Free unit economics calculator
Unit economics calculator
See what each customer-month contributes and test a change.
What growth leaves behind
Does the next customer pay their way?
Unit economics means the revenue and costs of serving one customer. Here, a unit is one active customer-month; retention connects those months into a lifetime.
Get your one-page unit economics PDF.
Email unlocks a PDF with your base case, what-if, chart, assumptions, and three levers. Download it here; your personalized PDF is not emailed and your numbers never leave this browser.
- Your base and what-if results
- Assumptions and comparison chart
- Three practical levers
Preview the result or example included in this kit
$150.00 after acquisition per customer. The modeled customer covers acquisition and leaves a contribution toward overhead. That is not net profit: check fixed costs, cash timing, and observed cohorts before scaling.
| Metric | Base | What-if |
|---|---|---|
| Contribution / customer-month | $60.00 | $60.00 |
| Contribution margin | 60.0% | 60.0% |
| Expected paid lifetime | 6.67 months | 6.67 months |
| Contribution LTV | $400.00 | $400.00 |
| Contribution LTV : CAC | 1.60x | 1.60x |
| Simple payback (no churn) | 4.17 months | 4.17 months |
| Cohort payback (with churn) | 7 months | 7 months |
| Operating breakeven customers/month | Add fixed costs | Add fixed costs |
| Applied monthly retention | 85.0% | 85.0% |
Operating breakeven covers the entered fixed costs before new-customer acquisition spending. Simple payback assumes continued payments; cohort payback includes customer loss. A zero CAC has no meaningful LTV:CAC ratio.
| Period | Base | What-if |
|---|---|---|
| 0 mo | -$250.00 | -$250.00 |
| 6 mo | -$0.86 | -$0.86 |
| 12 mo | $93.10 | $93.10 |
| 18 mo | $128.54 | $128.54 |
| 24 mo | $141.91 | $141.91 |
Three levers, ranked for your base case
- Retention +5 points: $200.00 change in contribution LTV. Fix one reason customers leave; verify with cohorts.
- Price +10%: $66.67 change in contribution LTV. Test willingness to pay before changing prices.
- Cost to serve -10%: $26.67 change in contribution LTV. Remove rework without reducing service quality.
These are separate sensitivity tests, not guaranteed gains. A price cut assumes no extra demand; a retention improvement can deepen losses when contribution is negative.
How the math works
Contribution = price − cost to serve. Expected paid months = 1 ÷ (1 − monthly retention). Contribution LTV = contribution × expected paid months; divide by CAC for LTV:CAC. Operating breakeven = fixed costs ÷ contribution, rounded up.
The first customer-month is paid. Retention stays constant forever, with no reactivation, expansion, discounting, taxes, financing, or changes in delivery cost. Near 100% retention, tiny errors create very large lifetime estimates. Use actual cohorts and a cash forecast before making commitments. General planning information, not financial advice.
Method references: SBA break-even calculation and Stripe’s SaaS model. Assumptions reviewed 2026-08-30.
The NOOB lens: Toast’s revenue mix
Nick covered Toast in The Power of Software + Payments. Using its FY2025 filing, subscription revenue of $936m less $264m of cost implies a 71.8% category gross margin; fintech’s $5,037m less $3,891m implies 22.8%. Those percentages are our calculations from Toast’s 2025 Form 10-K.
Compare that cost-of-serving lens with your contribution margin, but do not treat reported category gross margin as the same accounting measure or as a target. The filing does not establish the CAC or cohort retention this model needs, so no Toast payback or LTV:CAC is invented.
Next: track price, service cost, new customers, acquisition spend, and cohort retention in a monthly dashboard. Explore Nerd Out’s free resources.
How this tool works
Four numbers reveal contribution, payback, and lifetime value. Add overhead for operating breakeven and save the decision on one page.
- Pick an example or enter four monthly customer metrics.
- Compare your base case with a price, cost, or retention change.
- Get the PDF and download it privately in this browser.
From more revenue to better economics
How to calculate unit economics without fooling yourself
Start with one consistent unit. This calculator uses an active customer-month, including the average monthly purchases of a repeat customer. Do not mix a single job price with monthly retention or annual costs. A one-off business can use zero repeat probability, but that does not turn one-off purchases into recurring revenue.
Subtract variable cost to serve from monthly price or spend to get contribution. Include direct labor, materials, support, payment fees, and refunds consistently. Divide contribution by price for contribution margin. Fully loaded acquisition cost includes sales and marketing work, not just ad spend.
Lifetime contribution divides monthly contribution by monthly customer loss. It is a constant-retention estimate, not booked revenue or net profit. The scenario keeps acquisition cost constant and does not assume a discount attracts more customers. Test that separately.
A positive contribution does not prove the business can pay its bills. Add fixed costs for operating breakeven, and use a cash forecast for timing. Keep cohort results, assumptions, and ownership in a monthly dashboard before expanding acquisition spending.
Questions owners ask
Unit economics, explained
What is unit economics?
Unit economics is the revenue and costs associated with one unit of business, such as a customer, order, or job. This calculator uses an active customer-month and connects monthly contribution with acquisition cost and retention.
What is an example of unit economics?
In the illustrative plumber maintenance plan, $100 monthly revenue minus $40 service cost leaves $60 contribution. A $250 acquisition cost takes 4.17 months to recover if the customer stays. With 85% monthly retention, the expected cohort recovers it in month 7 instead.
Is LTV revenue or profit here?
Here LTV is expected contribution after variable service costs, before acquisition and fixed overhead. It is not revenue LTV or net profit. The ratio compares that contribution LTV with acquisition cost; zero CAC produces an undefined ratio, not an infinite success score.
What retention rate should I enter?
Use the percentage of active customers expected to pay again next month, not annual retention or revenue retention that includes upsells. The model assumes constant retention with no reactivation. A 100% rate has no finite modeled lifetime and is not accepted.
How do you calculate break-even volume?
Monthly fixed costs divided by positive contribution per active customer-month, rounded up. The optional fifth input is necessary: customer economics alone cannot establish business breakeven. This operating breakeven excludes new-customer acquisition spending, taxes, and financing.
What happens after I enter my email?
You get a one-page PDF containing the current base case, what-if, chart, assumptions, and three levers. Download it here; the personalized PDF is not emailed. You also subscribe to practical Nerd Out notes and can unsubscribe anytime. Financial inputs stay in this tab.