Business
Unit Economics
The direct revenues and costs associated with a single unit of business — typically one customer or one product. Positive unit economics (LTV > CAC) is a prerequisite for a sustainable, scalable business.
By isolating one unit of the business, unit economics reveal whether scaling will compound profit or losses. The classic health check compares customer lifetime value to acquisition cost — an LTV well above CAC signals a model that can grow sustainably.
Key Formula & Relationship
Healthy unit economics require LTV > CAC (often 3× or more)
Reviewed by the Calculover Editorial Team for mathematical and practical accuracy.
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