Unit Economics Truth
Scale durability begins with per-unit profitability. If individual transactions lose money, scaling multiplies losses. Start with the Unit Economics evaluator. Learn more about Unit Economics Truth.
Scale & Profit Durability
Evaluates whether profitability strengthens or degrades as the business scales. It determines whether growth improves economics or introduces fragility through cost leakage, concentration risk, or illusory operating leverage. Only observed cost and margin behaviour is evaluated.
Evaluators assess observed scale behaviour only. Intended improvements or future plans score zero.
Why profit durability determines real business value
Growth is not inherently positive. Revenue can double while margins collapse if cost structures fail to scale efficiently, if profit concentrates around a single customer or channel, or if operating leverage proves illusory. Many businesses discover this only after committing to scale — when the damage is structural and difficult to reverse.
This evaluator tests whether the economics of the business genuinely improve with scale or whether growth introduces hidden fragility that undermines the viability of the entire operation.
Typical flow
- 1Stress-test margins under adverse scenarios
- 2Assess cost control authority
- 3Identify profit concentration risk
- 4Observe margin behaviour under scale
- 5Validate operating leverage reality
Evaluation scope
THIS EVALUATOR DECIDES
- Whether margins compound or erode at scale
- Whether profit survives pricing, demand, or cost shocks
- Whether costs are controlled or merely tolerated
- Whether operating leverage is real, delayed, or illusory
THIS EVALUATOR DOES NOT DO
- Design scale strategy
- Recommend expansion paths
- Optimise organisational structure
- Justify growth narratives
Evidence requirements
- Observed margin behaviour across volume changes
- Evidence of cost control authority
- Revenue, customer, or channel concentration data
- Separation of fixed vs disguised variable costs
- Missing scale evidence scores zero
How missing evidence is generated
If required evidence is missing, ProfitBooks uses controlled operators to generate it.
Operators generate evidence. They do not decide fit.
Operators
Durability & Resilience Stress
Establishes whether profit survives pricing pressure, demand shocks, and cost stress by stress-testing unit economics under adverse scenarios.
Run operatorCost Control Authority
Establishes whether the business genuinely controls its key cost drivers or whether margins exist without operational authority.
Run operatorProfit Concentration & Control
Establishes whether profit is concentrated, dependent, or exposed to single points of failure across customers, products, or channels.
Run operatorMargin Behaviour Under Scale
Establishes whether unit margins improve, remain flat, or degrade as volume increases based solely on observed cost behaviour.
Run operatorOperating Leverage Reality
Establishes whether operating leverage is real, delayed, or illusory by separating truly fixed costs from disguised variable costs.
Run operatorEvaluator contract: This evaluator assesses durability under scale. Growth intent does not alter outcomes.
Related Assessments
Final Verdict Generator
After evaluating all three dimensions, the Final Verdict Generator synthesises outcomes into a single PASS, CONDITIONAL, or FAIL verdict. Learn more about Final Verdict Generator.
FROM THE KNOWLEDGE BASE
When profit depends on founder effort, scale is an illusion. This article explains how to identify and diagnose founder dependency. Read: The Founder Dependency Trap.