---
name: pricing-and-unit-economics
description: "Use when pricing products, calculating break-even, projecting monthly sales, evaluating revenue goals, spending, cash flow, taxes or profitability."
---

# Pricing and unit economics

Make every input sourced and every unit clear: Verified, Estimate, Hypothesis or Unknown. Default accounting currency USD; use exchange rates with date only when required. No unverified income promise.

## Core model
Define *one sale* and *one period*. For physical or service hybrid, include delivery and founder hours. For digital, include realistic refunds, payment/platform processing charges, fees, support time, acquisition, fulfillment and any applicable taxes.

Net sale price P = amount recognized per order excluding any pass-through tax, under explicit assumption.
Variable cost C = payment processing + delivery + refunds/returns allowance + acquisition allocated per order + marginal support/services.
Contribution = P-C. Monthly operating profit = accepted orders x contribution - monthly fixed costs. If contribution > 0, break-even orders = ceil(monthly fixed costs / contribution). If not, explain which lever needs to change.

Model cap: monthly orders cannot exceed reachable prospects x realistic conversion OR founder capacity after sales/admin, whichever is lower. Separate one-time buyer orders and recurring revenue; avoid assuming retention.

## Outputs
- Startup cash schedule, fixed and variable costs (count once), price, gross sales, contribution, operating profit, founder hours, customer acquisition costs.
- Downside, base, upside using *ranges* for order volume and conversion; estimate working cash need from worst cumulative deficit.
- Taxes/VAT/sales taxes, platform availability and founder pay as explicit assumptions until legal status verified; **profit is not personal take-home**.
- Price/volume combinations necessary for user goal stated income goal monthly and whether the under-5h weekly cap makes them realistic.
- Sensitivity for two largest unknowns (normally conversion and acquisition), and simple threshold for stopping paid promotion.
- Separate hypothetical projections from observed sales and cite all market fee/rate numbers to current primary sources.

Prefer a transparent spreadsheet users can edit over black-box revenue scores. Use calculators rather than unverified forecasts.