How to Start a Subscription Business "Starting a subscription business is an exciting venture, but success depends on thorough planning, delivering on a clear value proposition, and a relentless focus on customer experience"
By Alice Wainwright Edited by Patricia Cullen
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur United Kingdom, an international franchise of Entrepreneur Media.
In 2020, I launched my coffee subscription business, RISE Coffee Box, from my living room with minimal funds (raised from a Kickstarter campaign), a £50 logo, and a simple idea: to revolutionise how people enjoyed coffee at home through a multi-roaster coffee discovery club. At the time, it felt like the subscription boom had already peaked, but the lockdowns proved otherwise. Once the idea and brand were in place, the subscription part seemed straightforward - people wanted coffee delivered regularly. But as the business grew, so did the complexity, with varying product types, delivery addresses, and schedules. Fast forward to today, and we've built a six-figure, B Corp certified business with a deeper understanding of what makes a subscription business thrive.
Step 1: Solve a real consumer problem
Before launching, it's crucial to understand your target audience and the problem you're solving. For us, people loved café-quality coffee but were stuck with stale, over-roasted beans from supermarkets. Our solution: a coffee discovery club offering barista-quality coffee at home. Consider the pain points your business can address, and how the subscription model fits. In our case, there were already other coffee subscriptions out there, but none of the brands felt modern and exciting, or offered the variety of coffee we were looking for.
Step 2: Test your idea and understand your audience
Research your audience thoroughly but don't get bogged down in theory - get out there and test the idea with real life people. When we launched on Kickstarter, it wasn't just about raising funds - it was also a great way to test our idea. Did people want this product? Yes! Were they willing to pay for it? Yes! So…Who were they? What did they look like? Where can we find them? You can easily conduct surveys and interviews to gain valuable insights, something we continue to do with customers regularly. Understanding your audience's habits, preferences, and pain points will shape your subscription offering and help you market effectively.
Step 3: Develop a compelling value proposition
A strong value proposition is the backbone of any business. Our value proposition is clear: freshly roasted, specialty-grade coffee sourced from the UK's best independent roasters, ethically and sustainably produced. We also give back 1% of our sales to tackle issues on coffee farms, like child labour. These messages consistently underpin our marketing and help set us apart from the competition.
Step 4: Design your subscription model (and choose the right tech)
When designing your subscription business, think carefully about how your subscription model will work, considering frequency, pricing and flexibility. Choosing the right technology to underpin the above is critical. Research the tech depending on your needs, and speak to other founders with similar businesses.
Step 5: Build a strong marketing strategy
Effective marketing channels include social media, influencer partnerships, referral programmes, and content marketing. Engaging content that resonates with your audience and amplifying it through ads can drive growth. Micro-influencers often provide the most engaged followers.
Step 6: Prioritise customer retention
Acquiring customers is just the start - retaining them is key. Successful subscription brands like Netflix or Gousto deliver reliable services with minimal friction. So make sure you have the basics right. Do you deliver when you say you will? Can your customers manage their account effectively? Can they easily get in touch with you? But retention isn't just about functionality; it's also about creating an emotional connection. At RISE, we focus on "surprise and delight" marketing activity, such as inviting our subscribers to exclusive coffee tastings, or offering excellent (human) customer service.
Once your business is up and running, track key performance indicators like churn rate, customer acquisition cost (CAC) and customer lifetime value (CLV). These help forecast growth and scale your business effectively. The beauty of subscriptions is the predictability of revenue, enabling confident growth forecasts. Starting a subscription business is an exciting venture, but success depends on thorough planning, delivering on a clear value proposition, and a relentless focus on customer experience. By identifying a niche, building a strong brand, and prioritising retention, you can create a subscription model that not only thrives, but builds long-lasting relationships with your customers.
