Subscription business planning

Plan a physical-product subscription around the deliveries you can supply and fund. Connect the customer promise, expected charges, shipment costs, stock commitments and payment dates. Record what would make you revise the offer.

Set the plan’s purpose

Decide who will use the plan and what it must help them do. A plan for you and your staff can guide daily choices. A plan for a bank or potential investors should address what those readers need to assess, and choosing its audience sets the right level of detail.

Use the plan to set objectives, map how you will pursue them and identify risks that could affect the business.

If the business already operates, plan to step back and assess what works and what could improve. The business.gov.au business plan tool can evaluate an idea, set goals for the year ahead or keep an existing business on track.

Define the recurring promise

State who the offer serves, what arrives, how often, what customers pay and which details may change. Distinguish payment for each delivery from payment in advance for a set of deliveries. A prepaid customer may still be owed parcels when no further charge is due.

Cost an introductory discount or gift separately; the ordinary continuing shipment needs its own contribution calculation. Set sales capacity from the products and packing time you can reasonably secure.

Make recurring charges and cancellation terms clear before purchase. In the eHarmony case, the Court found that the business had failed to display the minimum total amount consumers would pay as a single price alongside statements of the monthly price.

Connect three planning views

For each shipment, calculate contribution by subtracting the relevant product and fulfilment costs, refunds and remedies from the amount attributable to that shipment.

Keep the views connected without treating them as interchangeable. An attempted charge may fail. An advance payment may arrive long before the final parcel is supplied. Positive contribution across a term does not guarantee cash for an earlier supplier deposit.

Compare revenue and costs on a consistent GST basis, and state whether the cash forecast includes GST.

Build the cash forecast period by period

Start with the opening bank balance for the first forecast period. For each later period, carry forward the previous period’s closing balance as the new opening balance, so the forecast shows how funds available to pay bills change over time.

Estimate incoming cash by considering when money is expected to arrive, not only when a sale is recorded. Previous years’ results, seasonal trends and regular income can inform estimates; incoming cash may include sales, debtor receipts, grants and tax rebates.

Estimate outgoing cash by considering the costs the business must pay and when payment falls due. Include major operating costs such as purchases, rent and rates, utilities, advertising and marketing, or accountant fees where they apply. Calculate the period’s cash balance by subtracting total outgoing payments from total incoming cash.

Calculate the closing balance by adding incoming cash to the opening balance and subtracting outgoing payments. This makes payment timing visible: a period can have substantial forecast sales while still ending with less cash if bills fall due before receipts arrive.

Show uncertainty and decision dates

Define the billing period and what counts as churn. Forecast each plan on its actual charge schedule; a quarterly plan does not renew monthly because a worksheet has monthly columns. Separate observed results from assumptions, then compare a base case with plausible changes in renewals, costs and payment timing.

For each decision, name the owner, date and evidence needed. Before ordering, check paid deliveries still owed and the supplier’s last change date. Before adding a tier, account for customers moving from an existing plan. Before ending an offer, count undelivered prepaid parcels and open remedies.

Review the plan after each relevant billing and fulfilment cycle. Replace assumptions with payment, order, cost and customer-action records, and keep earlier versions so changes remain visible.

Prepare the plan for finance decisions

If you may seek finance, make the plan show the business’s financial position clearly. Lenders and investors want to understand how much money the business currently has, how much it needs and how much it expects to make in the near future.

Keep funding estimates realistic. Extra funding can help cover unexpected costs, but the amount requested should not exceed what the business needs.

Complete the detailed business plan before writing its summary. Summarise the business, its market, its goals and what makes it different, using few words while retaining the main points.