write down the opening stock list and the replenishment routine so the new store does not depend on the owner's memory. - Move every store onto the same billing and inventory system so you can compare them on equal terms. ### Store 10: make it repeatable - Have a standard opening budget and a standard ramp-up target, and review every new store against them at month 3 and month 6. - Send stock from a central warehouse or a nominated hub store, with transfers recorded and checked on receipt (see the [delivery challan generator](delivery-challan-generator.html)). - Set prices and promotions centrally and give store managers a daily sales and stock report. - Track head office cost per store so company-level break-even is a real number, not a guess. ### Store 25: protect the cash - Plan openings so the peak cash needs of several new stores do not land in the same quarter. - Set a rule for closing or relocating stores that stay below store-level break-even after the ramp-up period. - Watch stock days by store; slow stores tie up the cash that should fund the next opening. - Check each new state for extra GST registration and compliance work before you sign the lease. For the operational side of an opening (timeline, stock allocation, pricing consistency), read our [new store opening checklist for Indian retail chains](https://commmerce.com/blog/new-store-opening-checklist-indian-retail-chains/). For where chains lose money as they grow, see [State of Indian Multi-Store Retail](https://commmerce.com/state-of-indian-multi-store-retail/). ## Frequently asked questions What is a good payback period for a new retail store in India? There is no single benchmark that fits every format, city and rent level, and old published figures rarely match today's costs. Set a target that your cash and lenders can carry, then use this calculator to see which levers (rent, staffing, margin, opening stock) bring your own numbers inside it. Many chains judge each new outlet against the payback of their existing stores. Should I count the rent deposit in payback? A refundable deposit comes back when you leave, so it is not a cost, but it is cash tied up for years. The calculator leaves it out of payback by default and shows it in peak cash needed. Tick the box if you want payback to include it. Is opening stock an investment or a cost? Opening stock is working capital. It is not lost, but the cash is locked on the shelves until it sells and is replaced, and a new store usually needs a full range before sales justify it. That is why it is part of the money to recover and of peak cash needed. Should sales include GST? No. Enter sales excluding GST. GST collected is not your income, and including it overstates both sales and margin. Why is company-level break-even higher than store-level? Every new store adds a share of head office cost: buying, accounts, area managers, warehouse and software. A store can cover its own rent and staff and still not pay its share of the centre. Store-level break-even tells you if the outlet stands on its own; company-level tells you if it adds to group profit. How many months should I allow for ramp-up? It depends on location, format and how well known your brand is in that area. Look at how your last few openings ramped from the first month to a steady month and use that. If this is your first expansion, test a slower ramp and see whether you can still fund the gap. ### Compare every store on the same numbers Commmerce gives you one inventory view across every branch and warehouse, with stock transfers between them and a full movement history, so each new store is measured the same way as the rest. [See multi-store retail](https://commmerce.com/multi-store-retail/) [Book a demo](https://commmerce.com/schedule-demo/)