---
title: "No churn figure for a subscription business"
url: https://firstpassmemo.com/flags/no-churn-figure/
updated: 2026-10-07
publisher: FirstPass Memo (hello@firstpassmemo.com)
---

Red flag explained · Customers and retention

# No churn figure for a subscription business

Short answer: Churn is the share of customers or revenue lost each month. For a subscription business it decides how much of today's revenue is still there in a year, so a price without it is a guess. Ask for monthly customer and revenue churn for each of the last 12 months.

Updated 7 October 2026 · Checker rule NO_CHURN

## When the checker raises it

Raised as medium severity when the listing looks like recurring revenue (SaaS, subscription, membership, newsletter or MRR) and gives no churn figure.

## Why it matters

At 3% a month, about 69% of today's customers are still paying after a year. At 8% a month, about 37% are. Those two businesses can show the same MRR today and be worth very different amounts.

Sellers who know their churn is low tend to say so. A missing figure is worth a direct question.

## A worked example

Composite example, not a real listing

SaaS booking tool for dog groomers Asking price: $55,000 MRR: $2,400 Average monthly profit: $2,000 120 paying customers Revenue verified via Stripe Business age: 3 years Owner hours: 5 hours per week

Traffic or revenue sources typed in: Organic search 35%, Direct 40%, Referral 25%.

What the red-flag checker (https://firstpassmemo.com/checker/) returns: payback of 27.5 months on average monthly profit, and this flag:

Medium No churn figure for a recurring-revenue business

Churn decides how much of today's revenue will still be there in a year. Without it, the price is a guess.

Ask: What were monthly customer churn and revenue churn for each of the last 12 months?

The same example also raises: Concentration not disclosed (https://firstpassmemo.com/flags/concentration-not-disclosed/).

## What to check

- Ask for monthly customer churn and revenue churn for each of the last 12 months, and how each is calculated.

- Ask how many new customers arrive each month, and from where.

- Run the SaaS churn stress test with a range of churn rates.

## Questions to send the seller

- What were monthly customer churn and revenue churn for each of the last 12 months?

- How is churn calculated: by customers or by revenue, and are annual plans included?

- How many clients left in the last 12 months, and why did the last three leave?

- How many subscribers are on annual plans, and when do they renew?

## Related flags

- Churn above 5% a month (https://firstpassmemo.com/flags/monthly-churn-above-5-percent/)

- Few paying customers (https://firstpassmemo.com/flags/few-paying-customers/)

- All red flags explained (https://firstpassmemo.com/flags/)

## Useful next

- SaaS churn stress test (https://firstpassmemo.com/tools/saas-churn-stress-test/)

- Buying a micro-SaaS (https://firstpassmemo.com/buy/micro-saas/)

- Free red-flag checker (https://firstpassmemo.com/checker/): paste a listing and see which flags it raises.

The checker is a set of plain rules, not an AI model, and its flags are prompts for questions, not verdicts. Composite examples are invented. Informational screening only, not investment, legal or tax advice.

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FirstPass Memo is informational screening, not investment, legal, tax, accounting or valuation advice, and not an audit. Seller figures are not independently verified. HTML version: https://firstpassmemo.com/flags/no-churn-figure/