Financial Strategy
About to scale, unsure the business model holds
“We are about to scale, and I am not sure the model holds.”What owners tell us
The situation
Signs you are facing this
- Expansion plans rest on a gut feel
- No break-even point for the new branch or product
- Funding needs are guessed rather than modelled
- No downside scenario
The situation
About to scale, unsure the business model holds
Driver 1
Unit economics unknown
Profit per customer or location has never been measured.
Driver 2
Hidden fixed costs
Scaling brings costs that did not exist before.
Driver 3
Single scenario
Plans assume everything goes to schedule.
- 1
Diagnose
Measure unit economics
Margin and payback per unit, customer or site.
- 2
Design
Model scenarios
Base, downside and upside with funding needs for each.
- 3
Embed
Set go / no-go tests
Milestones that decide whether to keep scaling.
- Unit economics model
- Scale scenarios with stress tests
- Capacity and funding plan
- Go or no-go checkpoints
Common questions
What is break-even analysis?
The level of sales at which revenue covers all fixed and variable costs. It shows how much a new branch or product must sell before it earns a profit.
Why model scenarios?
Because plans rarely run to schedule. Scenarios show how much cash you need if sales are slower or costs higher.
Related situations
- “We do not know which products or customers make money.”Not sure which products or customers make money
- “We price imports off the invoice, and margins keep surprising us.”Import costs and margins you cannot see
- “Revenue is up, but running the business feels harder than ever.”Revenue is up, but the business feels harder to run