World Class SaaS Model - Growth Driven by Headcount Ratios and Quota Attainment

This is a general 5-year SaaS financial model that runs on assumptions that determine ratios as well as deal quotas. 3-Statement model and cap table.

by Jason Varner
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Description
Recently updated with a fully integrated monthly and annual Income Statement, Balance Sheet, and Cash Flow Statement as well as a capitalization table and capex with depreciation logic.

One of the hardest things to do when planning out a future SaaS operation is figuring out the right amount of scale that should happen across multiple areas of the business. If you do some research, you can see various ratios that end up existing over time but it is hard to directly connect costs with the associated growth.


The driver of revenue is going to be based on how many users a given Account Executive (AE) can sign up per month. However, we all know that these AEs don't achieve maximum efficiency right off the bat. It takes time for them to eventually start reaching their quota. This model lets you define the quota and then define the % of that quota an AE is planned to achieve in their first 3months/6months/9months/12months. You can adjust the monthly ranges to your desire.


One of the key reasons for doing the above is to show more realistic costs that are associated with growing a user base that heavily relies on AE's to bring in new subscribers. If you go ahead and hire a bunch of new AE's, their costs are going to be greater than their revenues at the start, but over time they become more efficient and the users they have signed up will start paying for those costs. This model captures that natural effect really well.


The amount of AE's that exist will be based on a ratio that the user defines (amount of AE's per Sales Director (SDR). You can set this ratio differently in each of the 5 years.


Customer service reps are driven by the amount you plan to need per new signups per month and per active customers.


Engineer headcounts are based on the percentage of revenue allocated to them divided by their annual salaries. There are two types of engineers you can model to account for varying salaries and levels.


There is a separate assumptions tab to define executive hires like the CEO/CEO/CTO as well as account for other on-going operations expenses and COGS. There are assumptions to define how much debt and equity you plan on having as well as the distribution of cash flow to the owners vs. investors. An exit value also exists based on an annualized revenue multiple. The user can define no exit as well. Debt is assumed to be paid back in the month an exit happens if it happens.


There are a lot of visuals to view key financial metrics, user growth, and key advanced metrics.


Advanced metrics include Customer Lifetime Value (LTV), Customer Acquisition Cost (CaC), LTV to CaC ratio, month to pay back CaC, and avg. revenue per user/avg. revenue per employee.

This Best Practice includes
1 Excel template and 1 tutorial video