The document presents a detailed margin audit of Summit Business Coaching, an online coaching business generating about $840k annually with a small team (owner, one coach, a VA, and a sales setter). It walks through six steps: (1) the current financial snapshot showing $70k monthly revenue, $28k ad spend, $6.3k net profit (9% net margin); (2) delivery‑only margins for each offer (1:1 coaching, group program, self‑paced course) which appear strong; (3) the addition of customer acquisition cost (CAC) of roughly $2,333 per new client, revealing that the self‑paced course loses money while the other offers remain profitable; (4) identification of four profit leaks – excessive ad spend, a loss‑making front‑end product, underpriced group program, and the owner delivering the highest‑value service; (5) four strategic decisions to fix the leaks – stop paid traffic to the course, raise the group price by 20%, track CAC by individual offer, and shift the owner out of delivery; and (6) a projected financial impact showing net profit rising to about $17k per month (24% net margin) with the same team and lower ad spend. The audit concludes with key observations about the importance of integrating CAC into margin analysis and not being misled by high gross‑margin figures alone.
Topics
Financial Snapshot: Revenue, Costs, and Net Margin
Presents the current monthly revenue ($70k), delivery costs, overheads, ad spend, owner pay, and resulting net profit of $6,300 (9% net margin).
Delivery‑Only Margin Analysis by Offer
Breaks down each product (1:1 coaching, group program, self‑paced course) showing price, delivery cost, and gross delivery margin (77%, 92.6%, 97%).
Impact of Customer Acquisition Cost on Offer Economics
Calculates CAC (~$2,333) from ad spend and shows how adding CAC changes profitability: 1:1 coaching remains highly profitable, group program is workable, and the course loses $833 per sale.
Identified Profit Leaks in the Business Model
Lists four key leaks: high ad‑spend share, loss‑making front‑end product, underpriced group program, and owner delivering the highest‑value offer.
Strategic Decisions to Close the Leaks
Recommends stopping paid traffic to the course, raising group price by 20%, tracking CAC per offer, and moving the owner out of delivery to free up sales capacity.
Projected Financial Impact of Implemented Changes
Quantifies monthly profit increase (+$10,700) and net margin rise to ~24%, with same team and reduced ad spend, plus break‑even client loss analysis.