Core structure
- Profit equals revenue minus costs.
- Revenue can be split into price, volume, product mix, customer mix, and channels.
- Costs can be split into fixed costs, variable costs, labor, materials, marketing, operations, and overhead.
- The best next branch depends on whether the issue is shrinking revenue, rising costs, or margin compression.
How to sound case-specific
Tie the framework to the client. A restaurant profitability case might emphasize traffic,
average ticket size, food cost, labor scheduling, and rent. A software profitability case
might emphasize churn, pricing tiers, acquisition cost, support cost, and hosting cost.