Product with a Subscription Addon Forecasting Model

Description
Recent Upgrades: Added Income Statement, Balance Sheet, Cash Flow statement monthly and annual output reports as well as a formal cap table, dynamic inventory purchasing schedule, capex schedule, and better formatting conventions.

Let's start with defining Product+Service Subscription. It means you re-sell or manufacture a product and along with selling that product and earning margins therein, you offer a subscription service addon. You can plan out all kinds of strategies for this such as trying to simply break-even on the product sales but building up a lucrative subscription service revenue stream and then adjusting assumptions over time to become profitable in both streams.

This model gives you the ability to tweak and tinker with all kinds of assumptions around the manufacturing and sales of units as well as the on-boarding of paid subscribers that are converted directly by using the product you are selling. The best examples of this are probably the console gaming industry and workout equipment. 

Both sell you something and then offer a monthly or yearly subscription service that enhances the thing you bought. You can still use the product without signing up, but there is more value to the customer when signing up.

The reason this is important is because margins for subscription revenues are nearly always higher than retail sales or buying and re-selling something. Once you acquire and grow a subscriber pool, it also has network effects that help you sell more of your product and grow organically.

I have included advanced metrics in this that you would normally see in your typical SaaS business models such as CaC, CaC payback, LTV to CaC ratio, and month to pay back CaC. All of those metrics are still relevant with the PaaS model.

There are assumptions for the amount of debt and equity that is taken on and the resulting distributions to investors / owners based on a defined % share of the company that is given up for the investor money. 

You can plan on having 100% owner cash contributions without investors and no debt or any combination that you would like to see.

For forecasting unit sales and the resulting subscriber conversions, you can define the % of yearly unit sales that happen in each month of the year over 5 years as well as the % of total produced units that actually sell across 5 years.

There is an assumption for exit valuation, discounted cash flow analysis, and IRR metrics for the project, investors, and owners.

This template is also included in two bundles:
- All Models Bundle: https://www.eloquens.com/tool/P8Y4TX4v/finance/financial-forecasting-models/financial-models-120-useful-and-usable-logic
- SaaS / Subscription Models: https://www.eloquens.com/tool/wmyQI0eE/finance/venture-capital/the-complete-venture-capital-bundle