When it comes to business, cash flow is king. Businesses often struggle more with keeping enough cash in the business than with actually making sales – meaning many ‘profitable’ businesses can soon hit the rocks when creditors come knocking, despite having outstanding (unpaid) sales themselves.
And this is one of the reasons why subscription models have become so effective (with over 800% growth in the model since 2014)… predictability comes from having guaranteed, repetitive monthly income. In a world where cash flow is king, subscription models are, effectively, queens – going hand in hand for business success.
So how do you actually set up a “subscription business”? And is it only really for products or can service subscription models work too?
You can set up a subscription business around almost any product, service or idea, however there are a few important steps you need to take before you’re running the next Graze box…
How to Set Up a Subscription Business
1. Think about what Customers’ actually need
This isn’t just a key point to consider when setting up a subscription business, it’s a key point to consider when setting up any business. Meeting customer needs, at an appropriate price, is the foundation of all business. It’s well worth going out and talking with a whole range of different potential customers to see if there’s a need for what you’re thinking of launching (see point 3 below!), and getting buy in before you start.
Chances are if you’re already running a successful business (either selling products or services), and are looking to turn this into a subscription model, then chances are you know what your customers need… however what’s in it for them?
2. Where’s the benefit for them?
The benefit of a subscription business to you is clear – repetitive income and guaranteed sales month after month… but how does your new business help your customers? This is such an important point before you launch a subscription business – how does it benefit your customers? It might be convenience (you’re a football club and subs can be paid automatically without worrying about forgetting cash and finding change), or it could be practical (you run a fresh bread company and your customers sometimes forget to order their weekly bread in time) – but whatever your business, the reason to make it subscription based has to be positioned as a benefit for your customer.
3. Will they actually buy it?
People vote with their feet… or more specifically their purses. Customer surveys and asking your existing clients only gets you so far when deciding if your subscription business will work – getting something up and running which asks them to part with their actual cash is the only sure-fire way to deduce whether or not your subscription business will work.
On average, consumers spend more than twice as much as they think they do: They estimated they cough up $111 a month on such services,when they actually average $237, Waterstone found in its survey of 2,500 people in May.
CNBC, Your HBO, Netflix and Spotify habits costs more than you think
This is why we built Subscribie; the world’s most simple Pay-As-You-Go Subscription Website builder… it takes less than 15 minutes to set up your fully-functioning subscription website; simply add in your products and your brand, and start taking customer orders straight away.
Get your first 6 months of Subscribie for a total of just £10, and start testing your subscription website idea today: Learn more about Subscribie
4. Great it’s live, I’m done!
No, no you’re not. You may have validated that some people will buy, but unfortunately you can’t just build it and expect them to come. Making more people aware of your service, and getting more paying customers, requires a marketing or sales strategy. You need to think of a way of actually making people aware of your business – be it social media, flyers, online ads… or even a quirky little blog post with an interesting title like this one ;-)
Find out about Subscribie and build your own Subscription Website today. For just 15 minutes of your time, and £10 for your whole first 6 months, you can test and refine your subscription business with a professional, fully customised subscription website.