financial-unit-economics

# Financial Unit Economics

## Table of Contents
- [Purpose](#purpose)
- [When to Use](#when-to-use)
- [What Is It?](#what-is-it)
- [Workflow](#workflow)
- [Common Patterns](#common-patterns)
- [Guardrails](#guardrails)
- [Quick Reference](#quick-reference)

## Purpose

Financial Unit Economics analyzes the profitability of individual units (customers, products, transactions) to determine if a business model is viable and scalable. This skill guides you through calculating key metrics (CAC, LTV, contribution margin), interpreting ratios, conducting cohort analysis, and making data-driven decisions about pricing, marketing spend, and growth strategy.

## When to Use

Use this skill when:

- **Business model validation**: Determine if startup/new product can be profitable at scale
- **Pricing decisions**: Set prices based on target margins and customer economics
- **Marketing spend**: Assess ROI of acquisition channels, optimize CAC
- **Growth strategy**: Decide when to scale (raise funding, increase spend) based on unit economics
- **Product roadmap**: Prioritize features that improve retention or reduce churn (increase LTV)
- **Investor pitch**: Demonstrate business model viability with CAC, LTV, payback metrics
- **Channel optimization**: Compare profitability across customer segments or acquisition channels
- **Subscription models**: Analyze recurring revenue, churn, cohort retention curves
- **Marketplace economics**: Model take rate, supply/demand side economics, liquidity
- **Financial planning**: Forecast cash flow, runway, burn rate based on unit economics

Trigger phrases: "unit economics", "CAC/LTV", "customer acquisition cost", "lifetime value", "contribution margin", "payback period", "customer profitability", "break-even", "cohort analysis", "is this business viable?"

## What Is It?

**Financial Unit Economics** is the practice of measuring profitability at the most granular level (per customer, product, or transaction) to understand if revenue from a s