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Financials
Revenue streams
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Premium subscription
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User data
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Recommended products
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Advertisment
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Fee on bought products
Additional revenue streams
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Use of single articles
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Offers from newsletter
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Starting kits
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Affiliate revenues
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Crowdfunding
Hypothesis
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We believe people are willing to pay more to get access to the premium version, offering access to the whole content.
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We believe that there is the possibility to sell user data.
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We believe vendors are willing to pay for being listed higher within our searching tool.
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We believe that by allowing advertisement on our platform, we are able to generate revenues.
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We believe that we are able to generate revenues by taking a fee on the products bought through our platform.
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We believe that free users are willing to pay for single articles.
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We believe that we are able to generate revenues by promoting offers through our newsletter.
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We believe customers have a willingness to pay for starting kits.
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We believe that we are able to generate revenues by affiliate links.
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We believe that we are able to generate revenues by raising a crowdfunding campaign at a specific point in time.
Pricing strategy
There are two common fixed pricing models we would like to account for, being the cost based and value based pricing.
Cost based
Total cost: 71,121.20 €
Amount of users after year one: 9,300€
Cost per premium user: 7.65€
Then our break even price per user would 7.65€. But this also works under the assumption the we are able to gather have 9,300 paying subscribers in the end of our first year.
Value based
To benchmark the value of our service, we concluded the services of knowledge exchange, feedback by others and advertisement of new and suiting products for individual gardening spaces can be also be described by people buying gardening magazines. Considering people that are buying these magazines are really into the topic, it might be reasonable to assume they buy 2 gardening magazines per month with the average price of a Magazin being four to five euro. For that reason the willingness to pay can be defined as 10 or higher which is the reason we are performing an A/B testing about 10 and 20 euros for the premium version of our service with our landing page.
CAC and LVT
CAC:
Month of first sale
2.19
To calculate the CAC we needed to make some assumptions in order to calculate our total customers per month. With our marketing expenses we are able to generate users from the channels:
Facebook: Applying the conversion rate from our website ( 50,52% being 49 subscribers from 97 unique visitors) gives us 505.2 customers
Youtube: 10000 viewers with a conversion rate of 14% for YouTube advertisements gives us 1400 customers
Retail: 14000 flyers with 3% conversion rate for flyers gives us 420
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Amounting for 2325.2 customers per quarter and therefore 9300 customers in the end of year one.
LVT:
40€
CAC:
LVT:
Month of last sale
0.18€
80€
Initial Business Case Draft
Excel file
Initial investment: Fixed cost/ Variable cost
Capital needed and how secure
Initial investment
Secure Capital
Through the first year our business will not generate profit. So we need to secure capital to our operating expenses.
We need to secure 71.121.20€
The founders will put in 30.000€
In order to secure the remaining 41.121.20€ we will try secure seed investors, when we have our first MVP, and as well seeks capital through start-up competitions.
Validation Process
Revenue Sources & Pricing Strategy
Validation process for Revenue Sources and Pricing Strategy
Revenue Sources
Pricing Strategy
To test our hypothesis for the pricing strategy we made an A/B
testing with different prices:
CLICK HERE
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