Saas Revenue Model

The saas revenue model is one where a customer pays a periodic subscription fee for the use of centrally hosted software and support instead of purchasing the software outright.

Saas stands for software as a service and has grown as a business model over the past few years due to the availability of cloud computing.

This saas revenue model spreadsheet provides a quick and easy method to estimate revenue generated by a saas subscription model for the next 5 years. The revenue forecast generated can be used as starting point for our Financial Projections Template for inclusion in a saas business plan.

Using the Saas Revenue Model Spreadsheet

The Excel saas revenue model template, available for download below, calculates the annual revenue to be used in a saas business model by entering details as follows:

saas revenue model v 1.0

Customers

  • Enter the monthly churn rate for each year. This is the rate at which customers are lost each month.

    For example, if the churn rate entered under the heading year one is 3%, then for each month of year one 3% of the customers at the start of the month will be lost by the end of the month.

  • Enter the customer additions for month 1. To start the saas model calculations, an estimate of the number of new customers (additions) for month 1 is required.
  • Enter the customer monthly growth rate for each year. This is the rate at which new customer additions grow each month.

    For example, if the customer growth rate entered under the heading year 1 is 5%, then for each month of year 1 the new customer additions will grow by 5% of the previous month additions.

  • Enter the opening number of customers. Enter the number of paying customers that the saas business has at the start of year 1. For a new business this will be zero.

For each of the five years the sass revenue model spreadsheet calculates the number of customers at the start of the year, the number which were lost during the year, the new customers which were added during the year, and finally the number of customers at the end of the year.

It should be noted that although the customer numbers are summarized and shown on an annual basis, they are in fact calculated by the saas revenue model spreadsheet on a monthly basis.

Revenue

  • Enter the monthly subscription fee. For each year enter the average monthly subscription fee paid by the customer for the use of the software. If more than one subscription fee is charged, a weighted average should be used.

Using the subscription fee, the saas revenue template calculates the annual revenue based on the number of paying customers at the end of each month for each of the following five years.

Saas Revenue Model Spreadsheet Download

The saas subscription model template is available for download in Excel format by following the link below.

The saas revenue model forecast produced by this template can be used as the starting point for our Financial Projections Template, as part of a saas sales model business plan.

Notes and major health warnings
Users use the saas turnover model financial projection template to generate sales projections at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of saas startup revenue model that you might use when considering how to a build saas software service business model and internet business models. It is purely illustrative of a saas business model.  This is not intended to reflect general standards or targets for any particular company or sector. If you do spot a mistake in this saas business model example, please let us know and we will try to fix it.
Last modified April 12th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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