Online Camp Financial Model based on SAAS business model
SAAS-based financial model that incorporates KPI metrics, for web-based application that will act as an online camp for kids and counselors.
Globally, there are thousands of options in terms of what type and what style of camp parents choose to send their children to. Thus, there are a lot of choices when it comes to selecting a camp arranged for kids at physical locations, but there is no platform for conducting this kind of activity online. My client came up with this unique idea of developing a web-based application that will act as an online camp for kids and counselors. They wanted to establish an online business by developing a website that offers learning opportunities to kids all across the world. The client shared their business idea with us and asked for a viable Online Camp Financial Model.
The client had a very unique idea, but they were not able to support the idea financially. So they wanted to raise funds from investors by pitching the idea to investors through developing a financial model that incorporated financial projections with key assumptions and expectations. The client wanted us to develop a SAAS based business model that incorporated SAAS KPI metrics, business valuation, and capitalization summary. They wanted the financial model to be flexible enough to incorporate any changes in the assumptions in the future.
FINANCIAL SOLUTION
Any business idea has to be evaluated thoroughly first for its profitability and capability to generate adequate returns before committing substantial investment. The client idea, in this case, was primarily a SAAS based business model.
We developed an online camp financial model for the client that included multiple assumptions such as:
- Number of freemium members
- Counselor hours spent per course
- Number of paid members
- Number of conversions from freemium to paid members
- Paid members’ churn, etc.
The online camp financial model we developed for the client included the following sections.
The dashboard included the following sections:
- Seasonality. You can manually input seasonality for Kid Club.
- Cohort. You can see monthly acquired members based on seasonality and average monthly growth rate.
Revenue can be estimated simply by multiplying the price for a specific number of subscriptions by products.
Server Scaling Section
The number of servers for free Kid Club can be estimated by dividing subscriptions with seasonality for Kid Club retained by server limit up to per one server. In this way, we will have number of servers required for free subscribers.
Counselor Hours Scaling Free Kid Club Section
Camps/Courses Counselor hours are estimated by multiplying subscriptions with seasonality. [Counselor hours for Camp/Course X Students per coding/private course]
SERVERS Section
Servers’ quantity for other courses are estimated by dividing subscriptions minus Kid Club free access courses subscriptions by per server limit.
Total servers are estimated by adding servers’ quantity for paid courses and servers’ quantity for free courses.
Counselor Hours Section
Camps/Courses Counselor hours are estimated by multiplying subscriptions with Seasonality Camps/Courses. [Counselor hours for Camp/Course with Students per coding/private course]
Marketing Costs Section
Marketing Costs are estimated by multiplying acquired members per month with marketing (blended average cost per acquisition).
The expenses assumptions sheet is one of the key ingredients in every Financial Model. The figures presented in this online camp financial model for the online camp were based on various assumptions for the results to stand true.
Assumptions were related to the following key variables:
- Core staff costs;
- Server subscriptions;
- Marketing professional services;
- Total head count fixed cost;
- Shopify/Pay Pal commission per transaction;
- Other.
We made a business valuation for the client because it’s easier to raise funds when you know how much your company costs. We calculated net present value of this business based on the fifth year of work.
The Summary Report is a consolidation of predictive indicators for the next eight years after the website launch. It describes assumptions about revenue and cash flow. The consolidated balance sheet provides easy decision-making about the idea for the client.
As can be seen, we’ve built a comprehensive online camp financial model for the kids online camp. Finally, we thoroughly analyzed this topic and became immersed into it to find all possible scenarios of this business development.
Do you still have any questions about financial modeling? Ask us here or in comments!
Originally published at new.finmodelslab.com.
