Chapter 1 –
Overview of Unit Economics
Unit Economics Gives You The Unfiltered Reality If Your Business Is Intrinsically Profitable
In this FREE chapter download, we get introduced to the importance of unit economics and the simple understanding of revenue minus variable costs. There are many ways to slice and dice your business (by customer, product line, geography, etc.) and all of those are acceptable methods of analysis.
The point of this chapter is to familiarize you with the power that you achieve as a business leader when you grasp the levers that drive your profitability. We end the chapter with a short exercise to have you begin assessing your own unit model.
This chapter will provide perspectives on:
- Simple unit economic model calculation
- Why unit economics are an important area for investor evaluation
- Why you cannot scale an unprofitable business
Out of this chapter, I want you to be thinking about:
- What is your “unit” in the business that will give you the most insight?
- Are you set up as a business to understand your unit economics?
- How you might begin to use unit economics to answer some important business questions.
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