Business guide

A Beginner’s Guide to Unit Economics

Use revenue, variable cost and contribution per customer or sale to understand a business model.

Choose the unit

The useful unit might be an order, customer, booking, job or product depending on the business.

Measure what comes in and goes out

Compare revenue generated by the unit with the costs that vary directly with it.

Connect to overhead

Positive unit economics still need enough scale to cover fixed costs and produce an overall profit.

ProfitMaths guides provide general educational information, not personalised accounting, tax, legal or financial advice.