About this template

This templates help you calculate your Unit Economics. It takes into account the factors needed to understand if your Life T

Instructions
Black numbers are calculated. DON'T CHANGE THESE
Blue number are input numbers, FILL THESE
Green numbers are fetched from other sheets. DON'T CHANGE THESE
Black numbers on green background are read from other sheets. DON'T CHANGE THESE
Blue numbers on green background are input numbers read from other sheets. FILL THESE

© Angel of Sweden 2023 (angelofsweden.io)

v 1.0
LTV €17,163
CAC €5,630

LTV:CAC ratio 3.0 (should be above 3 for viable business model)

© Angel of Sweden 2023 (angelofsweden.io)

v 1.0
 Ex 1: A hardware product with an upfront buying cost, implementation project, ongoing maintence contract and a yearly ben

Year
LTV 0 1 2 3 4
One time purchases
Price €10,000
Next Product Purchase rate (beyond year 0)
Costs: Buy hardware from supplier €3,000
Costs: Installation and Customer Success €500
Total Costs €3,500
Gross margin 65%
Profit €6,500 €0 €0 €0 €0

Recurring revenue #1
Price €1,500 €1,500 €1,500 €1,500 €1,500
Retention rate 100% 90% 90% 90% 90%
Cumulative retention rate 100% 90% 81% 73% 66%
Next Product Purchase rate
Costs: Customer Support €158 €158 €158 €158 €158
Costs: Datacenter and License costs €50 €50 €50 €50 €50
Total Costs €208 €208 €208 €208 €208
Gross margin 86% 86% 86% 86% 86%
Profit €1,292 €1,162 €1,046 €942 €847

Upsell / Addon purchases

Price €10,000 €10,000 €10,000 €10,000 €10,000
Product Purchase 50% 25% 25% 10% 10%
Costs: Salaries for Consultants €1,218 €1,218 €1,218 €1,218 €1,218
Costs: Travel and Expenses €500 €500 €500 €500 €500
Total Costs €1,718 €1,718 €1,718 €1,718 €1,718
Gross margin 83% 83% 83% 83% 83%
Profit €4,141 €2,070 €2,070 €828 €828

Total Profit €11,932 €3,233 €3,117 €1,770 €1,676

Cost of Capital (35% - 75%) 50%
Net present value factor 100% 67% 44% 30% 20%
Present Value €11,932 €2,155 €1,385 €524 €331

LTV €17,163

© Angel of Sweden 2023 (angelofsweden.io)

v 1.0
rly benefits evaluation project

€10,000 Buying a the hardware for €10,000 euro up front including installation fees. Life time is 5 years.
75% 75% of the customers will purchase a replacement product
€3,000
€500 Salaries for people, and expenses to get on site
€3,500
65% 65% margin when substracting cost of to produce the hardware and get it shipped to the installation place and paying the s
€4,875

€1,500 Pays €1,500 yearly for a maintence contract

100% 90% of customers will keep renewing the maintenance contract year 1 - 4. Of the ones buying a replacement unit in year 5
66%
75% 75% of the customers bought a replacement product and will thus need the subscription
€158 One CS agent also acts as account manager and we are estimated to be able to handle 200 clients
€50 The AWS server, and a third party software to deliver the service is integrated in the solution will cost €50 per year and cus
€208
86% 85% margin when substracting costs for service personell, travel to site for repairs and spare parts needed.
€636

€10,000 At the end of each year a benefits review project is offered to the customers as a consultancy service
10% Not all customers purchase such a project
€1,218 One consultant spends 1 week on performing the assessment and writing a report
€500 The AWS server, and a third party software to deliver the service is integrated in the solution will cost €50 per year and cus
€1,718
83% 70% margin when substracting cost for constancy salaries, travell costs
€828

€6,339
Cost of Capital is 50% as most of the capital needed to build the business comes from raising money from investors in exc
13%
€835
d paying the salaries for the people doing the installation

unit in year 5, 100% will buy a maintence contract.

year and customer

year and customer

estors in exchange for equity

Sales costs
Sales representatives and their manager's salaries (ye €79,200
Representation and travel costs (year) €10,000
Licences €1,200
Total sales cost €90,400

Marketing costs
Marketing people salaries (year) €14,256
Licences €500
Content Production €2,600
Website maintenence €1,000
SEO €8,000
Ad campaigns €24,000
Total Marketing costs €50,356
Sanity calculation o
Closed deals calculations Cumulative % Per week Hours spent for each custo
Prospect 800 15.4
Conversion Rate 25% 25%
Qualfied Conversations 200 3.8
Conversion Rate 25% 6%
Offer and Negotiation 50 1.0
Conversion Rate 50% 3%
Number of Closed Deals 25 0.5 Man hours s

CAC calculation
Number of closes deals in a year 25
Total cost of sales and marketing €140,756

CAC €5,630

© Angel of Sweden 2023 (angelofsweden.io)

v 1.0
 1 full time sales rep. Including benefits and bonuses.

LinkedIn Sales Nagivator

Marketing mgr working 20% of FTE. Fully loaded cost with benefits
Email marketing software
buying and publishing 1 piece of content every second week

Using consultant to do 2 projects / year to optimize web site

Spending €2000 / month on generating leads and awareness

on of time needed
ustomer and stage Total hours spent / week
0.5 7.7 Including outreach to book meetings. Spending 0.5 hours per prospect to get them to the

5 19.2 Number of customers you do meet and greets, demos and followup meetings. Spending

3 2.9 Compiling the offer, negotiation and signing. Spending 3 hours in total on average. until t

s spent per week 29.8 Spending on average 30 hours on direct sales activities is reasonable. Need to take vaca

The market rate cost for the sales reps closing the sales, cost for travel and prepresentat
hem to the meeting stage.

Spending 5 hours in total on average for each potential customer until we start negotiating.

age. until the deal is signed.

o take vacation into the calculation.

epresentation, sales managers. Calculated as the cost from all sales processes, not only closed ones, and divided by number of customers
of customers aquired
LTV €184
CAC €65

LTV:CAC ratio 2.8 (should be above 3 for viable business model)

© Angel of Sweden 2023 (angelofsweden.io)

v 1.0
 Ex 1: A hardware product with an upfront buying cost, implementation project, ongoing maintence contract and a yearly benefits evalu

Year
LTV 0 1 2 3 4
Subscription revenue
Price €120 €120 €120 €120 €120
Retention rate 100% 80% 80% 80% 80%
Cumulative retention rate 100% 80% 64% 51% 41%
Costs: Blended AppStore/GooglePlay "payment €24 €24 €24 €24 €24
Costs: Customer Support €3 €3 €3 €3 €3
Costs: Datacenter and Licenses €5 €5 €5 €5 €5
Total Costs €32 €32 €32 €32 €32
Gross margin 73% 73% 73% 73% 73%
Profit €88 €70 €56 €45 €36

Total Profit €88 €70 €56 €45 €36

Cost of Capital (35% - 75%) 50%
Net present value factor 100% 67% 44% 30% 20%
Present Value €88 €47 €25 €13 €7

LTV €184

© Angel of Sweden 2023 (angelofsweden.io)

v 1.0
s evaluation project

€120 App subscription price is €10 / month

80% 80% of the paying customers will be retained per year
33%
€24
€3 One CS agent is needed per 10000 paying cystomers
€5 The AWS server, and a third party software to deliver the service is integrated in the solution will cost 5 per year and paying
€32
73%
€29

€29
Cost of Capital is 50% as most of the capital needed to build the business comes from raising money from investors in exc
13%
€4
ar and paying customer

estors in exchange for equity

Marketing overhead costs
Marketing people salaries (year) €71,280
Licences €5,000
Website maintenence €5,000
Total Marketing costs €81,280

Content Marketing
Content Production €5,200
SEO €16,000
Total Content Marketing costs €21,200

Search Engine Marketing

Cost per Click €2
Clicks bought 300 000
Total Search Engine Marketing costs €600,000

Customer Aquistion
Traffic: Content Marketing 240 000
Traffic: Search Engine Marketing 300 000
Total Traffic Generated 540 000
Conversions to free users 20%
Users 108 000
Conversion to customers 10%
Customers acquired 10 800

CAC calculation
Number of customers in a year 10 800
Total cost of marketing €702,480

CAC €65

© Angel of Sweden 2023 (angelofsweden.io)

v 1.0
Marketing mgr. Fully loaded cost with benefits
Email marketing software

Buying and publishing 1 piece of content every week

Using consultant (rate €100) to do 4 projects á 40 hours / year to optimize web site for tra

Genereating 20 000 visits to download the download stage of the app

20% of the people that is presented with the option to download the will do so and becom

10% of the engaged users will buy a subscription

b site for traffic

and become an engaged free users