QUESTION: Business finance: how to plan budget and unit economics?

Competent budget planning and a deep understanding of unit economics allow a company to scale sales without the risk of losing all financial resources. For budgeting to be useful rather than turning into a formality, it is necessary to detail the profile of the ideal client, their financial capabilities, main pain points, and purchase triggers. Understanding how much it costs to acquire a single client and what value they bring throughout their entire lifecycle makes marketing and operational budgets as accurate and effective as possible.

Calculating unit economics is the starting point for any financial planning, as it answers the question of whether the business makes a profit from selling a single unit of a product or acquiring a single user. To do this, it is necessary to compare the customer acquisition cost with their lifetime value, as well as take into account all direct costs for production and delivery of the product. If the economics converge at the level of an individual unit, the company can proceed to active scaling and increasing advertising budgets.

The process of forming the budget for the next period should be based on historical business data and forecasts of key growth metrics. The company management should draw up several scenarios of events, including pessimistic, baseline, and optimistic ones, to be ready for any market changes. The budget must be flexible so that if key indicators drop, it is possible to quickly cut expenses on non-priority areas and preserve the core of the business.