Start
Starting audit and score
A score for today’s mix of model, pricing and channels; the line where the most money leaks.
- A first unit economics table
- A list of open assumptions
Business development
Who pays, what they pay for, and what is left from each sale. We build the business model, the price and the sales channel around these three questions, and weigh partnerships and new revenue lines in the same table.
Assumptions sit in a separate list; which ones are confirmed and which are still estimates is always visible.
- Model
- Where revenue comes from: subscription, sales, commission, referral, services or a mix.
- Pricing
- Packages, trial period, discount rules; set against the alternative the customer compares you with.
- Channel
- Where customers come from and what each channel costs per customer.
- Partnerships
- With whom, on what split, and when it ends; in writing.
01.1The work in three parts
In business development the output is a list of decisions. Next to each decision sits the assumption it rests on and the measure that will confirm it.
aWhat we do
- Unit economicsI work out, line by line, the contribution margin left from one sale or one customer.
- PricingWe build package and price options around the alternative the customer has in mind.
- Channels and partnershipsWe weigh marketplace, referral, reseller and joint product options in the same table.
- Phase planFoundation, growth and scale: what “done” means for each phase and the measure for moving on.
bWhat we deliver
- A one-page business modelWho pays, for what, how often, through which channel.
- Unit economics tableAssumptions in their own column; change one and the result updates by itself.
- Pricing optionsThe reasoning and the risk behind each option.
- Partnership noteWhat is being asked for and where to stop, before going into the meeting.
cHow we measure
- Contribution marginPer customer or per order, month by month.
- Payback periodHow many months it takes to earn back the cost of winning a new customer.
- Channel shareHow revenue splits across channels; dependence on a single channel.
- Assumption listHow many assumptions are confirmed, disproved or still open.
01.2What is left of every 100 in revenue
The same five lines across five revenue models. Pick a model; the bars show, line by line, where 100 in revenue goes.
Unit economics
100 in revenue, five models
100Revenue
−14Direct cost
−3Payments and fees
−30Marketing
−11Support and operations
42Contribution margin
When it fits
The customer pays every month or every year; revenue is visible in advance.
What to watch
If winning a new customer is expensive, the first months run at a loss; the churn rate decides everything.
100Revenue
−55Direct cost
−6Payments and fees
−18Marketing
−9Support and operations
12Contribution margin
When it fits
A business selling stocked products in its own store; the margin depends on the product.
What to watch
Shipping, returns and money sitting in stock quietly eat into the contribution margin.
100Revenue
−55Direct cost
−20Payments and fees
−8Marketing
−7Support and operations
10Contribution margin
When it fits
Traffic comes from the marketplace; winning customers looks cheap.
What to watch
As commission and ad spend grow, the margin shrinks; customer data stays with the marketplace.
100Revenue
−5Direct cost
0Payments and fees
−45Marketing
−10Support and operations
40Contribution margin
When it fits
The sale happens on another site and revenue comes from commission; there is no stock and no shipping.
What to watch
Revenue depends on the channel that brings the traffic (often search); if the channel changes, so does the revenue.
100Revenue
−42Direct cost
−2Payments and fees
−10Marketing
−13Support and operations
33Contribution margin
When it fits
Revenue comes from hours worked or work delivered.
What to watch
Growing means more people; the same work has to be turned into a package that can be sold again.
Solid bar: revenue and contribution margin. Hatched bar: cost line.A made-up example; it does not belong to any client.
01.3Related packages
The three packages that most often go with business development.
Research
Competitor research
Competitors’ pricing pages, packages, channels and partnerships; dated and sourced.
- Pricing and package table
- The channel a competitor relies on
Risk
Compliance and risk review
A review of contract, data sharing and dependency risks in partnership and channel decisions.
- Dependence on a single channel
- Shared customer data
Write how the business makes money in two sentences.
Who pays and what for; those two sentences are enough for a first conversation.