subscription business model calculator

Forecast your recurring growth. Calculate MRR, ARR, and the impact of churn on your subscription-based business or membership site.

Revenue Growth Forecaster

Current Base

Number of active subscribers you have today.
Average revenue per user per month.
$

Growth & Retention

How many new subscribers you acquire each month.
Percentage of customers who cancel each month.
%
1 Month 12 Months 60 Months

Projected MRR

$0.00

Annual Recurring Revenue (ARR): $0.00

Total Revenue

$0.00

Cumulative

Final Subs

0

Active Users

Customer Lifetime Value (LTV) $0.00

Based on your churn rate, each customer is worth $0.00 over their lifetime.

Mastering Your Subscription Business Model

The subscription economy has transformed how we build businesses. From SaaS platforms to niche membership sites, the ability to generate predictable, recurring income is the ultimate goal for modern entrepreneurs. However, managing a subscription business requires more than just a great product; it requires a deep understanding of financial metrics. Our subscription business model calculator is designed to give you clarity on your growth trajectory by analyzing the interplay between acquisition, pricing, and retention.

Why MRR and ARR are the Lifeblood of Your Business

Monthly Recurring Revenue (MRR) is the single most important metric for any subscription service. It represents the "normalized" monthly revenue that you can reliably expect. Unlike one-time sales, MRR allows for long-term planning and investment. When you scale MRR, you naturally scale your Annual Recurring Revenue (ARR), which is often the primary metric used by investors to value a company. Using a recurring payments forecaster helps you visualize how small changes in your monthly growth can lead to massive shifts in your yearly valuation.

The Silent Growth Killer: Churn Rate

You can spend thousands on marketing, but if your customers leave as fast as they join, your business will plateau. This is known as the "leaky bucket" problem. Churn rate measures the percentage of subscribers who cancel their service each month. A 5% churn might seem small, but over a year, it can erode nearly half of your customer base. Our sub income calculator factors in this decay, showing you the "Net Growth"—the actual number of subscribers you keep after accounting for those who leave.

Calculating Customer Lifetime Value (LTV)

Understanding your LTV is crucial for determining your marketing budget. If a customer pays $30/month and stays for an average of 10 months, their LTV is $300. If your cost to acquire that customer (CAC) is $100, you have a healthy business. However, if your churn is high and the LTV drops below your CAC, you are losing money on every new signup. This tool helps you find the "sweet spot" where your pricing and retention strategies align for maximum profitability.

Strategies to Scale Your Subscription Revenue

  • Reduce Churn: Focus on customer success and engagement to keep users active longer.
  • Optimize Pricing: Small increases in ARPU (Average Revenue Per User) can have a compounding effect on MRR.
  • Upsell and Cross-sell: Offer premium tiers or add-ons to increase the value of existing accounts.
  • Monitor ROI: Use our ROI Calculator to ensure your acquisition spend is generating profit.

By using this subscription revenue calculator regularly, you can perform "what-if" scenarios. What if you lowered churn by 1%? What if you increased your monthly price by $5? These insights allow you to make data-driven decisions rather than relying on intuition.

Subscription Forecasting – FAQ

For established SaaS companies, a monthly churn rate of 3-5% is considered average, while 1-2% is excellent. For B2C or newer startups, churn can often be higher (10%+) as they find product-market fit.

Simply multiply your current MRR by 12. This gives you the Annual Recurring Revenue, assuming your subscriber base stays the same for the next year.

To calculate for annual plans, divide the annual price by 12 to get the monthly equivalent (ARPU) and enter that into the "Monthly Price" field. This ensures your MRR and growth forecasts remain accurate.

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