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Unit Economics

Revenue and cost analysis per unit (customer, transaction, or order). Determines if your business model is fundamentally profitable.

Syntax

business-and-strategy
// Per-customer profitability = LTV - CAC - Cost to Serve

Example

business-and-strategy
// Example: B2B SaaS product

// Revenue per customer
ARPU = $99/month = $1,188/year
Avg customer lifetime = 3 years
LTV = $1,188 × 3 = $3,564

// Cost to acquire
Monthly marketing spend = $10,000
New customers/month = 50
CAC = $10,000 / 50 = $200

// Cost to serve (annual)
Hosting + support + CS = $300/customer/year
Total cost to serve over lifetime = $900

// Unit economics
Gross profit per customer = $3,564 - $200 - $900 = $2,464
Payback period = CAC / (ARPU × gross margin)
             = $200 / ($99 × 0.8) = 2.5 months ✓

// Healthy: LTV:CAC > 3:1, Payback < 12 months