A Detailed Guide to SaaS Operating Metrics

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A Detailed Guide to SaaS Operating Metrics
A Detailed Guide to SaaS Operating Metrics

Metrics, definitions, and use cases galore.

Metrics, definitions, and use cases galore.

Underscore VC

Whether you’re preparing to fundraise, you need to present a plan to your board, or you’re just trying to keep your team on track, financial planning provides an opportunity for you to take stock of where you’ve been and look ahead to where you want to go.

But for an early-stage startup, a detailed operating plan might feel too rigid. After all, things change quickly, and your plan may become outdated the day after you publish it. Despite that,

effective financial planning⁠

is an important aspect of building a durable business.

The question then becomes: What metrics should you track?

But first, as you map out your plan, consider the following guidelines (and

read this article for full details⁠

Think Big-Picture and Long-Term

You won’t know everything. But you’ll need a sketch of your long-term strategy and goals. For some startups, that could include planning two funding rounds ahead. Your investors will likely ask: What will you use this cash for?

Outline Key Milestones

Thinking back to your best lever of growth, what will be your

key milestones⁠

? This could include acquiring a certain number of customers, raising a round of fundraising, or making an acquisition.

Take Stock of Resources

Think about people, infrastructure, and data. What do your current resources offer? What do you want to accomplish in this next period? What additional resources will you need to do that? How much will that all cost?

Think Through Contingencies

Whether it’s a new competitor in the market, a sudden leadership departure, or a global pandemic, think through contingencies to strengthen your plan.

Track Comparables

Once you’ve outlined your plan, consider looking at comparables—companies with a similar business model in a similar space that have reached one of your milestones.

Select Your Metrics

Planning is all about becoming a master of your business. That includes a holistic view of its health, and metrics are the diagnostics of your business.

The dashboard below highlights key SaaS operating metrics to track, comparing plan to actuals.

SaaS Operating Metrics Dashboard (Actuals/Plan)

SaaS Operating Metrics Dashboard (Actuals/Plan)

Metric

(Metrics)

Q1 - Plan

Q1 - Actuals

Q2 - Plan

Q2 - Actuals 2

Q3 - Plan

Q3 - Actuals

Q4 - Plan

Q4 - Actuals

Bookings

Billings

Revenue

Subscription

Services

Cost of Sales

Subscription

Services

Gross Profit

Subscription

Services

Gross Margin %

Subscription

Services

Operating Expenses

R&D

Sales & Marketing

Sales

Marketing

G&A

Expenses (excluding CAPEX)

Operating Profit/Loss

EBITDA

Cash Balance

Average Monthly Burn Rate

Deferred Revenue

Capital Expenditures

Equipment Debt

Additional Debt

Total Payroll

Headcount

Product + R&D

Sales

Marketing

G&A

Other

Total

Customer Accounts

Existing

New

Churned

Total Customer Accounts

Customer Financials

Existing ARR

New ARR

Churned ARR

Expansion ARR

ARR Run Rate

⁠

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A Detailed Guide to SaaS Operating MetricsA Detailed Guide to SaaS Operating Metrics

A Detailed Guide to SaaS Operating Metrics
A Detailed Guide to SaaS Operating Metrics