How to calculate if a creative project will be profitable before investing time and money
What is this course about?
A creative project can be interesting, but it can also be unprofitable. This often happens because the economics were never factored in. This course teaches you to do the math before you invest your time and money: how much it costs to acquire a client, how much they will bring in, what expenses to account for, and when the project will break even.
Students will break down their ideas piece by piece. They will define what a unit is and for what period to calculate it. They will learn how to set pricing, distinguish between variable and fixed costs, calculate LTV and CAC, assemble everything into a single model, and understand where the business is losing money. After each session, there is a tangible deliverable—a spreadsheet, a hypothesis, a conclusion, or a solution.
The course culminates in a one-page predictive model and a plan for the initial experiments you can launch immediately after completing the course.
Who is this course for?
This course is suitable for:--- Beginner creatives (designers, illustrators, photographers) who want to launch their own product or service but are unsure how to begin their financial planning.--- Students in upper-level creative programs who are developing a project and want to test its viability.--- Instructors from the School of Design and other creative programs who wish to provide students with the tools to analyze real-world projects.--- Practicing professionals who have taken initial steps but want a systematic approach to the economics of their work
Course Duration: 6 Weeks.
Total Contact Hours: 36 academic hours.
Classes are held in an asynchronous online format.
Course Prerequisites:
Basic spreadsheet skills (Excel, Google Sheets).
Having a project idea or a willingness to formulate one.
Access to the internet and the ability to work with text and spreadsheet documents.
A readiness to calculate, make mistakes, and draw conclusions.
What will students learn in this course?
Throughout this course, students will learn to:
1.
Determine the unit of measurement and planning horizon for their project.2.
Select a monetization model suitable for their product.3.
Determine pricing based on value, not just costs.4.
Calculate gross and marginal LTV.5.
Differentiate between fixed and variable costs.6.
Calculate Customer Acquisition Cost (CAC).7.
Allocate operational expenses (OPEX) per customer.8.
Build a predictive model on a single page.9.
Formulate and prioritize growth hypotheses.10.
Calculate the break-even point and safety margin.What practical assignments will students complete in this course?
Throughout the course, students will complete the following assignments:
1.
Unit and Horizon Selection: defining exactly what is being analyzed and the timeframe.2.
Monetization Map: describing the product, unit, and revenue stream.3.
Pricing Calculation: determining the floor, ceiling, and operational price with justification.4.
LTV Calculation: calculating Gross LTV and Contribution LTV for the case study.5.
Cost Allocation: distributing 20 expenses into categories and calculating the margin.6.
CAC Calculation: comparing three acquisition channels and selecting the most scalable one.7.
OPEX Calculation: distributing operational costs per client using two different methods.8.
Model Assembly: consolidating all metrics into a single table and drawing a management conclusion.9.
Hypothesis Prioritization: formulating three hypotheses and ranking them by Impact / Feasibility.10.
Break-Even Point Calculation: defining the BEP and safety margin given an increase in CAC.Final Project: a one-page predictive model + a plan for initial experiments.Thematic Lesson Plan
Quick Start and Approaches
— What is a unit and why choose it.
— Predictive vs. Retrospective Approaches: What’s the difference.
— Choosing the Planning Horizon.Practical Work: Selecting the unit and horizon for your own project.
Product, Monetization, and Pricing
— Types of monetization in creative industries.
— How product, unit, and revenue streams are connected.
— Determining price: competitive range, interviewing, economic impact.Practical Work: Monetization map and price calculation.
LTV and Cost of Goods Sold
— Gross LTV vs. Contribution LTV: formulas and examples.
— Variable, fixed, and mixed costs.
— Calculating margin.Practical Work: Calculating LTV and allocating costs.
Acquisition and Operating Expenses
— CAC: How to calculate the cost of a new customer.
— Comparing acquisition channels.
— OPEX per customer and as a percentage of revenue.Practical Work: Calculating CAC across three channels and OPEX.
Building the Model and Hypotheses
— Constructing a predictive model: from LTV to Net LTV.
— Interpreting results.
— Formulating and prioritizing growth hypotheses.Practical Work: Model construction and hypothesis prioritization.
Break-Even Point and Final Project
— CVP analysis and break-even point.
— Safety margin when CAC increases.Practical Work: Calculating BEP and scenarios.
