How to Set Up a Subscription Business in Three Simple Steps
May 12, 2017
As an entrepreneur, you will want to do whatever gives your venture the greatest chance of success, and this means choosing a business model that complements not only your product, but your goals going forwards.
For some people, the best bet for achieving this will be to build a subscription business. Gaining an increasing following within the UK, such enterprises can prove to be incredibly lucrative, and they’re pretty easy to set up too.
So what exactly are they? The clue is in the name, as this guide from TNT does a great job of elucidating. Essentially, they are companies where customers pay a set subscription fee (usually on a monthly basis), and are sent products by you in return, a prime example being Birchbox.
Want to know how to set one up for yourself? Then read on…
Step #1: Choose a Product
Before you decide to set up a subscription business, you’ll need to think long and hard about the product/s you’re hoping to sell. Although this is not a hard and fast rule for success, most entrepreneurs prefer to choose something that they’re passionate about, whether this is beauty paraphernalia, knitting materials and patterns, or presents for people’s pets.
Step #2: Create a Business Plan
Once you know what your product is, you need a business plan to help you build your venture. This should include a lot of very detailed information and calculations, from how much each box will cost to put together to subscription rates, delivery fees, and estimated growth. You may also wish to record:
- Your suppliers
- Your investors
- The subscription options that will be available to your customers
- Your predicted profit margins
- A marketing strategy
- Future expansion plans.
Step #3: Plan Your Deliveries
Your boxes may be truly brilliant, but they’re little good to you until they’re delivered to your customers, so you’ll need to choose a reliable and reputable courier to help you. How the recipients perceive the service they receive will largely be based on their experience with this company, so you must select one that makes sure your goods arrive on time, in perfect condition, and with their packaging intact.
With these three essential foundations in place, you have the potential to build a successful subscription business. Be bold, be brave, and don’t be afraid to give it a go today; there’s a whole world out there waiting to see what you can bring to the table.