Define the unit before calculating the margin
Patient can mean an intake applicant, a person assessed by a clinician, a first fulfilled order or someone who remains active for several months. Those are different denominators. For a founder dashboard, start with a completed, paid and fulfilled order over a stated period, and separately record the costs of applicants who never reach that stage.
Define first-order contribution as net first-order revenue minus attributable variable costs. Define renewal contribution the same way for renewal orders. Name the metric precisely in the spreadsheet. A gross margin based only on product cost answers a narrower question than a contribution calculation that also includes clinician, payment and variable support costs.
Build net revenue and cost from the same transactions
Use customer charges less discounts, refunds and lost disputed amounts, applying your accountant's treatment of taxes and pass-through collections. Match each cost to the same set of orders. A refunded order may still have costs: Stripe states that its original processing fees are not returned on a refund. Other processors and negotiated arrangements must be checked separately.
Ask vendors what triggers their fees. Some expenses follow an intake, an encounter or a shipment rather than a paid order. Add those failed-path expenses to the acquisition cohort they belong to. If ten applicants incur a fee and only six become fulfilled customers, dividing those fees by ten understates the burden carried by the six customers.
Source context: Stripe: Refund and cancel payments
Use a labeled example to test the spreadsheet
Hypothetical assumptions only: a cohort produces 100 first fulfilled orders, $30,000 in charges, $1,000 in discounts and $1,000 in refunds or lost disputes. Net revenue is $28,000. Suppose fulfillment costs $12,000, clinical services $3,000, processing and dispute fees $1,000, and attributable variable support $2,000. Total variable cost is $18,000.
Contribution before acquisition is $10,000 for the cohort, or $100 per first fulfilled order. The contribution margin percentage is $10,000 ÷ $28,000 = 35.7%. If cohort acquisition costs another $15,000, contribution after acquisition is −$5,000, or −$50 per first fulfilled order. None of these values represents a provider quote, client result or expected telehealth outcome.
Keep acquisition costs and fixed overhead explicit
Report media-only acquisition cost and a broader acquisition figure separately. The broader figure can include attributable creative work, agency services and sales labor when those are part of your chosen definition. Use the same definition across periods. Do not divide this month's media spend by customers attributed to last month's campaign and call it a cohort cost.
Then subtract overhead to assess operating results. Fixed platform minimums, founder compensation and recurring administrative services still need funding even when contribution is positive. The SBA's break-even formula divides fixed costs by contribution per unit. For a business with different first-order and renewal margins, use the expected mix and show the assumptions rather than applying one margin to every order.
Source context: SBA: Startup costs and break-even analysis
Measure renewal contribution over observed periods
Build a cohort table with month zero, month one and later completed renewals. Record contribution earned to date and compare it with acquisition costs. Label future renewals as forecast. If a cohort has existed for only six weeks, its twelve-month contribution is not observed lifetime value.
Set an observation window that matches your cash plan and compare cohorts at equal ages. Include cancellation, failed payment and changing service costs. Use acquisition measurement to agree attribution definitions and cash-flow planning to distinguish a favorable margin from cash that has reached the bank. Clinical decisions remain independent of a founder's target margin.
Contribution margin bridge
Use one cohort, a consistent cutoff date and a stated unit. The formulas below are a planning framework; reconcile accounting treatment with your accountant.
On small screens, scroll the table sideways to view every column.
| Metric | Formula or input | Keep visible |
|---|---|---|
| Net revenue | Charges − discounts − refunds − lost disputed amounts | Avoid subtracting the same reversal twice |
| Variable cost | Attributable fulfillment + clinical + payment + variable support | Include incurred costs for failed paths |
| Contribution before acquisition | Net revenue − variable cost | Divide by the defined completed units |
| Contribution after acquisition | Contribution before acquisition − cohort acquisition costs | Show media-only and broader definitions |
| Operating result | Total period contribution after acquisition − fixed overhead | Do not confuse this with bank cash |
Before you move forward
- State the unit, cohort, observation window and accounting treatment.
- Use vendor invoices to confirm when fees are incurred.
- Reconcile refunds and disputes without double counting.
- Separate first-order economics from renewal economics.
- Mark future contribution as forecast and compare cohorts at equal ages.
Sources and scope
Source check: October 10, 2026. Primary sources support the rules and vendor descriptions cited above. Worksheets are original planning tools, not provider commitments or forecasts. Requirements can change; confirm current terms for your program.
- Stripe: Refund and cancel payments
Checked October 10, 2026. Stripe documents that original processing fees are not returned with refunds. This is a Stripe-specific example.
- SBA: Startup costs and break-even analysis
Checked October 10, 2026. Its current destination contains the break-even section and fixed costs divided by unit contribution formula.