Fix the comparison boundary before calculating
Records and assumptions to align
- Define one promised outcome, delivery cycle and included support boundary. (not complete)
- Separate live delivery, preparation, onboarding, marking/review, community and follow-up hours. (not complete)
- Reconcile collected revenue, refunds, payment/platform charges and direct materials. (not complete)
- Allocate only acquisition/onboarding cost attributable to the same enrolment cohort. (not complete)
- Keep instructor capacity, group-size limits and minimum viable enrolment explicit. (not complete)
| Field | Required unit | Preferred evidence |
|---|---|---|
| retained cohort revenue | CU/cohort or cycle | payment/refund record or labelled enrolment scenario |
| total delivery/support hours | hours/cycle | delivery design and time record |
| attributable acquisition/support costs | CU/cycle | campaign, contractor and support records |
Build a reproducible scenario
offer contribution = retained cohort revenue - delivery labour value - platform/payment - direct materials - attributable acquisition/support costs; contribution per delivery hour = offer contribution ÷ total delivery/support hours
- retained cohort revenue
- Collected revenue less refunds/credits inside the cycle (CU/cohort or cycle) — payment/refund record or labelled enrolment scenario
- total delivery/support hours
- Live, preparation, onboarding, review and included support time (hours/cycle) — delivery design and time record
- attributable acquisition/support costs
- Only costs aligned to the same learners and cycle (CU/cycle) — campaign, contractor and support records
Do not value instructor time at zero or divide by unlimited future cohorts. Reusable assets need a declared amortisation policy, not a fictional lifetime.
Fictional matched-outcome cycle
Each format targets the same learning outcome; enrolment and hours are invented scenarios.
| Case | Declared inputs | Substitution | Result |
|---|---|---|---|
| 1:1 | 4 clients × 900; 48 delivery/support hours; 60 CU/hour labour; 300 other costs | 3,600 - 2,880 - 300 | 420 CU contribution |
| Small group | 10 learners × 450; 36 hours; 60 CU/hour; 700 other costs | 4,500 - 2,160 - 700 | 1,640 CU contribution |
| Cohort | 20 learners × 300; 55 hours; 60 CU/hour; 1,500 other costs | 6,000 - 3,300 - 1,500 | 1,200 CU contribution |
Stress-test the uncertain inputs
| Variable | Lower case | Higher case | What it tests |
|---|---|---|---|
| Paid enrolment | Minimum viable case | Capacity-limited case | Tests cohort operating leverage |
| Support hours | Designed boundary holds | Downside learner-support case | Tests hidden labour |
| Refund/credit share | Observed lower case | Explicit downside case | Tests retained revenue and cash |
Stop and review when
- Formats promise materially different outcomes but are treated as substitutes. (not complete)
- Preparation/support time or refunds are omitted. (not complete)
- A larger cohort exceeds the support or delivery constraint. (not complete)
Turn the scenario into a controlled decision
- Reconcile the baseline to current records and name the evidence owner.
- Run the base case, then change one uncertain input at a time.
- Record the chosen response, approval limit, review date and stop trigger.
- Compare actual results with the original boundary before reusing the assumption.
Avoid these mistakes
- Calling cohort revenue scalable while valuing delivery time at zero. (not complete)
- Comparing price per learner without total contribution and workload. (not complete)
- Using an unsupported completion or conversion rate. (not complete)
Questions to resolve before approval
- Are cohorts always more profitable than 1:1 coaching?
- No. Enrolment, support, acquisition, refund and delivery design determine the scenario.
- Can reusable course material be ignored after creation?
- No. Declare how creation/update cost is treated and refresh the assumption when the asset changes.
Methodology and source boundary
- Service Rate & Quote methodology — Margin101: Product-owned delivery-hour and service-cost boundary.
- Break-even Sales methodology — Margin101: Product-owned contribution and whole-enrolment break-even boundary.
- Capacity-Constrained Profit Mix methodology — Margin101: Product-owned delivery-capacity comparison.