The Economics of SaaS - Gearing up a SaaS salesforce
Originally published: 09/09/2016 18:27
Last version published: 26/01/2017 13:26
Publication number: ELQ-46632-3
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The Economics of SaaS - Gearing up a SaaS salesforce

Using a salesforce for CEOs, VP’s of Sales to understand the economics of a SaaS business.

-This tool includes an excel template along with graphs that show the cash flow trough that happens to SaaS, or to other types of businesses that are based on subscription or recurring revenue that utilize sales organisation.

Part 1:
Such types of SaaS companies come across a problem of cash flow in the early stage, because marketing expenses are critical given the need to acquire customers and this means they only get payed from those customers after a delayed time frame - This is what I have named the Cash Flow trough. The model helps us make a comparison between the monthly-charging firms versus those that can request for year-in-advance payments.

Part 2:
This part addresses the stage where businesses decide to scale, and do this by gearing up sales and marketing.

You will benefit most by simply downloading the model, and inputting your own values. If you store the 2 parts in the same directory, the PPT graphs can then be updated to visualize the template's data, simply by right clicking each diagram and selecting the "Edit Data" option.

- David Skok,

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This Best Practice includes
1 Excel Model, 1 illustrative powerpoint presentation

David Skok offers you this Best Practice for free!

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Further information

The model is basically built for companies with a sales force and that experiences recurring revenues.

Do not apply the model to businesses that do not have a sales force!

These are businesses that have what I like to call "Touchless conversion", which translates into sales without touch. Typically, such type of firms have lower investment rates in their sales and marketing expenditures, and tend to be positive in their inflow of cash much earlier.

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