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Business model · Explore, Plan

Unit economics teardown

Works out whether a single unit of business actually makes money once everything is counted. The answer at scale is the same as the answer for one, which is why growth does not fix a broken unit.

The printable canvas and the handoff into Claude Code are part of a paid plan. See what a plan includes. It needs the Claude desktop app on this machine, and your team and the prompt library already installed in that project — we cannot see your disk, so open it there.

Stage
02 Explore, 04 Plan
Works at
Business, Department
Maturity
Early startup → Large organisation
Time
A day if the cost data exists; a week if it does not

What it is

An examination of the economics of a single unit of business — one customer, order or site — to establish whether the model works before scale amplifies it. Growth multiplies unit economics; it does not repair them.

The unit
What one of the thing is. Everything depends on this definition being consistent and honest.
Revenue per unit
What one actually generates, net of discount, returns and credit notes. Realised, not list.
Variable cost per unit
Everything that scales with volume: delivery, support, payment processing, warranty, servicing, refunds.
Contribution margin
Revenue less variable cost. What each additional unit contributes to fixed costs and profit. Negative here means growth accelerates losses.
Customer acquisition cost
Fully loaded cost to win one: marketing, sales effort, onboarding, acquisition discounting.
Payback period
How long the contribution takes to repay acquisition cost. Determines how much growth you can fund from operations.
Lifetime value
Contribution times expected lifetime. Entirely dependent on the retention assumption, which should be shown rather than embedded.
The mistake people makeCost of support is the line most often omitted and most often decisive, because it does not sit in cost of sales and nobody owns allocating it. If support cost per customer is unknown, the teardown is incomplete and should say so.
What it’s forGrowth is not turning into profit and you need to know whether the unit works at all.
What it’s not forYou have no reliable cost allocation. Garbage in, confident garbage out.

How you run it

  1. Define the unit preciselyA customer, an order, a site, a subscription. The definition determines every number that follows and is where most teardowns go wrong.
  2. Build revenue per unit properlyInclude the discounting and returns that actually happen, not list price. The gap between the two is often the whole finding.
  3. Allocate variable costs honestlyEverything that scales with the unit: delivery, support, payment fees, warranty, servicing. Support cost per customer is the one most often left out.
  4. Calculate acquisition cost fully loadedMarketing, sales time, onboarding, discounting to win. Then payback: how long before the unit has repaid what it cost to acquire.
  5. Expose the retention assumptionLifetime value is retention with arithmetic on top. Show the assumed lifetime explicitly — it is where optimism concentrates.

The prompt

Two ways to run it

Run this tool in your own Claude

The short prompt starts your partner against the library on your disk. The long one carries everything with it and needs nothing installed.

🔒 Prompt locked

Everything above is free — what this tool is, what it is for, what it is not for, and how to run it as a workshop. Three tool prompts a month are free with an account; beyond three, and for the printable canvas, it is the paid part.

See plans — from £19 a month

Your playbook

It lands in the earliest stage this tool suits. Move it on the Playbook page.

You’ll need

  • A defensible definition of a unit
  • Revenue and cost allocated to it, including the awkward ones
  • Retention or repeat data

You’ll end up with

  • Contribution margin per unit
  • Acquisition cost and payback period
  • Lifetime value, with the retention assumption exposed

Runs well with

Acquisition screen and synergy thesisAdjacency mapAI operating model optionsAI opportunity map