SaaS Scaling Business SaaS Economics
This is the second part of a 2-part series discussing the cash flow trough that occurs when a SaaS or other subscriptionrecurring revenue business decides to expand the business by increasing sales and marketing. Such SaaS businesses face cash flow issues in the early days because they have to invest in sales and marketing expenses upfront to acquire customers and only receive payments from those customers on a delayed basis.
The first part of the series can be found here: SaaS Cash Flow Trough SaaS Economics .
This model works for any recurring revenue business malaysia mobile database that uses a sales force.
This model does not work for SaaS businesses that do not use a sales force. I call these businesses “touchless conversions” because there is no sales contact involved. These businesses typically have much lower investments in sales and marketing expenses and become cash flow positive much earlier.
Expand your business
I’m an advocate of aggressive investing when you find a repeatable, scalable sales model.
SaaS-economics
The model attached to this blog post will help SaaS entrepreneurs understand the cash flow impact of investing heavily in sales and marketing to drive growth.
Increase sales recruitment
In the first part of this series, we looked at the impact of hiring one new salesperson on cash flow. Now let's see what happens when we start hiring 2 new salespeople per month.