Financial Model for Subscription Box Businesses

 This financial model template was built specifically for the nuances and unit economics that are involved in a subscription box business. The general business model is based on subscribers that pay a regular monthly fee in return for one or multiple monthly deliveries of something in a box. The 'box' is often curated collections of products, often tailored to specific interests or themes. 

$125.00 USD

After purchase, the template will be immediately available to download. This is also included in the SaaS financial models bundle.

subscription box

Template Features (logic configuration):

  • Up to 6 advertising acquisition channels driven by various spend and cost per acquisition input.
  • Organic customer acquisition driven by monthly traffic and conversion rates.
  • Monthly pricing for up to 6 subscription levels.
  • Each subscription level has its own input for retention over time.
  • Also, there is a promotion configuration for each level (i.e., % of total price paid in month 1,2,3, etc..) to account for "first month free" or other discount offers for new customers.
  • Total costs per month per customer input for each pricing level.
  • Robust fixed cost schedule for operation costs such as managers, rent, and other costs required to operate the business that are not directly tied to the subscription box delivery. Each cost item has a 'start month' selection as well.
  • Offset for inventory purchases (based on frequency purchased).
  • Model for up to 72 months
Output Reports
  • Monthly and annual financial statement reports (integrated 3-statement model)
  • Monthly and annual pro forma detail that drives down to EBITDA and cash flow as well as KPIs.
  • KPIs include average CaC, LTV, LTV to CaC, monthly churn, ARR, average revenue per account, and more.
  • Annual executive summary
  • DCF Analysis and IRR
The main purpose of this template is to let the user input their own assumptions and then a financial projection will automatically display based on those assumptions. One of the primary things being solved for is the minimum equity required so that the business can continue to operate with a positive cash position. This is the investment requirement, and it is based on initial startup costs, capex, and net operating burn over time.

The monthly pro forma detail will show the periodic cash in and out, which is a primary source that all sorts of different cash flow analysis can be based on.

I included the option to take on debt and the resulting configurations for that will populate accordingly as well as the option to include an exit value. The exit value is based on a multiple of trailing 12-month subscription revenue.

Retention Logic:

For each subscription pricing tier, there is a contract term as well as the percentage of customers that are retained over the life of each monthly cohort of new customers added per tier. The user can define retention curves that are exponential decay, linear, or whatever best fits their expected customer retention data.

To calculate revenue, the model assumes each customer pays their monthly subscription price each month no matter if their term is 12 months or 1 month. So, if a customer signed a 12-month contract, they pay the price per month for that respective tier for 12 months.


Performing various financial feasibility studies with this model can be insightful. The user can adjust various pricing levels, costs per customer per month, ad spend / CPA, traffic / conversions, and see what variables result in the greatest financial impact as well as what could happen in worst-case, base-case, and best-case scenarios.

Benefits of Starting a Subscription Box Business

  • Recurring Revenue Stream: One of the most attractive features of subscription businesses is the predictable and consistent revenue stream they provide. Subscribers pay regularly, often monthly, allowing the company to forecast revenue and manage cash flows more effectively.
  • Customer Retention: Subscription models encourage longer-term relationships with customers, fostering loyalty and often leading to a higher lifetime value per customer.
  • Inventory Management: Subscription boxes can be planned in advance, enabling companies to bulk order items, manage inventory more efficiently, and reduce overhead costs.
  • Targeted Marketing: Given the niche nature of many subscription boxes – whether they cater to beauty enthusiasts, foodies, book lovers, or pet owners – marketing campaigns can be highly targeted, making them potentially more effective and efficient.
  • Opportunities for Upselling and Cross-Selling: By understanding subscribers' preferences, companies can introduce additional products or services tailored to their audience, enhancing revenue opportunities.
  • Brand Loyalty and Community Building: Subscription companies often foster a sense of community among their subscribers, especially when they engage their audience through social media, special events, or exclusive deals. This enhances brand loyalty and word-of-mouth referrals.
  • Personalized Experience: Subscription boxes often emphasize personalization, making customers feel valued and understood, leading to better satisfaction and retention rates.
  • Potential for Collaboration: Subscription box companies often partner with other brands to curate their boxes, leading to mutually beneficial relationships where both parties gain exposure to a wider audience.
  • Tapping into the "Surprise" Element: The anticipation and excitement of receiving a mystery box every month can enhance the user experience and create a buzz around the brand.
  • Scalability: Once the business model is proven and processes are in place, scaling a subscription box company can be more straightforward compared to traditional retail models, especially if the company uses an online platform.
However, like any business venture, there are challenges to consider, such as customer churn, the constant need for product curation, and ensuring consistent value. Still, the potential benefits can make it an appealing business model for many entrepreneurs.