Unit Economics Truth

Evaluates whether the business makes money per unit — structurally, repeatably, and without hidden subsidy. It removes aggregation, averages, and narrative explanations to surface the real contribution margin of a single, clearly defined unit.

Run evaluator

Evaluators apply strict evidence definitions. Evidence that does not meet the definitions scores zero.

Why unit economics matter

Unit economics form the foundation of business viability. If a single transaction does not generate profit after accounting for all real costs — including founder labour — then scaling that transaction multiplies losses, not gains. Most businesses discover this too late because blended averages and aggregated reporting hide per-unit reality.

This evaluator forces the business to define exactly one unit, decompose every cost touching that unit, and prove that the resulting margin survives variance and stress.

Typical flow

1
Define the atomic unit
2
Establish realised revenue per unit
3
Decompose true variable costs
4
Stress-test contribution margin
5
Re-evaluate under variance

Evaluation scope

THIS EVALUATOR DECIDES

Whether a single unit is profitable after all real costs
Whether margins rely on unpaid or underpaid founder labour
Whether contribution margin survives variance and stress
Whether unit economics are auditable and repeatable

THIS EVALUATOR DOES NOT DO

Suggest pricing strategy
Recommend cost reductions
Optimise margins
Help you pass

Evidence requirements

Realised revenue, not list price
Cash-adjusted costs, not forecasts
Market-rate founder labour
Observed variance, not best-case assumptions
Missing 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

Margin Variance Stress

Stress-tests unit contribution margin across observed best- and worst-case variance to expose margin fragility under real operating conditions.

Run operator

Unit Definition Hardening

Forces a single, atomic unit definition so unit economics can be evaluated without blending, averaging, or cross-subsidy.

Run operator

Net Realised Revenue Evidence

Establishes the observed net realised revenue per unit by stripping out discounts, refunds, credits, and non-cash adjustments.

Run operator

Founder Labour Reality

Identifies and prices founder labour per unit at market rates to determine whether margins rely on underpaid or unpaid founder effort.

Run operator

True Variable Cost Decomposition

Forces a complete, auditable breakdown of all direct variable costs for a single unit.

Run operator

Evaluator contract: This evaluator applies definitions strictly. Disputes do not change scoring.

Related Assessments

Cash Reality & Runway

Once unit economics are validated, the next question is whether cash flows survive timing. The Cash Reality evaluator stress-tests runway under realistic conditions. Learn more about Cash Reality & Runway.

Scale & Profit Durability

If units are profitable, does that hold at scale? This evaluator determines whether margins compound or degrade as volume increases. Learn more about Scale & Profit Durability.

FROM THE KNOWLEDGE BASE

Understand the structural patterns that cause unit economics to silently erode while top-line metrics look healthy. Read: Why Unit Economics Break Before Growth Stalls.