Unit Economics Analysis

• See gross margin, not just revenue, by product, sales model, and market.
• Build cost assumptions on top of your existing revenue model, with no duplicate data entry.
• Understand which cost drivers move margin most, with Monte Carlo and sensitivity analysis.
• Feed clean cost-of-goods figures straight into your full P&L and discounted-cash-flow forecast.

• Define per-unit costs for each production unit, sales model, and market model.
• Cost drivers tie costs to the right volume basis automatically.
• Monte Carlo simulation and sensitivity analysis on margin.
• Waterfall, trend, and distribution views.
• Two-factor sensitivity grids for deeper what-if analysis.

1. Start from your revenue model. Make sure the Market Sizing Tool is populated.
2. Add production costs. Define per-unit costs for what you make.
3. Add sales-model and market costs. Layer in costs that vary by how you sell and which market you serve.
4. Run the analysis. Growth Forge expands the cost assumptions across your forecast and computes gross margin.
5. (Optional) Go deeper. Use sensitivity grids to test how two cost factors interact.
6. Evaluate the evidence for the product-class- and stage-specific evaluation criteria this tool influences, feeding your Strategy Evaluation.

What is Unit Economics in Growth Forge?

It's the tool for modeling per-unit cost and gross margin on top of your revenue forecast. Rather than a standalone cost sheet, it layers cost assumptions over your Market Sizing model, so you see profitability by product, sales model, and market, with the same uncertainty and analytics as the revenue side.

How do I model unit economics or gross margin for a new product or business?

Add per-unit costs for what you make, then layer in costs that vary by how you sell and which market you serve. Growth Forge expands those assumptions across your whole forecast and computes gross margin, so you can see where the business is actually profitable, not just where it's big.

Do I have to re-enter my revenue model?

No, Unit Economics builds directly on the Market Sizing Tool, so units, pricing, and volumes flow through automatically and your costs attach to the right drivers.

What if my costs vary by product, sales model, or market segment?

Costs can be driven by production unit, sales model, and market model, or by more sophisticated logic, and can include direct expenses, headcount expenses, and even capital depreciation, so the margin picture reflects how your costs really behave.

How do I know which costs matter most to margin?

Monte Carlo simulation shows the range of margin outcomes, and sensitivity analysis (including two-factor grids) ranks which cost drivers move margin most, so you focus on the assumptions worth validating.

What about operating expenses, and what does it connect to?

Operating expenses live in Expense Planning; Unit Economics covers cost of goods and gross margin. It draws on the Market Sizing Tool and feeds Expense Planning and your full P&L; its cost evidence also contributes to your Strategy Evaluation.