Calculate the Unit Economics Before Scaling
Compute simple unit economics and interpret whether acquisition can scale profitably.
A SaaS workflow tool has a $120 monthly price, 70 percent gross margin, $420 paid CAC, and average customer life of 10 months. The team wants to double paid spend next month. Unit economics: contribution margin LTV, CAC, and payback The common trap is using revenue LTV or blended CAC. That makes the model look healthier by ignoring service costs or organic acquisition. Monthly contribution $120 monthly price x 70 percent gross margin = $84 monthly gross contribution. Use contribution or gross margin, not headline revenue, because variable delivery costs must be paid before acquisition spend can be recovered. Contribution…
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