Episode 52

052 Ben Murray - Keys to Profitable SaaS Growth

In our SaaS Fuel™ Expert Series, Jeff is joined by The SaaS CFO Ben Murray to discuss the evolving landscape of SaaS metrics that matter in 2023 and beyond. We unpack Ben’s Five Pillar SaaS Metrics Framework to scale a thriving SaaS business with respectable growth, upside, and valuation. Come explore various SaaS revenue models like subscription, processing, variable revenue, SaaS plus, and professional services. Which is best or is there a magic mix? Listen in for great insights to tune up your financials for your next raise, loan, exit, or growth stage.

As a top financial expert in the SaaS world, Ben built his business based on total transparency helping B2B SaaS entrepreneurs understand and manage SaaS metrics vital for success and sustainability. He is an advisor, educator, consultant, and fractional CFO.

Key Takeaways

00:05:46 Simplifying SaaS Finance For Busy Entrepreneurs: Ben Murray's Journey

00:07:10 Transitioning From On-Premise to SaaS Takes Time And Effort

00:10:01 Founders Need To Focus On What Is Best For Their Customers

00:11:59 Financial Discipline Never Goes Out of Style

00:12:31 Ben’s Five Pillar SaaS Metrics Framework

00:15:30 Speaking the Language of Investors

00:15:56 How Far in Advance to Plan For A Raise Or Exit

00:18:36 Why Founders Tend to Spend More When They Shouldn't

00:20:02 To COGS or Not To COGS? Where Does Customer Success Fit?

00:22:43 The Valuation Bubble Burst: Impact and Fallout

00:23:41 Raising Capital Through Alternative Financing Methods

00:25:47 Debt Financing Impact on SaaS Company’s Valuation vs Equity Financing

00:27:55 Significance of Financial Forecasting in Your Revenue Growth

00:30:14 Learning the Financial Basics Through “The SaaS Academy”

00:33:49 CFO Perspective: The Way of Business

00:35:14 This Revenue Model is the King of Valuation

00:38:50 Importance of Forecasting To Prepare You in Times of Uncertainty

00:40:41 Everything Starts With the Fundamentals

Tweetable Quotes

“So I think that big piece is just translating the numbers into something operational and actionable.” - 00:33:55 Ben Murray

“We always have to look around the corner, what's coming up that we don't expect. I think forecasting is so important now.” - 00:27:49 Ben Murray

“Because I live and breathe numbers and spreadsheets and calculate 10, 15, 20 different SaaS metrics, but then trying to make that actionable for SaaS founders so they can understand it, so their executive teams can understand it.” - 00:33:16 Ben Murray

“I think you have to have that conservative forecast just to see the impact on your business.” - 00:39:27 Ben Murray

“So again, start with the fundamentals and build from there.” - 00:40:39 Ben Murray

SaaS Leadership Lessons

1. Be prepared. Have a conservative forecast to remain ready for unforeseen situations.

2. Know where to invest your capital and what the ROI will be. Don’t guess or hope.

3. Get the fundamentals in place and then start pulling in SaaS metrics that are relevant to your business.

4. Forecasting as often as your data is changing. There is no magic timeframe.

5.. Accounting foundation is key for potential investors, having clean, accurate books that are timely.

6. Know how to read and understand P&L, balance sheet, and cash flow as a founder.

7. Contracted subscription revenue is KING. Investors prefer contracted MRR over variable revenue streams.

8. Storytelling is important for raising capital. Numbers must support the story.

Guest Resources

Ben’s Facebook: https://www.facebook.com/drewdagostino

Ben’s LinkedIn: linkedin.com/in/benrmurray

Ben’s Twitter: BR_Murray

The SaaS CFO (Website):https://www.thesaascfo.com/

The SaaS Academy (Website): https://www.thesaasacademy.com/pages/about-us

The SaaS News (Website): https://www.thesaasnews.com/

The SaaS CFO Instagram: https://www.instagram.com/thesaasacademy

The SaaS CFO Twitter: https://twitter.com/TheSaaSCFO

The SaaS CFO LinkedIn: https://www.linkedin.com/company/thesaascfo/

The SaaS CFO Facebook: https://www.facebook.com/thesaascfo

Resources Mentioned

The SaaS CFO (Website): https://www.thesaascfo.com/

The SaaS Academy (Website): https://www.thesaasacademy.com/pages/about-us

The SaaS News (Website): https://www.thesaasnews.com/

US SBA (Website): https://www.sba.gov/

The Points Guy (Website): https://thepointsguy.com/

Episode Sponsor

Today’s episode is sponsored by Champion Leadership Group. Get free growth tools, and map out a growth plan to scale your SaaS business beyond $10M. Travel with fellow SaaS entrepreneurs on your growth journey using a proven methodology that is mentor-guided, results-focused, and peer-supported. Celebrate wins and quickly rebound from setbacks to achieve profitable growth, impact, and freedom. Unleash your SaaS growth at championleadership.com

Small Fish, Big Pond – https://smallfishbigpond.com/ Use the promo code ‘SaaSFuel’

Champion Leadership Group – https://championleadership.com/