What to measure for SaaS companies!
SaaS exhibits more similarities across businesses than any other industry. To evaluate the well-being of their business, there are several critical metrics that one must absolutely track.
Though it is important to take the first step to start a company, it is equally vital to monitor the direction in which their startup journey is progressing. However, many new founders face challenges in identifying the appropriate metrics to measure, and even if they do measure them, they often lack knowledge about the benchmark standards.
Therefore, I have compiled some information from different sources that can serve as a good starting point for founders to gain insight into their current position and progress.
Not Boring’s view:
Lenny’s newsletter- Growth breakup
Operating Metrics Benchmarks Median Gross Margin: 74% Median Operating Margin (19%) Median FCF Margin: 4% Median Net Retention: 120% Median S&M % Revenue: 45% Median R&D % Revenue: 26% Median G&A % Revenue: 19%
While this overview can provide a general understanding, it is important to recognize that each industry has its unique intricacies. Achieving optimal results often requires measuring progress within the context of one's specific industry.
Shameless plug: We, at Mantys, are dedicated to offering industry-specific insights. We are committed to building the largest repository of accurate benchmarks and best practices, tailored to help businesses thrive in their respective sectors.