EVALUATOR

Unit Economics Truth

Does one customer create real contribution — or hide loss behind aggregation?

If one unit loses money, growth compounds the damage.

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PASS

Unit creates durable contribution

Confidence: High confidence
Evidence: Evidence complete
Risk: Low

Economic foundation is stable under current assumptions

Next step: Proceed with controlled scale decisions

CONDITIONAL

Contribution unclear under variance

Confidence: Moderate confidence
Evidence: Evidence incomplete
Risk: Moderate

Growth decisions carry unresolved financial risk

Next step: Close evidence gaps before scaling

FAIL

One unit destroys value

Confidence: High confidence
Evidence: Evidence indicates structural failure
Risk: High

Scale will amplify economic fragility

Next step: Stop scale and repair the failing layer

This evaluator tests

Contribution margin
Founder labour reality
Revenue quality
Cost visibility

This evaluator does not do

Pricing strategy
Margin optimisation
Cost reduction tactics
Narrative justification

Define the unit

Force one atomic unit so blended economics cannot hide failure.

Establish realised revenue

Strip discounts, refunds, credits, and non-cash adjustments.

Decompose variable cost

Price all delivery, support, infrastructure, and founder labour.

Stress-test contribution

Check whether margin survives realistic best and worst variance.

Re-evaluate under variance

Confirm the unit remains auditable and repeatable under deviation.

Tools

Operator stack

Margin Variance Stress

Stress-tests contribution margin across observed best and worst variance.

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Unit Definition Hardening

Forces one atomic unit so blended economics cannot pass.

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Net Realised Revenue Evidence

Strips discounts, credits, refunds, and non-cash adjustments from revenue.

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Founder Labour Reality

Prices founder labour per unit at market rates.

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True Variable Cost Decomposition

Builds a complete, auditable breakdown of direct unit costs.

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PROFITBOOKS SYSTEM

Unit Economics → Cash → Profit

If one breaks, everything above misleads

If you lose money per customer, growth makes it worse

If margins are hidden, your business model is unclear

If contribution isn’t positive, you do not have a business

If one unit does not create value, scale will deepen the loss.

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Related tools

Cash Reality & Runway

After unit economics, test whether cash timing lets the business survive. Review Cash Reality & Runway.

Scale & Profit Durability

After margin is proven, test whether it survives scale and complexity. Review Scale & Profit Durability.

From the knowledge base

Read the failure pattern behind silent margin erosion. Read: Why Unit Economics Break Before Growth Stalls.