If you run or plan to run a subscription-based business than you need this step-by-step guide on understanding, building a business model around, and tracking the key metrics for a Software-As-A-Service (or SaaS) business.
The good news is that the SaaS industry is one of the fastest growing and most profitable industries for startups ($21B and growing at 20% per year). If properly optimized, revenue for this type of startup is predictable, scalable, and potentially exponential.
The bad news is that most entrepreneurs don't understand the key metrics that drive the success of SaaS businesses. You need to become an expert in key SaaS calculations like Cost To Acquire Customers (CAC), Monthly Recurring Revenue (MRR), customer Churn Rate, and the k-factor of your viral onboarding.
This guide covers all the basics that you'll need to plan, build, and track a high-growth business including Mark's detailed workbooks and spreadsheets used while a startup CFO and as a General Partner in RealVentures
This guide is critical to ANY SaaS company regardless of their stage.
Section 1 — Key SaaS Calculations
- Saas Basics
- The SaaS Business Model
- Calculate Your Current Cost To Acquire Customer (CAC)
- Calculate The Lifetime Value (LTV) Of Your Current Customers
- Evaluate Your Current Business Model Results
- Optimize The Balance Between Monetization (LTV) And Cost To Acquire Customer (CAC)
- Calculate Your Monthly Recurring Revenue (MRR) And Average Revenue Per User (ARPU)
Section 2 — Sales Funnel And Conversion Rates
- Track And Measure Key Website Metrics
- Measure The Conversion Rate In The Sales Funnel
- Calculate The Return On Investment (ROI) Of Your Marketing Campaigns
Section 3 — Revenue And Growth
- Pricing To Win
- Calculate And Track The Churn Rate
- Create A Content Marketing Strategy: SEO Vs. SEM
- Increase Average Revenue Per Customer (ARPC)
- Increase Your Funnel Capacity
- Calculating Viral Growth
— Audrey Melnik rated this guide 5 out of 5
— Peter Shepard rated this guide 4 out of 5
Great information in a concise way. If you are building a SaaS startup, this gives you a framework for measuring your progress.
— Joel Confino rated this guide 5 out of 5
— SkinVision rated this guide 4 out of 5
How to Measure marketing/sales goal What should we focus on to increase service growth across regions across companies
— dreamgrow rated this guide 5 out of 5
— Jim Gonzales rated this guide 4 out of 5
Very useful An excellent and very useful project that introduces you to the SaaS terms and metrics and includes a very useful spreadsheet. I could use more pro tips.
This will help my startup. Thank you.
— basedrop rated this guide 4 out of 5