business-model-auditor

Business Model Auditor - Scale Stress Test

Overview

Executes a business model stress test using Alex Hormozi's scale and leverage principles, identifying fatal flaws before they kill the business. Exposes bottlenecks, calculates unit economics, and surfaces design-for-scale recommendations.

Hormozi's Core Principle: "A business model is only as good as its constraints. Can this scale without me?"

The Framework: The Scale Test

Key Questions:

1. Time Independence: Does revenue require YOUR time linearly?
2. Unit Economics: Does each customer generate more than they cost?
3. Bottleneck Clarity: What breaks first at 10x scale?
4. Leverage Type: Are you building assets or just working?
5. Margin Integrity: Do margins hold or erode at scale?

Execution Workflow

Step 1: Current Model Mapping

Ask the user:

Describe your business model:

1. How do you make money? (What do customers pay for?)
2. What's your average revenue per customer?
3. How much does it cost to acquire a customer?
4. How much does it cost to deliver what they bought?
5. How many hours do YOU spend per customer?

Model Summary Template:

Metric	Current	Formula
Revenue/Customer	$X	Price × Units
CAC	$X	Marketing Spend / New Customers
Delivery Cost	$X	Direct costs per customer
Gross Margin	$X	Revenue - Delivery Cost
Your Hours/Customer	X hrs	Your time invested
Effective Hourly Rate	$X	Profit / Your Hours

Step 2: Unit Economics Deep Dive

Calculate the fundamental health:

Core Unit Economics:

Revenue Per Customer: $___
- Cost of Acquisition (CAC): $___
- Cost to Deliver: $___
= Gross Profit: $___
/ Your Hours: ___
= Effective Hourly Rate: $___

Health Check:

Metric	Bad	Okay	Good	Great
LTV:CAC Ratio	<1:1	1-2:1	3-5:1	>5:1
Gross Margin	<30%	30-50%	50-70%	>70%
Effective Hourly	<$50	$50-150	$150-500	>$500
Payback Period	>12mo	6-12mo	3-6mo	<3mo

Step 3: Time Dependency Analysis

Ask the user:

How does your time relate to revenue?

1. If you took a month off, what would happen to revenue?
2. What % of delivery requires YOUR specific involvement?
3. What tasks ONLY you can do?
4. What tasks could be delegated?
5. What tasks could be eliminated?

Time Dependency Score:

Scenario	Score	Meaning
Business stops if you stop	1/10	Totally dependent
Revenue drops 50%+	3/10	Highly dependent
Revenue drops 20-50%	5/10	Moderately dependent
Revenue drops <20%	7/10	Low dependency
Revenue unaffected	9/10	Time independent
Revenue grows without you	10/10	True leverage

Step 4: The 10x Stress Test

What happens if you 10x customers tomorrow?

1. What breaks first? (Delivery, support, quality, YOU)
2. What would you need to handle 10x? (People, systems, tools)
3. What would your margins look like at 10x?
4. How would customer experience change?
5. What's the actual capacity limit right now?

Bottleneck Categories:

Bottleneck	Symptom	Fix Type
You (Founder)	Can't do more yourself	Delegate/automate
Team	Need more people	Hire/outsource
Systems	Manual processes break	Automate/systemize
Capital	Can't fund growth	Improve margins/fundraise
Market	Not enough demand	Expand TAM/pivot

Step 5: Leverage Audit

Four Types of Leverage:

Leverage Type	Description	Example	Scale Factor
Labor	Other people's time	Employees, contractors	Linear
Capital	Other people's money	Invest to grow	Variable
Code	Software/automation	SaaS, tools	Infinite
Media	Content/audience	YouTube, podcasts	Infinite

Assess your current leverage:

1. Are you using labor leverage? (Team multiplies your output)
2. Are you using capital leverage? (Money working for you)
3. Are you using code leverage? (Software scales infinitely)
4. Are you using media leverage? (Content works while you sleep)

Leverage Score:

• 0 types = Trading time for money
• 1 type = Some leverage
• 2+ types = Real leverage
• 3+ types = Highly leveraged

Step 6: Model Stress Points

Identify where the model will break:

Stress Point Mapping:

Scale Level	What Breaks	Why	Fix Required
2x current	[First break]	[Cause]	[Solution]
5x current	[Second break]	[Cause]	[Solution]
10x current	[Third break]	[Cause]	[Solution]
100x current	[Ultimate break]	[Cause]	[Solution]

Step 7: Fix Recommendations

For each bottleneck:

Priority Framework:

1. First: Fix the lowest-cost, highest-impact bottleneck
2. Second: Fix what directly impacts revenue
3. Third: Fix what impacts margin
4. Fourth: Fix what impacts customer experience

Output Format

See assets/output-template.md for the full structured report template (load when generating the audit deliverable).

Quick Scale Score (100-Point Assessment)

For fast validation without the full audit:

Dimension	Weight	What It Measures
Time Independence	2x	Can it run without you?
Unit Economics	2x	Do the numbers work at scale?
Bottleneck Clarity	1.5x	Do you know what's constraining?
Leverage Active	1x	How many leverage types?
Delivery Scalability	1.5x	Can you deliver 10x without 10x cost?
Margin Integrity	1x	Do margins hold at scale?

Score	Rating	Verdict
85-100	Scale-Ready	Pour fuel on fire
70-84	Strong Foundation	Fix weak points first
55-69	Fixable	Address constraints first
40-54	Risky	Major issues to fix
0-39	Broken Model	Rebuild fundamentals

The "Would I Hire Me?" Test

Ask yourself:

"If this business had to pay me a salary for the work I do, would the economics still work?"

If revenue - your salary - all other costs < 20% margin, the model is too dependent on your free/cheap labor.

Model Evolution Paths

From Service to Productized Service:

• Package your service into fixed-scope, fixed-price offerings
• Create processes that others can execute
• Build systems that don't require your judgment

From Productized Service to SaaS:

• Identify the repeatable, automatable parts
• Build software to replace manual delivery
• Keep humans for high-value touchpoints only

From 1:1 to 1:Many:

• Group coaching instead of individual
• Courses instead of consulting
• Templates instead of custom work

Integration with Other Skills

Skill	How It Works Together
pricing-strategist	Price for healthy unit economics
offer-architect	Design offers that scale
retention-engine	Improve LTV in the equation
constraint-eliminator	Remove delivery bottlenecks
execution-accelerator	Move on fixes faster

Common Mistakes to Avoid

1. Ignoring your time cost: Counting "profit" without valuing your hours
2. Hoping margins improve: They usually get worse at scale without action
3. Hiring to fix bottlenecks: Sometimes the fix is automation or elimination
4. Scaling before fixing: 10x a broken model = 10x the problems
5. Complexity creep: Adding services that don't scale
6. Vanity revenue: Growing revenue while margins shrink

The Founder Replacement Test

Could someone else run this business at 80% effectiveness if you left for 6 months?

• If yes: You have a business
• If no: You have a job you created for yourself

When to Route Elsewhere

• If the problem is the offer → offer-architect
• If the problem is pricing → pricing-strategist
• If the problem is not enough leads → lead-channel-optimizer
• If you're stuck on what to fix first → execution-accelerator