Money4 min read
Unit economics and break-even
Know what you earn on each sale and when you'll cover your costs.
Unit economics answers a simple question: do you make money on each customer?
Key numbers
- Price per sale: what the customer pays.
- Variable cost per sale: materials, payment fees, shipping, or contractor time for that sale.
- Contribution margin: price minus variable cost. This pays for everything else.
- Fixed monthly costs: software, insurance, rent, and other costs that don't change with sales.
- Customer acquisition cost (CAC): what you spend in marketing to win one customer.
Break-even
Break-even sales per month = fixed monthly costs ÷ contribution margin per sale.
Example: $1,000 fixed costs and $50 margin per sale means 20 sales a month to break even.
Healthy signs
- Positive margin on every sale.
- A customer's lifetime value is at least 3× what it costs to acquire them.
- A break-even point you can realistically reach within your timeline.