The Newsletter Business Model Spreadsheet 📈 

I created this spreadsheet to help newsletter operators make important decisions related to your newsletter growth and monetization.

Click below → Click File → Make a Copy → Edit it with your own numbers.

How to use it 🛠️ 

This model helps you see the short and long-term impact of the different paths you can take with your newsletter.

In short, it will help you avoid wasting time on the wrong levers in your business.

Here are just a few examples of questions you can use the model to answer:

• Ads vs. Owned Products: What should my current focus be: selling ads or creating a product/service offering? Which one will drive more revenue in the short-term based on my subscriber count?

• Low vs. High Ticket: Which is better? A low-ticket product that 5% of my audience buys OR a high-ticket service that 0.5% buy?

• Pricing: How should I price owned my products, services and premium subscriptions?

• Growth Milestones:

  • How much monthly ad revenue can I expect if I get my list to 10,000 subscribers? How much in product sales?

  • If I invest $1k/month in paid ads to grow the audience, how long will it take me to reach 50,000 subscribers?

• Ad Costs: If my CPA (cost per acquisition) goes up, how will that affect my profit margins?

And more…

If you want definitions of the terms in the spreadsheet, scroll below.

GLOSSARY: Terms defined 🤓 

Every yellow cell in the spreadsheet is a dynamic cell you can change. Use them to:

• Plug in your current numbers

• Plug in future milestones you want to reach

• Play around with price points, conversion rates, ad costs and more

Growth Assumptions 📈 

Starting Subscribers

→ How many subscribers you have now

Organic Monthly Growth

→ New subscribers per month / current list size

Input your actual organic growth rate. This includes:

• SEO

• Organic social media

• Word of mouth + referrals

If you don’t know this, start very small (between 0% and 1%).

Organic growth percentages become harder to sustain over time, even if organic growth is your primary source of new subscribers.

For example, if you get 100 new subscribers/month from Google traffic:

• If you have 1000 subscribers, that’s 10% growth

• At 10,000 subscribers, that’s only 1%

Monthly Ad Spend + Cost Per New Subscriber (CPA)

→ How much you spend monthly on paid acquisition

→ How much it costs to acquire 1 new subscriber (CPA)

There are 2 main paid growth channels:

1. Social media ads: Meta (FB/IG) is the most common (that’s why our newsletter growth agency focuses on Meta ads). They have the lowest acquisition costs. LinkedIn, Google, and YouTube are too expensive. Twitter (X) can work in certain scenarios.

2. Referral Networks: The two main ones are Sparkloop and Beehiiv Boosts.

   • You set how much you’re willing to pay for a new subscriber. When another newsletter sends you a subscriber, you pay them.

Paid Meta Ads

Sparkloop and Beehiiv Boosts

Monthly Churn

→ The % of subscribers that unsubscribe each month + any disengaged subscribers you clean from your list.

This number is a function of the quality of your content and whether or not you’re delivering the value you said you would when people signed up.

Monetization Assumptions 💰️ 

% of new subscribers who sign up for a paid referral + $ per referral

→ The % of new subscribers to your newsletter that sign up for another newsletter you refer them to

→ The average $ you earn per successful referral

This is the other side of the referral marketplaces (Sparkloop and beehiiv).

When someone subscribes to your newsletter, they are then shown a few newsletters they can also sign up for. If someone does, you get paid for driving that referral (as long as they meet the screening criteria).

Things to note:

• Not every new subscriber will also opt-in to another newsletter

• Not every other newsletter pays the same amount, but you get to choose who you recommend.

Number of sends per month

→ The number of newsletters you send every month.

This is extremely important for ad-driven business models.

More sends = more ad inventory and the more revenue you can generate (if you successfully sell the ad slots)

(beehiiv’s ad network is making this as close to effortless as possible)

That said, more sends typically means lower open rates and potentially higher churn.

Number of ads per send + the % of ads that are sold

→ # of ads per email send = how many different ad placements you include in each email

→ % of ad slots sold = the % of your ad inventory you successfully fill

You can increase inventory as much as you want (if you can believe it, I’ve seen newsletter that are almost entirely ads).

But typically, newsletter have between 1-3 ads.

One primary sponsor (banner image + longer description) and secondary sponsors (typically 1-2 sentences included in a curated links section).

Open rate

→ % of the emails you send that get opened

Your open rates primarily tell you how good your content is.

Advertisers often want to know your open rates to understand their CPM (cost per 1000 impressions) if they’re running an ad with you.

CPM (cost per thousand) per ad

→ The price per 1,000 impressions that advertisers will pay you

This can range from $25-$300 depending on the nature of your audience.

Example:

List size = 10,000 subscribers, open rate = 50%, CPM = $30

10,000 × 50% = 5,000 impressions per email

5,000 impressions per email / 1000 = 5 batches of 1k impressions

5 batches of 1k impressions x $30 = $150 per ad placement

CPC (cost per click) paid by an advertiser

→ What an advertiser pays you for every click you drive to their website via your email

This is an alternative structure to a CPM model for monetization through ads.

CPC is a common model if you use the beehiiv ad network.

Ad Click-through-rate

→ The % of your subscribers that open an email, who click on a CPC (cost-per-click) structured ad

$ for a premium subscription + % of subs who join premium

→ Price premium newsletter subscribers pay

→ % of total subscribers who upgrade to premium

$ for a product you sell + % of subs who buy your product

→ Price of your own products or services

→ % of total subscribers who purchase that product or service

Cost Assumptions 💸 

This last section covers your expenses for running your newsletter.

Monthly subscriptions

→ any recurring expenses for operating your newsletter

When you’re just getting started, this might only be one line: your email service provider (ESP).

As you scale, and depending on the business model you pursue, you might incur other costs like:

• Integration tools like Make and Zapier

• Custom websites builders to perform A/B tests

• An ad agency to grow your newsletter

• Virtual assistant

• Part-time writer

• Part-time ad sales employee

That’s it.

Click the button below, make a copy and give it a go.

Enjoy 🫡 

Kieran

p.s. I had a group of people test the spreadsheet so I can fix any errors. If you find any other errors or have suggestions for improvement, let me know.