Simple SaaS cash flow analysis
Originally published: 09/09/2016 18:03
Last version published: 26/01/2017 13:49
Publication number: ELQ-98156-4
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Simple SaaS cash flow analysis

Illustrates the SaaS P&L/Cash Flow trough highlighting the importance of growth management for better profits.

SaaS businesses suffer from significant losses in their early stages, because of a cash flow problematic.

The reason behind this is because they have to put a very large investment at the start to get customers and the profits from the investment take a long time to be acquired. However, these losses can be somehow decreased if the business makes the decision to grow faster.

The problem with it is that in many SaaS businesses, it transforms into a cash flow problem as payments tend to come month by month from the customers.

So to help users visualize the issue at hand, I have made a Excel model where $6000 have been spent to acquire a customer, and holding them liable at a rate of $500 per month.

This model includes:
- Single Customer Cashflow
- Multiple Customer Cashflow
- Graphs showing the Churn Impact

- David Skok,

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