Financial Model, Marketplaces, Online & IT Businesses, SaaS

10-year Financial Projections, 5-year Financial Projections, Accounting, Budget, Budgeting, Business Valuation, Cash Flow Analysis, Cash Flow Projections, Cash on Cash Yield, Cash-on-Cash Multiple, CFO, Churn, Conversion, Customer Acquisition Costs (CAC), Customer Lifetime Value, DCF Model, Discount Rate, Excel, Financial Analysis, Financial Feasibility, Financial Model, Financial Modeling, Financial Planning, Financial Projections, Financial Statements, Forecasting, Income Statement, Investment Multiple, Investor Cash Flows, Investor Presentations, IRR (Internal Rate of Return), LBO (Levered Buyout), NPV (Net Present Value), Pre Money Valuation, Private Equity, Pro-Forma, Profitability Analysis, Return on Invested Capital (ROIC), Return on Investment (ROI), Revenue Projections, Scenario Analysis, Sensitivity Analysis, Startup Financial Models, Subscribers, Subscriptions, Terminal Value, Three Statement Model | Three Financial Statements

Video Overview:

This model does a great job at using best-in-practice customer retention logic for subscription tiers that may have varying contract terms, as well as marketplace users that may stick around based on an average retention curve.

All subscription onboarding will be assumed to use the marketplace and subject to the marketplace activity drivers, and separate drivers exist for both types of users.

The template will work if you just want to forecast a subscription business without a marketplace, a marketplace without subscribers, or a marketplace with subscription tiers. The marketplace activity configurations can be driven separately for subscribers vs. non-subscribers. There is flexibility in how ad spending and acquisition happens for the subscribers vs. non-subscriber marketplace users as well as a few assumptions for how non-subscribers can move over to being subscribers.

All the fancy KPI calculations are shows that you would typically see in a SaaS business, such as CaC, LTV, LTV:CAC ratio, CAC payback period, and churn rates. General output reports include monthly and annual financial statements, a DCF Analysis, and an annual Executive Summary. Plenty of visuals are shown as well so the narrative can be explained more clearly.

For the subscribers, there are configurations for change in contract value at renewal and pricing adjustments over the 5-year period. Also, if you collect all the cash up front for contracts that last longer than a month, you can account for that with a yes/no selector. If ‘no’ is selected, the contract value is amortized over the life of the contract, and if ‘yes’, then the full cash is collected upfront and shows on the statement of cash flows accordingly.

In general, you can define the percentage of subscribers and non-subscribers that transact each month, their average transaction value, the average amount of times they transact, and the marketplace fees charged. One strategy you can implement is making the fees smaller for subscribers.

The template comes blank, and you can fill it out along with the video so it is easy to understand. All light yellow cells are editable. Enjoy this robust financial simulation!