Pilot Revenue Calculator
Project 12-month revenue, costs, and profitability based on merchant acquisition, churn, and ARPU (average revenue per merchant).
Purpose
This calculator helps you:
- Forecast Year 1 revenue and profitability
- Test different acquisition and churn scenarios
- Find the break-even month
- Validate unit economics assumptions
- Understand sensitivity to ARPU and churn rate
Interactive Calculator
Scenario Presets
Input Assumptions
Merchant Acquisition Algorithm
12-Month Projections
| Month | New | Churned | Active | Revenue | Costs | Profit | Cumulative |
|---|---|---|---|---|---|---|---|
| 0 | 2 | 0 | 2 | $300 | $85 | $215 | $215 |
| 1 | 2 | 0 | 4 | $600 | $85 | $515 | $730 |
| 2 | 2 | 0 | 6 | $900 | $85 | $815 | $1,545 |
| 3 | 2 | 0 | 8 | $1,200 | $85 | $1,115 | $2,660 |
| 4 | 2 | 0 | 10 | $1,500 | $125 | $1,375 | $4,035 |
| 5 | 3 | 0 | 13 | $1,950 | $125 | $1,825 | $5,860 |
| 6 | 3 | 0 | 16 | $2,400 | $125 | $2,275 | $8,135 |
| 7 | 3 | 0 | 19 | $2,850 | $125 | $2,725 | $10,860 |
| 8 | 3 | 0 | 22 | $3,300 | $125 | $3,175 | $14,035 |
| 9 | 3 | 1 | 24 | $3,600 | $125 | $3,475 | $17,510 |
| 10 | 3 | 1 | 26 | $3,900 | $125 | $3,775 | $21,285 |
| 11 | 3 | 1 | 28 | $4,200 | $125 | $4,075 | $25,360 |
| 12 | 4 | 1 | 31 | $4,650 | $125 | $4,525 | $29,885 |
Year 1 Summary
Key Insights
- ✅ Profitable pilot: Net profit of $29,885 in Year 1 validates business model.
- ✅ Excellent margins: 95.3% profit margin indicates strong unit economics.
- ✅ Strong retention: 5% churn rate shows good product-market fit.
- ✅ Fast break-even: Reached profitability at Month 0.
How to Use
1. Load a Preset Scenario
Click Conservative, Baseline, Optimistic, or Aggressive to see pre-configured merchant acquisition plans.
- Conservative: Slow acquisition (2-4/month), higher churn (8%)
- Baseline: Moderate acquisition (2-8/month), healthy churn (5%)
- Optimistic: Faster acquisition (3-10/month), good churn (3%)
- Aggressive: Very fast acquisition (4-12/month), excellent churn (2%)
Pricing is a fixed $150 flat rate per merchant per month (the only SKU; per-redemption pricing is retired, 2026-08-30), so the presets vary acquisition speed and churn, not ARPU. The live calculator is the source of truth for profit figures; the ranking (conservative < baseline < optimistic < aggressive) holds, driven by acquisition and churn.
2. Adjust Custom Inputs
Basic Metrics
- ARPU: Average revenue per merchant per month (100-300 range)
- Monthly Infrastructure Cost: Hosting, Firebase, domain (50-200 range)
- Monthly Contractor Cost: Support/ops contractor (0-100 range)
- Merchant Churn Rate: % of merchants lost monthly (0-20% range)
Merchant Acquisition Schedule
Adjust new merchants per month for each of the 13 months (Months 0-12). This gives you fine-grained control over acquisition timing.
3. Read Results
Month-by-Month Table
- New: Merchants acquired that month
- Churned: Merchants lost to churn
- Active: Total merchants (cumulative)
- Revenue/Costs/Profit: Monthly metrics
- Cumulative: Running total of profit (breaks even when cumulative profit > 0)
The table highlights the break-even month in green.
Year 1 Summary Cards
- Total Revenue: Sum of all monthly revenue
- Total Costs: Sum of all monthly infrastructure + contractor costs
- Net Profit: 12-month cumulative profit (or loss)
- Profit Margin: % of revenue that's profit
- Avg Merchants: Average active merchants across the year
- Break-Even: Which month (if any) cumulative profit turns positive
Insights Panel
Smart indicators:
- ✅ Success if profitable or break-even by Month 6
- ⚠️ Warning if losing money or projected to lose money
- ℹ️ Info on margin health (> 50% is excellent)
- ℹ️ Churn feedback (< 5% is strong, > 10% is concerning)
Key Concepts
ARPU (Average Revenue Per Merchant)
Revenue generated by each merchant per month.
Examples:
- $150/month: The flat campaign (the only priced SKU today)
- Above $150: Models hypothetical ARPU upside from any future add-on (none planned; per-redemption pricing is retired)
- Below $150: Only if you discount the flat fee to win a skeptical merchant
Changes to ARPU have the biggest impact on profitability. A 10% increase in ARPU can change year 1 profit from loss to strong growth.
Merchant Churn Rate
% of active merchants lost each month (cancellation, switching platforms, etc.)
Healthy benchmarks:
- 5%/month: Good (95% retention) — strong product-market fit
- 3%/month: Excellent — very sticky product
- 8-10%/month: Concerning — retention issues need attention
Example: If you have 100 active merchants and 5% churn, you lose 5/month.
Churn reduces growth impact. Even with aggressive acquisition, high churn caps total merchants.
Break-Even Month
Month when cumulative profit becomes positive (net profit > 0).
Healthy:
- Month 1-6: Exceptional product-market fit, strong economics
- Month 7-12: Reasonable, shows path to profitability
- After Month 12: Consider reducing costs or increasing ARPU
If break-even is never reached in 12 months, the model shows sustained losses — adjust assumptions.
Scenarios Explained
Conservative
- Slow merchant acquisition (2-4/month average)
- Higher churn rate (8%) = retention challenges
- ARPU is the $150 flat campaign (pricing is fixed; conservative = slower acquisition, higher churn)
Result: Year 1 likely shows break-even or modest loss. Validates need to either:
- Acquire faster
- Improve retention
- Increase ARPU
Use case: Worst-case planning, stress test, risk modeling.
Baseline
- Moderate acquisition (2-8/month, ramps late year)
- Healthy churn (5% = 95% monthly retention)
- ARPU is the $150 flat campaign
Result: Break-even by Month 10-11, profitable Year 1, ~$3K annual net profit.
Use case: Default assumption for pilot planning. Most likely scenario.
Optimistic
- Faster acquisition (3-10/month)
- Good churn (3% = 97% retention)
- ARPU is the $150 flat campaign (optimism comes from faster acquisition and lower churn)
Result: Break-even by Month 8-9, strong Year 1 profit (~$8K+), clear path to scale.
Use case: Best-case scenario if marketing/product performs well.
Aggressive
- Very fast acquisition (4-12/month)
- Excellent churn (2% = 98% retention)
- ARPU is the $150 flat campaign (aggressive = fastest acquisition and lowest churn)
Result: Break-even by Month 6-7, very profitable Year 1 (~$15K+), ready to scale aggressively.
Use case: If you achieve viral growth or land major anchor merchant.
How to Customize Acquisition Schedule
The New Merchants per Month section lets you model realistic acquisition timing:
- Months 0-2: Slow start (seed launches, early testing)
- Months 3-6: Ramp up (word-of-mouth, early PR)
- Months 7-9: Acceleration (referral loops, paid marketing)
- Months 10-12: Scale (product maturity, proven model)
Example baseline curve: [2, 3, 3, 2, 4, 4, 4, 3, 3, 3, 8, 8, 8]
- Slow in spring (2-3/month)
- Ramp in summer (4/month)
- Aggressive push in fall/winter (8/month)
Adjust these numbers to match your actual go-to-market plan.
Sensitivity Analysis
Try these tweaks to understand impact:
| Change | Impact | Lesson |
|---|---|---|
| ↑ ARPU by 10% | +$5-10K annual profit | Pricing has outsized impact |
| ↓ Churn by 2% | +$2-5K annual profit | Retention compounds over time |
| ↑ Merchant acquisition 20% | +$8-15K annual profit | Speed matters for Year 1 |
| ↓ Operating costs by 20% | +$2-3K annual profit | Optimization helps but not primary driver |
Insight: ARPU and acquisition speed are levers. Churn is compounding. Operating costs matter less at pilot scale.
Common Questions
Q: When should we hire the contractor?
A: Currently set for Month 4. If acquiring faster, move earlier. If slower, move to Month 6-7.
Q: What ARPU should we target?
A: $150, the flat per-merchant monthly rate, period (per-redemption pricing is retired, 2026-08-30). Test sensitivity:
- Below $150: only if you discount to win merchants (limits runway)
- $150: the priced anchor
- Above $150: models hypothetical add-on upside (no add-on SKU is planned)
Q: How many merchants do we need for profitability?
A: At the $150 flat fee, one merchant already covers the pilot's infrastructure cost (tens of dollars/month), so the pilot is cash-flow positive almost immediately. The meaningful break-even is against larger opex: covering a ~$4,000/month full-time hire takes ~27 active merchants at $150 each.
Use the calculator to find your magic number.
Q: Why does churn matter so much?
A: Because it's compounding. Small monthly churn (5%) = 34% annual churn from a cohort. Over 12 months, this severely caps total merchants.
Q: Should we plan to be profitable in Year 1?
A: Depends on strategy:
- Investors: May not require Year 1 profit (growth > profitability)
- Bootstrapped: Should hit break-even by Month 9-12
- Cooperative: Should at least show credible path to profitability
This calculator helps you model either approach.
Integration with Other Docs
- ECONOMICS.md — Cost structure and assumptions (archived; superseded by the canonical plan)
- PILOT_STRATEGY.md — Full 12-month pilot plan (archived; superseded by the canonical plan)
- FUND_ALLOCATION.md — How Year 1 revenue is allocated to employees, costs, etc.
Last Updated: 2026-01-11