---
title: "SaaS: How to code the subscriptions business model?"
author: "Yaroslav Shmarov"
date: "2020-11-30"
canonical_url: "https://blog.superails.com/how-to-code-the-subscription-business-model-saas-service-as-a-service-part-1"
markdown_url: "https://blog.superails.com/how-to-code-the-subscription-business-model-saas-service-as-a-service-part-1.md"
description: "Software as a Service (SaaS) = leasing = access to software with an end date. You are charged to postpone the end date."
tags: ["ruby-on-rails","tutorial","premium","subscription","saas","mvp","startup"]
license: "GNU AGPL v3. Credit Yaroslav Shmarov and link the canonical URL."
---

# SaaS: How to code the subscriptions business model?

Software as a Service (SaaS) = leasing = access to software with an end date.

You are `charged` to postpone the `end date`.

From this perspective, a "One-time payment" = subscription with lifetime access.

Minimalistic Database representation:

![subscription-uml-1](https://blog.superails.com/assets/2020-11-23-how-to-code-the-subscription-business-model-saas-service-as-a-service/subscription-uml-1.png)

### Example: Spotify subscription

In this case a user can buy a  `premium` subscription for `$9,99` for a limited time `1 month` to **remove adds**.

Here's how it will work:

```ruby
# app/models/user.rb

#  email      :string
#  ends_at    :datetime

def premium_price
  # how much to charge for postponing ends_at
  # always keep money in integer. last 2 digits are cents
  999.to_i 
end

def premium_interval
  # by how long to postpone the ends_at
  # monthly or yearly or forever
  1.month 
end

def active_subscription?
  ends_at > Time.now
end

def show_annoying_adds?
  # business logic
  unless active_subscription?
end
```

```ruby
# app/models/charge.rb

# user_id     :integer
# amount      :integer # to track how much was paid at this moment of time

belongs_to :user
```

```ruby
# app/controllers/charges_controller.rb

def create
  @charge.amount = current_user.premium_price

  # PAYMENT PROVIDER LOGIC GOES HERE

  if @charge.save
    current_user.update(ends_at: Time.now + current_user.premium_interval)
  end
end
```

This way whenever a user makes a payment and creates a `charge`, 
his subscription `ends_at` is set to a later date based on `premium_interval`.

Of course, in this simple example `charges` are not automatic and the user has to explicitly `create` a `charge`.

That's it! 🤠

****

The SaaS business model can usually have 2 `collection_methods`:
* `charge_automatically` 
* `send_invoice`