Subscription Box Business Plan Template
If you want to start a subscription box business or expand your current subscription box business, you need a business plan.
Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of subscription box business plans.
The following subscription box business plan template and example gives you the key elements you must include in your plan.
Subscription Box Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a new cosmetics subscription box company located in [Location]. For a monthly fee, customers can order a box of their favorite cosmetics and have them delivered right to their door. We offer multiple subscriptions to choose from. Some of our subscriptions allow customers to choose the cosmetics they want while others include top picks, recommended products, and surprises. We provide the best customer service in the industry and aim to be the #1 cosmetics subscription company in the nation in five years.
Products Served
Every month, customers will pay a fee to get a subscription box of cosmetics delivered to their door. The boxes will vary based on the month as well as the subscription that the customer signed up for. Our subscription boxes will contain a variety of products in these categories:
- Makeup
- Skincare
- Haircare
- Body care
- Fragrance
Customer Focus
[Company Name] is an online store that can ship subscription boxes anywhere in the United States. We expect much of our customer base will consist of women and individuals ages 18-35.
Management Team
[Company Name] is founded by [Founder’s Name], who has 20 years of experience in the beauty industry. She began her career as an assistant manager at a beauty supply store, where she sold thousands of products to thousands of satisfied customers. Through her work in this role, she began to develop ideas for how customers could receive a selection of ideal products in a more convenient and affordable format. This led to the creation of the subscription box model. Though she does not have experience running her own company, she will hire other employees to help her run aspects of the business she is unfamiliar with.
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- Subscription box businesses and online cosmetics companies are in high demand.
- The management team has a track record of success in the beauty business.
- The cosmetics subscription box industry is a proven business and has succeeded in communities throughout the United States.
Financial Highlights
[Company Name] is currently seeking $350,000 to launch. Specifically, these funds will be used as follows:
- Office build/lease: $100,000
- Initial inventory and supplies: $100,000
- Working capital: $150,000 to pay for marketing, salaries, and overhead costs until [Company Name] reaches break-even.
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new cosmetics subscription box company located in [Location]. For a monthly fee, customers can order a box of their favorite cosmetics and have them delivered right to their door. We offer flexible subscription options to ensure our customers get exactly what they are looking for.
One option we offer is a box of items that the customer specifically chooses. Customers can choose from a variety of categories, including makeup, skincare, hair care, and bath and body products. They can also choose the specific brands and products they want to receive. This option is perfect for customers who know exactly what they want and want to be able to customize their boxes.
We also offer mystery box subscriptions for adventurous customers who want to try something new. These boxes are filled with a variety of surprise products, curated by our team of experts. Customers never know what they’re going to get, but they’re sure to find something they love. This option is perfect for customers who are open to trying new things and who want to discover new products.
With a large inventory of products and multiple subscription options, we expect that we will become the most popular cosmetics subscription service in the country in just a few years.
[Company Name]’s History
[Founder’s Name] has spent the past year researching what it takes to establish a subscription box business. She has analyzed the costs, market, demographics, and competition. [Founder’s Name] has compiled enough information to develop her business plan to approach investors.
[Founder’s Name] incorporated [Company Name] as an S-corporation on [Date of Incorporation]. Since incorporation, [Company Name] has achieved the following milestones:
- Developed the company’s name, logo, and website at [website]
- Determined inventory and supply requirements
- Began recruiting key employees
[Company Name]’s Products/Services
Every month, customers will pay a fee to get a subscription box of cosmetics delivered to their door. The boxes will vary based on the month as well as the subscription that the customer signed up for. Our subscription boxes will contain a variety of products in these categories:
- Makeup: Foundation, concealer, powder, blush, bronzer, eyeshadow, eyeliner, mascara, lipstick, lip gloss, and nail polish.
- Skincare: Cleansers, moisturizers, toners, serums, exfoliators, masks, and eye creams.
- Haircare: Shampoos, conditioners, styling products, and hair tools.
- Body care: Body wash, lotion, scrubs, deodorant, and antiperspirant.
- Fragrance: Perfumes, colognes, and body mists.
The exact products that arrive will depend on the month and the subscription that the customer chose. Some of our subscription options allow our customers to choose the exact products that they want. Other options allow us to choose for our customers, which means the boxes will be filled with recommended products, top picks, and other surprises.
III. Industry Analysis
You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
The subscription box model has become increasingly popular in recent years. These businesses allow consumers to enjoy their favorite products on a monthly basis for a flat fee. Some subscription boxes allow the customer to choose exactly what they want (such as meal kit boxes) while others send their customers a surprise or items based on particular themes (such as Loot Crate). [Company Name] will compete with thousands of other subscription box companies, particularly those that sell cosmetics.
According to The Business Research Company, the subscription box industry was valued at $31.4 billion in 2023 and is expected to grow at a CAGR of 18.2% over the next several years. This growth is being driven by a number of factors, including:
- The convenience of receiving a curated selection of products on a regular basis.
- The ability to try new products and brands without having to commit to a full-size purchase.
- The perceived value of subscription boxes, which often offer discounts on products that would be more expensive to purchase individually.
We believe that our company will be able to capitalize on the growing demand for subscription boxes and cosmetics by offering a unique and innovative product experience. With all of these positive trends, we expect that [Company Name] will become a major competitor in the subscription box industry.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve any U.S. customers who are interested in cosmetics. We expect this customer base to primarily be young to middle-aged adults who are middle-class or affluent.
Customer Segmentation
We will primarily target the following three customer segments:
- Women: Traditionally, women purchase a majority of cosmetics in the U.S. market. We expect most of our customers to be female.
- Millennials: Millennials are a growing demographic with a strong interest in personal care products. They are also more likely to be open to trying new brands and products.
- Gen-Z: Gen-Z is a younger demographic, but they are already making a significant impact on the cosmetics market. They are more likely to be digitally savvy and value authenticity in brands.
V. Competitive Analysis
Direct & Indirect Competitors
The following establishments are major players in the subscription box industry, thus providing either direct or indirect competition for customers:
Birchbox
Birchbox is a popular subscription box service that sends customers a curated selection of beauty products each month. The company has over 1 million subscribers and has been featured in publications such as Vogue, Elle, and Cosmopolitan. Each month, Birchbox sends its customers trial sizes of premium beauty products from a wide range of top-tier brands. Due to its popularity and large customer base, we expect that Birchbox will be our biggest competitor.
Shannon’s Cosmetics
Shannon’s Cosmetics is a subscription box service that sends customers a monthly box of cosmetics samples from luxury brands. The company has over 50,000 subscribers and is promoted by several major Instagram influencers. While Shannon’s Cosmetics is a major competitor, they have the disadvantage of only providing one subscription option. Every month, all their customers receive the same products, whether they want them or not. Consumers who want more customization will find our subscription boxes more appealing.
Makeup-in-a-box
Makeup-in-a-box is a subscription box service that sends customers a monthly box of full-size makeup products. The company has over 20,000 subscribers and has been featured in several publications. The subscription model allows consumers to purchase four to six full-sized products for less than if they bought them individually. However, the subscription only delivers makeup products and customers cannot choose what items come in their box. Those looking for more customization and a wider variety of products will be more inclined to subscribe with [Company Name].
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include the following:
- Great products and subscriptions at an affordable price: The complete array of beauty products and subscriptions offered by [Company Name] nearly equals the most premium-positioned competitors. However, [Company Name] will offer these services at a much more affordable price.
- Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
- Customer-Oriented Service: We will create our subscription boxes based on customer feedback and preferences. [Company Name] plans to offer more variety and high-quality products that will keep customers coming back for more.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the company’s unique value proposition:
- Offering the best cosmetics and supplies in the industry.
- Offering a variety of subscription boxes to choose from.
- Providing excellent customer service.
Promotions Strategy
[Company Name]’s promotions strategy to reach our target market includes:
Website/SEO
[Company Name] will develop a professional website that showcases the variety of cosmetics we sell. It will also explain our subscription box model and the multiple subscription plans we provide. It will also invest in SEO so that the company’s website will appear at the top of search engine results.
Social Media
[Company Name] will create social media accounts and invest in ads on all social media platforms. The company will use targeted marketing to appeal to our target demographics.
Referrals
[Company Name] understands that the best promotion comes from satisfied customers. The company will encourage its customers to refer other individuals by providing discounts on future subscription boxes for every new customer who signs up for our service. This strategy will increase in effectiveness over time.
Special Offers
Offers and incentives are an excellent approach to bringing in new customers. The company will introduce special offers on products to attract new consumers.
Influencer Marketing
[Company Name] will partner with social media influencers to promote the company’s value proposition and variety of products.
Email Marketing
[Company Name] will maintain ongoing email communications with current customers to communicate special offers, discounts, and important updates.
Pricing Strategy
[Company Name]’s pricing will be moderate so customers feel they receive great value when purchasing its products.
VII. Operations Plan
Functional Roles
To execute [Company Name]’s business model, the company needs to perform many functions, including the following:
Administrative Functions
- Bookkeeping
- Marketing
- Hiring and training staff
- Website and social media management
- General administrative tasks
Service Functions
- Customer service
- Box up subscription orders
- Source and store supplies
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is founded by [Founder’s Name], who has 20 years of experience in the beauty industry. She began her career as an assistant manager at a beauty supply store, where she sold thousands of products to thousands of satisfied customers. Through her work in this role, she began to develop ideas for how customers could receive a selection of ideal products in a more convenient and affordable format. This led to the creation of the subscription box model.
Though she has never run a cosmetics or subscription box company herself, she has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.). She will also hire several other employees to help her manage the aspects that she is unfamiliar with.
Hiring Plan
[Founder’s Name] will serve as the President of the company. To launch the store, we need to hire the following personnel:
- Production Associates (3 to start)
- Administrative Assistants (1 to start)
- Customer Service Associates (2 to start)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the fees we charge for our subscription boxes.
The major costs for the company will be the cost of inventory, salaries of the staff, and rent for a prime location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $350,000 to launch. Specifically, these funds will be used as follows:
- Office build/lease: $100,000
- Initial inventory and supplies: $100,000
- Working capital: $150,000 to pay for marketing, salaries, and overhead costs until [Company Name] reaches break-even.
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
