Decisions, Money & Entrepreneurship
Costs, Revenue, And Unit Economics
This lesson helps students understand costs, revenue, profit, and break-even. They practise checking whether a simple business idea can work financially.
What you will learn
- Understand the difference between fixed costs and costs that change with each sale.
- Explain how price and number of sales create revenue.
- Estimate what one customer may cost and be worth to a business.
- Create a one-page Unit Economics Sheet for a simple business idea.
What happens in this lesson
Chapter 1: Fixed And Variable Costs
Understand the difference between costs that stay roughly constant no matter what and costs that rise and fall with each sale.
What you make: A saved cost split note listing at least three fixed costs and three variable costs for a familiar small business.
Chapter 2: Revenue Is Not One Number
Understand that revenue is the result of price multiplied by volume, and that most real businesses have several different revenue streams at once.
What you make: A saved revenue note listing at least two separate revenue streams for a familiar small business with their rough share of total revenue.
Chapter 3: What One Customer Is Worth
Learn to estimate the lifetime value and acquisition cost of one customer and use the two numbers together to judge whether a business can grow sustainably.
What you make: A saved customer economics note with a rough lifetime value, a rough acquisition cost, and the ratio between them for one familiar small business.
Chapter 4: Unit Economics Sheet
Create a one-page Unit Economics Sheet for a simple business idea.
What you make: A saved Unit Economics Sheet for a real small business showing fixed costs, variable costs, contribution margin per sale, LTV, CAC, and a one line verdict on sustainability.
Chapter 5: Unit Economics Under Pressure
Evaluate two or more growth options for a small business by comparing how each one changes fixed costs, variable costs, customer economics, and break-even risk.
What you make: A saved decision memo recommending the best growth option for a real small business, with a short unit economics justification.
Key terms in this lesson
Break-Even
The point where total money in equals total money out. Below it you lose money; above it you start to keep some.
Cash Flow
The actual money moving in and out of an account each month. Different from profit, and what bills get paid from.
Margin
The part of each sale you keep after paying the costs of making the sale. Usually shown as a percentage.
Profit
Profit is the money you have left after paying for everything it cost to earn it.
Revenue
The total money a business takes in from selling things, before any costs come out.
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