How To Write A Business Plan For A Subscription Service

How To Write A Business Plan For A Subscription Service

Graze, Birchbox, Lootcrate, Hello Fresh, Fabletics, Gousto… does your company name belong alongside these? Once the domain of magazines alone, subscription services and boxes are a growing trend – consumers can now sign up to receive monthly deliveries of snacks, clothes, make-up, toys, beer, and books, to name just a few.

Subscription boxes or services can be an attractive business idea, because by their nature they offer you a regular income from your subscribers. However, it isn’t guaranteed that a customer won’t cancel their subscription – you need to continuously provide quality products that are worth the money, and make sure you have a robust business model. That’s where your business plan comes in. Here are a few questions to get you started on writing a business plan for your subscription service:


  1. What are you going to provide?

Subscription boxes usually have a specific theme, based on their target market. If your target market is runners, you might offer a subscription service that enables people to buy one or two pieces of workout clothing every month. Or you might prefer to send out many different kinds of products for runners, not just clothing – for example books, sweatbands, water bottles and healthy snacks.

Another option is to let your customers set some preferences for the products they receive. For example, if you are selling books, your customers could tell you that they would prefer to receive crime and thriller novels over romance. Would diversifying in this way still be cost-effective for you?


  1. How will you excite your customers?

If you’re offering a subscription box, the contents should excite your customers. Part of the joy of being signed up to a subscription box is the anticipation of getting a delivery and not knowing what’s inside. So regardless of whether you’re delivering food or video games, you need to deliver on your promise. That means your boxes need to live up to your customers’ expectations every time. You will need to think ahead – do you have plenty of product ideas, or will you run out of steam after the first few months?


  1. Who are your competitors?

A quick internet search brings up several different beauty boxes, so if you are thinking about entering this particular market, it will be important for you to bear in mind who your competitors are and what they are doing. A subscription box can lose the element of surprise and interest if it contains the same products as another, so your offering needs to be unique.


  1. How much is it going to cost?

In terms of costings, you will need to thinking about how much the items in the box will cost you to buy, how much postage and packaging will cost, and how much you will sell the boxes for. Existing subscription boxes are priced at anything from less than £5 to over £100, so this number will depend on what your product is and who your target market is. Make sure you factor in delivery costs as well as any other expenses you need to cover.


  1. How much will the boxes be worth?

How much value will your customers get from your boxes – will they be saving money compared to if they were to buy all of the items in the box separately? This cost saving could be a good selling point for you to promote.


  1. How many subscribers will you need?

If you are buying items in bulk for a discount, how many subscribers will you need in order to make enough profit? And what happens if someone unsubscribes – will you still be making enough money from your remaining customers to cover your costs? How much notice, if any, will customers need to give you if they would like to unsubscribe?


If you are thinking of starting (or you have already started) a business based on a subscription model, it is likely that you already know what you are going to sell and who is going to buy it. The next steps are knowing how you will keep your costings in check, researching your competitors, and understanding your risks.


If you would like some help with writing a business plan for your subscription service, get in touch with cbm. We’re expert business plan writers and we will be happy to assist you, whatever stage your business plan is currently at. Contact us using the form on the right or call 01604 420 420.

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