SaaS Financial Model: Simple Template For Early-Stage Startups

Gary Gaspar
Oct 12, 2016 · 5 min read

Why You Need A Financial Plan?

Financials models are nothing more than a bunch of hypotheses thrown together in a spreadsheet. Your job is to come up with your own unique set of believable hypotheses.

Your plan will turn out to be false

At first, this got me quite frustrated.

Building The Model

As I said earlier, financial plans are nothing more than a bunch of unproven hypothesis thrown together. These hypotheses can be grouped into 2 categories.

  1. Cost-structure hypothesis (what drives cost)
  1. Increase the average transaction value (KPI: Average revenue per new customer)
  2. Increase the frequency of repurchase (KPI: Monthly revenue churn rate)

Where to go from here?

Now that you know what grows MRR, you can start plugging numbers and growth rates to see how the model behaves.

  • Drive outbound traffic: Email prospecting, cold calling,…
  • Improve Marketing Website: Write new copy, promote new features, record a demo video, optimize speed, optimize SEO, design new website, A/B testing…
  • Optimize free trial: Marketing automation campaigns, customer success, sales
  • Go upmarket
  • Increase prices
  • Build better features
  • Upsell to existing customers
  • Build new features
  • Incentivize yearly billing
  • Invest in customer success

Conclusion

Financial planning is more than an item you check on your fundraising checklist.

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Gary Gaspar

Written by

Founder at Marker.io — I love everything about to SaaS, Startups, Product & Growth

The Mission

A network of business & tech podcasts designed to accelerate learning. Selected as “Best of 2018” by Apple. Mission.org