A Simple MRR Spreadsheet Model

Screen Shot 2018-06-15 at 2.21.51 PM.png

A buddy of mine asked for help creating a simple spreadsheet to model his startup’s Monthly Recurring Revenue (MRR) over time given various assumptions. He suggested I share it so others can check it out as well.

You can find the Google Sheet here: Simple MRR Spreadsheet Model. It lets you tinker with a few variables to estimate what your MRR will look like over the next two years. You’ll want to make a copy (File > Make a copy…) to edit it.

The variables include:

  • Monthly visitors
  • Monthly visitor growth %
  • Visitor to trial %
  • Trial to paid %
  • Average monthly revenue per customer
  • Monthly churn %

A big asterisk is that this is a very, very simple model and how your MRR actually plays out will depend on a lot of things like how long your trial period is, how your churn rate differs for new customers vs long-time ones, conversion rates and churn rates by plan, how your conversion rates changes as the quality of your traffic changes, and a lot more. That said, this should get you in the right ballpark.

One important thing to note for anyone getting into recurring revenue is the impact your growth rate and churn rate have on your bottom line. For example, if you’re not growing, churn will eventually cause your MRR to plateau.

For example, here’s a model with 0% monthly growth:

Screen Shot 2018-06-15 at 2.24.58 PM.png

And here’s the exact same model with 10% monthly growth:

Screen Shot 2018-06-15 at 2.26.56 PM.png

You can play around with it to get an idea of how different numbers impact your long term growth.

If you have any suggestions for improving it just drop a comment below or shoot me an email – thanks!

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