| Selling Price (per unit) | — |
| Variable Cost (per unit) | — |
| Gross Profit (per unit) | — |
| Gross Margin % | — |
| Contribution Margin (per unit) | — |
| Contribution Margin % | — |
| Break-Even Units / Month | — |
| Break-Even Revenue / Month | — |
What is the difference between gross margin and contribution margin?
Gross margin = (Selling price - COGS) ÷ Selling price. It measures production efficiency. Contribution margin = (Selling price - all variable costs) ÷ Selling price. It measures how much each sale contributes toward covering fixed costs and profit. For most African SMEs without complex overhead allocation, these will be similar.
What LTV/CAC ratio is healthy?
A ratio above 3:1 is considered healthy for most businesses — meaning you earn 3x what you spend to acquire a customer. SaaS businesses typically target 4:1 or higher. If your LTV/CAC is below 1:1, you are losing money on each customer and your business model needs adjustment. African markets often have higher CAC due to lower digital trust but longer customer retention once trust is established.
What gross margin should I target in Nigeria?
It varies widely: Tech/SaaS 60–80%, retail products 30–50%, food & beverages 40–60%, fashion 50–70%, logistics/delivery 20–35%. Nigerian SMEs typically see compressed margins due to forex volatility on imported inputs. Track your margins monthly and adjust pricing accordingly.