Summary
In this episode, Sean talks about how to measure the early stage economics and financial performance of your B2B SaaS. He explains the importance of tracking revenue, expenses, and gross margin as a percentage of revenue. By doing so, you can identify where you need to make changes to improve profitability.
Key Points
- Track revenue, expenses, and gross margin as a percentage of revenue
- Use a spreadsheet to measure financial performance
- Calculate cost of goods sold to determine gross margin
- Aim for a gross margin percentage of 80% or higher
- Identify which levers you need to move to improve financial performance
- Incorporate all expenses into your calculations
- Focus on gross margin as the most important element to start with
Quotes
- “Take your revenue, subtract your cost of goods sold, take that out of revenue that’ll give you the gross margin number”
Free Resources
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