Subscription-Based B2C SaaS Financial Model

Overview: Subscription-Based B2C SaaS Financial Model

Featuring specific SaaS metrics you can track (MRR, ARR, ARPU, CAC, LTV, Churn rates, and more), users can easily navigate the model with all input fields highlighted in blue font. These models are designed to be the perfect financial tool for business owners to use to make company decisions. They also give investors a snapshot of the business’s current performance and forecasts.

General Assumptions

Starts with basic model questions on the start date of the model, tax rate assumption, working capital assumptions, and funding assumptions.

Revenue Assumptions

Revenue assumptions are the anticipated factors that drive a company’s income generation over a specific period. These assumptions form the basis for financial projections and are crucial for planning and decision-making. In our model, we have included detailed inputs on # of users, estimated monthly growth rate in users, assumed annual churn rate %, subscriber breakdown in different tier levels, tiered subscription fees offered, and direct costs, including customer acquisition costs.

Operating Expenses Assumptions

Operating expense assumptions are typically based on historical data, industry benchmarks, market trends, and management’s judgment. They are crucial for estimating the business’s total cost and determining profitability. Like revenue assumptions, it’s essential to regularly review and adjust operating expense assumptions to reflect changes in the business environment and ensure the accuracy of financial forecasts. Our model includes detailed inputs on Staff Costs (Management, Development Team, Customer Service Team, Sales Team, Other) and typical software-related Operational Expenditure items. However, you can add any other expenses relevant to your business to this sheet.

Capex Assumptions

Capital expenditure (Capex) assumptions refer to the anticipated investments a company plans to make in long-term assets, such as property, plant, equipment, and technology, over a specific period. These assumptions are crucial for financial planning, budgeting, and forecasting, impacting the company’s cash flow, profitability, and growth prospects. We have included a fixed asset cost assumption schedule here for the main items likely to be on a company’s capex sheet and a use of funds assumption list with a corresponding pie chart.

Monthly Projections

We have broken down projections on a month-by-month basis when projecting income statements, balance sheets, and cash flow statements. The monthly forecast is provided over a 5-year time frame. This is particularly useful for businesses looking at month-on-month trends and insights, which leads to better decision-making and budgeting should there be a need to raise more capital, pursue growth opportunities from excess capital, or pay down interest-bearing debt. Monthly projections also help a business ascertain seasonal performance when looking at growth projections on a month-over-previous-years-month basis.

Annual Projections

The model has Annualized Financial Projections of Income Statement, Balance Sheet, and Cash Flow Statement over 5 years. Annual projections provide an excellent overview of expected revenues, expenses, profits, cash flow, and other key financial metrics for the upcoming year. Annual predictions are essential for any company’s strategic planning, budgeting, fundraising, and performance evaluation at any stage of its business cycle.

SaaS & Other Metrics

SaaS-specific metrics (MRR, ARR, CAC, CLTV, ACS, ARPU, Churn rate, Retention Rate), Profitability Ratios, Liquidity Ratios, and Asset Turnover Ratios are provided.

Summary of Financial Statements

Summarized Financial Statements over a 5-year time frame help for better snapshots of financial performance. Income Statement, Balance Sheet, and Cash Flow Statement are all provided.

Charts

SaaS specific Charts available, including customer growth Over Time, Profitability Margins (Gross Profit Margin, EBITDA Margin, and Net Profit Margin), Revenue vs Direct cost projections

DCF Valuation

We have included a Discounted Cash Flow (DCF) Valuation model showing the Business’s Net Present Value (NPV) based on a series of growth rates and assumptions. Weighted Average Cost of Capital Assumptions include Risk-Free rate, Beta, Risk Premium, and Equity Risk Premium. A DCF valuation is a method used to estimate the value of an investment, business, or asset by discounting its expected future cash flows to present value. It is based on the principle that the value of an investment is determined by the present value of its future cash flows. The DCF valuation technique is widely used in finance, investment analysis, and corporate finance for making investment decisions, determining the fair value of securities, and evaluating the worth of businesses.

Depreciation Schedule

The detailed depreciation schedule shows additions/disposals to the business’ fixed asset register. Sections included Computer Equipment, Furniture & Fittings, and Others.

Debt Schedule

Debt schedule provided with interest rate assumptions and payback period assumptions included.

Equity Schedule

Equity schedule provided with assumptions on all investments into the business by investors or owners.