Unit Economics: How to make effective decisions in business

Everyone knows that there is a unit economics and that it is extremely useful in business, IT startups study it in gas pedals, traders on marketplaces listen to courses about it. But few people in general understand what it is and how it can be used in business.

And so unit economics is a manager's tool for making managerial decisions, which allows to evaluate these decisions from the point of view of economic effect, and the evaluation is carried out through the measurement of business processes, and therefore through the effectiveness of specific people in the team.

For this purpose unit economics uses the approach of estimating contribution margin in business, where we compare the gross profit (LTV) from a scaling unit and the cost of obtaining this scaling unit from the market (LTC).