Monetisation · Margin structure · Component
The scale model
How margin behaves as volume grows — whether it improves, holds, or quietly deteriorates.
The deliverable
What it is
Growth improves margin only where costs are genuinely fixed. Where the cost base scales with volume, growth multiplies revenue and cost together and changes very little.
The costs that break plans are step costs — the additional facility, the next tier of system, the manager who becomes necessary at forty people. They arrive suddenly and were not in the line.
One level in
What it is made of
Each element is a constituent part of the component. Follow one to see the attributes it carries.
The cost split
Which costs are fixed, which vary with volume, and which do neither.
3 attributes: Cost behaviour · Amount · Driver
LearnThe step points
The volumes at which a new fixed cost becomes necessary.
3 attributes: Volume threshold · Step size · What steps
LearnThe trajectory
The direction margin is actually moving as the organisation grows.
3 attributes: Margin · Period · Direction
Learn
Step costs are knowable in advance and are almost never in the model. Find yours before growth finds them for you.
The other components in margin structure
The cost to serve model
What it actually costs to deliver to a given customer or segment, including the costs that are usually averaged away.
LearnThe contribution analysis
What each customer, product or segment contributes after its own costs — the view that decides where to put effort.
Learn