How to Set Up a Subscription Business from Scratch

This is not a guide for how to build a business. However, it is a guide to businesses that sell subscriptions and how they can make sure to keep that as simple as possible.



Alunta Adds Value to Your Subscription Business

As a subscription-based business, recurring billing is essential. At Alunta, we run a subscription business ourselves, and we use Alunta every day to invoice our customers. Whether it’s through credit card payments or invoices, the system keeps track of renewals and ensures that payments are sent to the customers automatically. Alunta was born out of necessity. We needed a solution to the recurring challenge of “subscription management.” (By the way, you can read exactly how this problem is solved right here!) The challenge was that many of the existing systems we tried could do far too much. Honestly, we felt they were overpriced, packed with features and tools we didn’t need. We just wanted our recurring billing to be automated. (You can also learn more about who “we” are right here.) Anyway, let’s dive back into the blog post.

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How to Set Up a Subscription Business from Scratch

Subscriptions are one of today’s most popular business models—and we’re big fans! From streaming services like Netflix to cleaning agreements and software solutions, subscriptions give businesses the chance to create stable and predictable income. We’re constantly amazed by the variety of businesses we encounter that have found a way to leverage subscriptions. It’s fantastic! But how do you go from a simple idea to a successful subscription business? And how do you ensure that managing everything doesn’t eat up all your time? This guide will take you step-by-step through how to start your own subscription business with a focus on simplicity and efficiency.

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What Is a Subscription Business?

A subscription business delivers products or services on a recurring payment basis. Customers typically pay monthly, quarterly, or annually for access to a service, product, or benefit.   Examples of Subscription Models:

  • Gyms: Monthly memberships that grant ongoing access to facilities.
  • Catering companies: Lunch plans delivered weekly or monthly to offices.
  • IT firms: Software-as-a-Service (SaaS) subscriptions with fixed license fees.
  • Window cleaning services: Regular service agreements for homes or offices.
  The advantage of this model is that it creates predictable revenue, strengthens customer relationships, and offers scalability.

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Step-by-Step Guide to Starting a Subscription Business

  1. Define Your Target Audience and Product: Start by understanding your customers’ needs. Are you delivering lunch plans, software solutions, or maintenance services? The better you know your audience, the easier it will be to tailor your business.
  2. Choose a Pricing Model and Payment Frequency: Should you offer a single price or allow customers to choose from multiple tiers (e.g., basic, premium)? Make sure your price reflects the value of your service.
  3. Set Up a Subscription Management System: You can start with a spreadsheet—we did! But eventually, a tool like Alunta can help you keep track of customers, payments, and renewals without tedious manual work.
  4. Automate Billing and Bookkeeping: With Alunta, you can automate the creation and sending of invoices, saving you time and reducing errors.
  5. Analyze and Optimize: Use data to understand which subscriptions perform best, and adjust your strategy accordingly.

Benefits of the Subscription Model

Why is the subscription model so popular? Because it combines predictable revenue with stronger customer relationships.   Key Benefits:

  • Stable Income: Predictable payments provide peace of mind and make planning easier.
  • Lower Sales Costs: It’s often cheaper to retain customers than to acquire new ones. (This is why understanding “churn” is critical.)
  • Increased Loyalty: Subscription relationships build long-term customer connections.
  • Scalability: With the right system, you can handle more customers without extra work.
  Example: A cleaning company offering monthly maintenance agreements can easily scale its business with the subscription model since administration is automated.

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Challenges of Subscription Businesses (and How to Solve Them)

While the subscription model has many advantages, it also comes with challenges:

  1. Customer Churn: Some customers may cancel their subscriptions, impacting your revenue. Provide excellent customer experiences and maintain regular communication to retain subscribers.
  2. Administrative Burden: Managing subscriptions manually can be time-consuming. Use a tool like Alunta to automate repetitive tasks.
  3. Lack of Insight: Without data, it’s hard to identify which subscriptions are most successful. Alunta provides reports and analytics to help you refine your strategy.

How Alunta Makes Starting a Subscription Business Easier

Alunta is tailored for businesses that want to automate their subscription management and billing processes. Features That Make a Difference:

  • Automated Billing: Invoices are sent automatically, saving you time.
  • Integration with accounting: All invoices are automatically logged in your accounting system.
  • Clear Overview: Easily see who has paid and which subscriptions need follow-ups.
  Example: A catering company with 100 recurring customers can save hours each week by using Alunta to handle invoicing and payment tracking. Every morning, the company logs into Alunta to see an overview of which accounts are ready for renewal. Just click “Invoice,” and the system takes care of the rest. If you prefer, you can even go fully automatic—no clicks needed.

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FAQ – Common Questions About Subscription Businesses

  1. What is a subscription business? It’s a business that offers products or services on a recurring payment basis.
  2. How does Alunta help? Alunta automates billing, bookkeeping, and monitoring so you can focus on your core business.
  3. Can small businesses benefit from the subscription model? Absolutely! The subscription model works for both small and large businesses by ensuring stable income and reducing administrative burdens.
  4. How can I avoid customer churn? Focus on delivering high value and use data insights to tailor your subscriptions to your customers’ needs.
  5. Is setting up a subscription business difficult? Building a business is challenging, but with the right tools like Alunta, you can quickly and effectively start handling recurring payments for your customers.

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Ready to Take Your Subscription Business to the Next Level?

The subscription model is one of the most reliable and scalable ways to run a business. By automating your processes with Alunta, you can save time, reduce errors, and focus on what really matters: creating value for your customers. Try Alunta for free today and see the difference for yourself.

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