This is a model I have been looking to quantify for quite a while now. It is the act of selling products and then up-selling a subscription service that is directly related to using that product. The best example is exercise machines that come with a monthly subscription that feeds workouts into the screen of your workout machine or some kind of app/program.
There are a lot of ways to test how you may build up a business in this way, such as getting your product as close to break-even as possible and then making all your money on the higher margin subscription services.
This model projects out for up to 5 years on a monthly and annual basis. You have control over the exit month / exit valuation as well as if you want to bring on investor equity and/or debt as well as the % of the business you are going to give up to that equity.
There is granular logic for driving the cost of manufacturing the units and how much of the yearly product you think will sell in each month over 5 years to account for seasonality.
You can then set a conversion rate on the sold units per month that sign-up for the subscription service. They will then be subject to a monthly churn rate and you can control the price per month over time as well as up to 3 separate pricing tiers and the amount of sign-ups that join each tier.
There is then expense logic where you define the start month of the expense item and the amount over 5 years as well as variable costs that work in multiple ways (% of revenue and per user).
Because it is a subscription service in part, you still have the advanced metrics like CaC, LTV, months to pay back CaC, and the LTV to CaC ratio (measures the lifetime value of a customer compared to its acquisition cost).
High level financial summaries are included as well as a distribution detail, DCF analysis, and tons of visuals.
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This is a collection of financial model templates for businesses in the Information technology Industry and its related sectors.