SaaS Salesforce Economics

SaaS Economics - Ramping a SaaS salesforce
Part 1: Model the ecomomics of a single sales person

Sales compensation and overhead
Base Compensation
Variable Compensation
Draw on Variable Comp
Productivity Ramp
Additional overhead
Sales attrition factor
On target annual bookings
Annual Bookings
Monthly Bookings (ACV)
Monthly Bookings (MRR)
$
$
$
$
50,000
55,000 with 50% draw for first four months
100%
70%
30%
10%
33%
66%
30,000
15% a factor to discount bookings to account
500,000 ACV (Annual Contract Value)

3,472 Billed monthly (=ACV / 12)
Churn Rate and Margin

Churn Rate (monthly)
Gross Margin
2.50%
80.00%
Cost of Leads required to feed sales

Average Deal Size
Deals to meet target
Leads to closed deal
Cost per Qualified Lead
Cost of Leads required
$6,000 (ACV) Annual Contract Value

6.9 per month
10
$125
8,698 per month, for 1 fully productive sales p
Other interesting Calculations

Lead Gen costs per deal
Selling costs per deal
Total CAC
Total LTV
$
$
$
$
1,253
1,620
2,873
16,000
Income
Productivity Ramp
Bookings (ACV)
New MRR added this month
MRR from prior months bookings
Churn
Total MRR (Billings)
Cumulative Billings
Cumulative Gross Profit
$
$
$
$
$
Excludes people costs

Excludes cost of sales management
Excludes people costs in marketing, and
Calculated by dividing average monthly
Month 1
10%
3,542 $
295 $
$
$
295 $
295 $
236 $
Month 2
33%
11,688
974
295
(7.38)
1,262
1,557
1,245
$
$
$
$
$
$
$
Month 3
66%
23,375
1,948
1,262
(31.54)
3,178
4,735
3,788
Expenses
Base Salary
Overhead
Cost of leads required
Total Expenses
Cumulative expenses
$
$
$
$
$
$
4,167
4,583
2,500
850
12,100
12,100
$
$
Month 1
(11,864) $
(11,864) $
Breakeven Analysis
Net profit
Cumulative Net Profit
$
$
$
$
$
$
4,167
3,208
2,500
2,806
12,681
24,781
$
$
$
$
$
$
Month 2
(11,671) $
(23,535) $
4,167
3,025
2,500
5,611
15,303
40,084
Month 3
(12,761)
(36,296)
Bookings & Churn - Single Sales Hire

$3,500
$3,000
$2,500
$2,000
Churn
$1,500
$1,000
$500
$$(500)
$(1,000)
Part 2: Look at the Overall Economics when Ramping Sales Hires

New Sales Hires
Total Sales Headcount
Total Leads Required
Income
Bookings (ACV)
Cumulative Billings
Growth in MRR
$
$
$
$
$
Month 1
2
2
14
Month 2
2
4
58
Month 3
2
6
148
Month 1
7,083
590
590
472
590
Month 2
30,458
3,114
3,704
2,963
2,523
Month 3
77,208
9,470
13,174
10,539
6,356
$
$
$
$
$
$
$
$
$
$
Expenses
Base Salary
Overhead
$
$
$
8,333 $
9,167 $
5,000 $
16,667 $
15,583 $
10,000 $
25,000
21,633
15,000

Total Expenses
Cumulative expenses
$
$
$
1,700 $
24,200 $
24,200 $
7,312 $
49,562 $
73,762 $
$
$
Month 1
(23,728) $
(23,728) $
Month 2
Month 3
(47,071) $
(72,592)
(70,799) $ (143,391)
Breakeven Analysis
Net profit
18,535
80,168
153,931
Net profit
$150,000
$100,000
$50,000
$$(50,000)
$(100,000)
$(150,000)
$(200,000)
$(250,000)

$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$-
Part 3: Look at the impact of collecting 1 year's payment in adva

Step 1: Individual Sales person
Income
Productivity Ramp
Bookings (ACV)
Month 1
10%
3,542 $
Month 2
33%
11,688 $
Month 3
66%
23,375
Renewable contract value

Churn
Renewals (renewable - churn)
Billings (bookings + renewals)
Cumulative Billings
$
$
$
3,542 $
3,542 $
2,833 $
11,688 $
15,229 $
12,183 $
23,375
38,604
30,883
$
$
Month 1
(9,267) $
(9,267) $
Month 2
(3,331) $
(12,598) $
Month 3
3,397
(9,201)
Breakeven Analysis
Net Cash Flows
Cumulative Net Cash Flows
Net Cash Flows

$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$$(5,000)
$(10,000)
$(15,000)
Step 2: Look at the Overall Economics when Ramping Sales Hires

Income
Month 1
Month 2
Month 3
Bookings (ACV)
Billings less churn (MRR)
Cumulative Billings
Growth in MRR
$
$
$
$
$
Breakeven Analysis
Net Cash Flows
$
$
7,083
7,083
7,083
5,667
7,083
$
$
$
$
$
Month 1
(6,434) $
(18,534) $
Net Cash Flows

$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
30,458
30,458
37,542
30,033
23,375
$
77,208
$
77,208
$ 114,750
$
91,800
$
46,750
Month 2
11,686 $
(19,529) $
Month 3
46,464
11,632
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$$(500,000)
Cells formated like this:
first four months

0%
100%
0%
100%
0%
100%
0%
100%
0%
100%
bookings to account for failed sales hires and attrition
act Value)
act Value)
Quick Marketing Calculation

50% amount of traffic that is organic vers
$1.50 cost per paid visitor (Google AdWord
$
0.75 Cost per visitor (both paid and unpai
3% visitors convert to raw leads
20% number of raw leads that turn into qu
act Value
1 qualified lead
5 raw leads required
167 visitors required
$125 Cost of visitors (also = Cost per qual
ly productive sales person
les management
sts in marketing, and sales management. (CAC= Cost to Acquire a Customer)
ing average monthly gross profit per customer (ARPU x Gross Margin ) by the churn rate
$
$
$
$
$
$
$
Month 4
100%
35,417
2,951
3,178
(79.45)
6,050
10,785
8,628
$
$
$
$
$
$
$
Month 5
100%
35,417
2,951
6,050
(151.25)
8,850
19,635
15,708
$
$
$
$
$
$
$
Month 6
100%
35,417
2,951
8,850
(221.25)
11,580
31,215
24,972
$
$
$
$
$
$
$
Month 7
100%
35,417
2,951
11,580
(289.51)
14,242
45,458
36,366
$
$
$
$
$
$
$
Month 8
100%
35,417
2,951
14,242
(356.05)
16,838
62,295
49,836
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
59,836
$
$
$
$
$
$
$
$
Month 4
(14,912) $
(51,208) $
4,167
4,583
2,500
8,502
19,752
79,589
$
$
$
$
$
$
Month 5
(12,672) $
(63,880) $
4,167
4,583
2,500
8,502
19,752
99,341
$
$
$
$
$
$
Month 6
(10,488) $
(74,368) $
4,167
4,583
2,500
8,502
19,752
119,093
$
$
$
$
$
$
Month 7
(8,358) $
(82,727) $
4,167
4,583
2,500
8,502
19,752
138,845
Month 8
(6,282)
(89,009)
MRR - Single Sales Hire

$30,000
$25,000
Churn
$20,000
this month
$15,000
MRR from prior months

bookings
$10,000
$5,000
$$(5,000)
ng Sales Hires
$
$
$
$
$
$
$
$
Month 4
2
8
284
Month 5
2
10
420
Month 6
2
12
555
Month 7
2
14
691
Month 8
2
16
827
Month 4
148,042
21,570
34,744
27,795
12,100
Month 5
218,875
39,270
74,014
59,211
17,700
Month 6
$
289,708
$
62,431
$ 136,445
$
109,156
$
23,161
Month 7
360,542
90,915
227,360
181,888
28,484
Month 8
431,375
124,590
351,951
281,560
33,675
$
$
$
$
$
33,333 $
30,800 $
20,000 $
41,667 $
39,967 $
25,000 $
50,000
49,133
30,000
$
$
$
$
$
$
$
$
58,333
58,300
35,000
$
$
$
$
$
$
$
$
66,667
67,467
40,000
$
$
$
35,539 $
119,673 $
273,603 $
52,544 $
69,548 $
159,177 $ 198,681 $
432,780 $
631,462 $
86,553 $
238,186 $
869,647 $
$
$
Month 4
(102,417) $
(245,808) $
Month 5
Month 6
(127,761) $ (148,737) $
(373,569) $ (522,306) $
Month 7
(165,454) $
(687,759) $
103,557
277,690
1,147,338
Month 8
(178,018)
(865,777)

$4,000,000
$-
$3,000,000
$(500,000)
$2,000,000
$(1,000,000)
$1,000,000
$(1,500,000)
$-
$(2,000,000)
$(1,000,000)
$(2,500,000)
$(2,000,000)
$(3,000,000)
$(3,000,000)
Growth in MRR
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$-
yment in advance
Month 4
100%
35,417 $
Month 5
100%
35,417 $
Month 6
100%
35,417 $
Month 7
100%
35,417 $
Month 8
100%
35,417
$
$
$
35,417 $
74,021 $
59,217 $
$
$
Month 4
8,581 $
(620) $
35,417 $
35,417 $
109,438 $ 144,854 $
87,550 $
115,883 $
Month 5
8,581 $
7,961 $
Month 6
8,581 $
16,543 $
35,417 $
180,271 $
144,217 $
Month 7
8,581 $
25,124 $
35,417
215,688
172,550
Month 8
8,581
33,705

$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$$(50,000)
$
$
$
$
$
$
$
Month 4
148,042
148,042
262,792
210,233
70,833
$
$
$
$
$
Month 5
218,875
218,875
481,667
385,333
70,833
Month 4
98,681 $
90,561 $
Month 6
$
289,708
$
289,708
$ 771,375
$
617,100
$
70,833
Month 5
155,348 $
226,156 $
$
$
$
$
$
Month 6
212,014 $
418,419 $
Month 7
360,542
360,542
1,131,917
905,533
70,833
$
$
$
$
$
Month 8
431,375
431,375
1,563,292
1,250,633
70,833
Month 7
268,681 $
667,347 $
Month 8
325,348
972,943

$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$$(5,000,000)
are input variables
0%
100%
t of traffic that is organic versus paid

r paid visitor (Google AdWords, etc.)
er visitor (both paid and unpaid)
convert to raw leads
r of raw leads that turn into qualified leads
ds required
visitors (also = Cost per qualified lead)
hurn rate
$
$
$
$
$
$
$
Month 9
100%
35,417
2,951
16,838
(420.94)
19,368
81,663
65,330
$
$
$
$
$
$
$
Month 10
100%
35,417
2,951
19,368
(484.20)
21,835
103,498
82,799
$
$
$
$
$
$
$
Month 11
100%
35,417
2,951
21,835
(545.88)
24,241
127,739
102,191
$
$
$
$
$
$
$
Month 12
100%
35,417
2,951
24,241
(606.02)
26,586
154,325
123,460
$
$
$
$
$
$
$
Month 13
100%
35,417
2,951
26,586
(664.65)
28,873
183,198
146,558
$
$
$
$
$
$
4,167 $
4,583 $
2,500 $
8,502 $
19,752 $
158,597 $
4,167
4,583
2,500
8,502
19,752
178,350
$
$
$
$
$
$
$
$
Month 9
(4,258) $
(93,267) $
Month 10
(2,284) $
(95,551) $
4,167
4,583
2,500
8,502
19,752
198,102
$
$
$
$
$
$
Month 11
(360) $
(95,911) $
4,167
4,583
2,500
8,502
19,752
217,854
$
$
$
$
$
$
Month 12
1,517 $
(94,394) $
4,167
4,583
2,500
8,502
19,752
237,606
Month 13
3,346
(91,048)
MRR Versus Expenses

$30,000
$25,000
$20,000
prior months
added this month
$15,000
Axis Title
Total Expenses
$10,000
$5,000
$-
$
$
$
$
$
$
$
$
Month 9
2
18
963
Month 10
2
20
1,098
Month 11
2
22
1,234
Month 12
2
24
1,370
Month 13
2
26
1,506
Month 9
502,208
163,326
515,277
412,221
38,736
Month 10
573,042
206,997
722,273
577,819
43,670
Month 11
643,875
255,478
977,751
782,201
48,481
Month 12
714,708
308,650
1,286,401
1,029,121
53,172
Month 13
785,542
366,396
1,652,797
1,322,237
57,746
75,000
76,633
45,000
$
$
$
$
$
$
$
$
83,333
85,800
50,000
$
$
$
$
$
$
$
$
91,667
94,967
55,000
$
$
$
$
$
$
$
$
100,000
104,133
60,000
$
$
$
$
$
$
$
$
108,333
113,300
65,000
$
$
$
120,561 $
317,195 $
1,464,532 $
137,566 $
356,699 $
1,821,232 $
154,570 $
396,204 $
2,217,435 $
171,575 $
435,708 $
2,653,143 $
$
$
Month 9
(186,534) $
(1,052,311) $
Month 10
(191,102) $
(1,243,413) $
Month 11
(191,821) $
(1,435,234) $
Month 12
(188,788) $
(1,624,022) $
188,579
475,212
3,128,356
Month 13
(182,096)
(1,806,118)

$4,000,000
$3,000,000
$2,000,000
$1,000,000
$$(1,000,000)
$(2,000,000)
$(3,000,000)
Month 9
100%
35,417 $
Month 10
100%
35,417 $
Month 11
100%
35,417 $
Month 12
100%
35,417 $
Month 13
100%
35,417
$
$
$
35,417 $
251,104 $
200,883 $
35,417 $
286,521 $
229,217 $
$
$
$
35,417 $
321,938 $
257,550 $
$
$
Month 9
8,581 $
42,286 $
Month 10
8,581 $
50,867 $
Month 11
8,581 $
59,448 $
Flows
lows
3,542
(1,062.50)
2,479
37,896
359,833
287,867
$
$
$
$
$
$
11,688
(3,506.25)
8,181
43,598
403,431
322,745
Month 12
10,564 $
70,013 $
Month 13
15,126
85,139
Cashflow comparison - monthly payments vs year in a

$40,000
$30,000
Net profit
$20,000
Net Cash Flows

Axis Title
$10,000
$$(10,000)
$(20,000)
$
$
$
$
$
$
$
Month 9
502,208
502,208
2,065,500
1,652,400
70,833
$
$
$
$
$
Month 9
382,014 $
1,335,205 $
Month 10
573,042
573,042
2,638,542
2,110,833
70,833
$
$
$
$
$
Month 10
438,681 $
1,754,134 $
Month 11
643,875
643,875
3,282,417
2,625,933
70,833
$
$
$
$
$
Month 11
495,348 $
2,229,730 $
Month 12
714,708
714,708
3,997,125
3,197,700
70,833
$
$
$
$
$
Month 13
785,542
787,667
4,784,792
3,827,833
72,958
Month 12
552,014 $
2,761,992 $
Month 13
610,381
3,352,621
Cashflow comparison - monthly payments vs year in ad

$2,500,000
$2,000,000
$1,500,000
Axis Title
$1,000,000
$500,000
Net profit
Net Cash Flows
$2,500,000
$2,000,000
$1,500,000
Axis Title
$1,000,000
$500,000
$$(500,000)
Net profit
Net Cash Flows
$
$
$
$
$
$
$
Month 14
100%
35,417
2,951
28,873
(721.82)
31,102
214,300
171,440
$
$
$
$
$
$
$
Month 15
100%
35,417
2,951
31,102
(777.56)
33,276
247,576
198,061
$
$
$
$
$
$
$
Month 16
100%
35,417
2,951
33,276
(831.90)
35,396
282,972
226,378
$
$
$
$
$
$
$
Month 17
100%
35,417
2,951
35,396
(884.89)
37,462
320,434
256,347
$
$
$
$
$
$
$
Month 18
100%
35,417
2,951
37,462
(936.55)
39,477
359,911
287,929
$
$
$
$
$
$
4,167 $
4,583 $
2,500 $
8,502 $
19,752 $
257,358 $
4,167
4,583
2,500
8,502
19,752
277,111
$
$
$
$
$
$
$
$
Month 14
5,130 $
(85,918) $
Month 15
6,869 $
(79,050) $
4,167
4,583
2,500
8,502
19,752
296,863
$
$
$
$
$
$
Month 16
8,564 $
(70,485) $
4,167
4,583
2,500
8,502
19,752
316,615
$
$
$
$
$
$
Month 17
10,218 $
(60,268) $
4,167
4,583
2,500
8,502
19,752
336,367
Month 18
11,829
(48,438)
Net profit - New Sales Hire

$25,000
$20,000
$15,000
Total Expenses
$10,000
$5,000
$$(5,000)
$(10,000)
$(15,000)
$(20,000)
$
$
$
$
$
$
$
$
Month 14
2
28
1,641
Month 15
2
30
1,777
Month 16
2
32
1,913
Month 17
2
34
2,049
Month 18
2
36
2,184
Month 14
856,375
428,600
2,081,397
1,665,118
62,205
Month 15
927,208
495,153
2,576,550
2,061,240
66,552
Month 16
998,042
565,944
3,142,493
2,513,995
70,791
Month 17
1,068,875
640,868
3,783,362
3,026,689
74,924
Month 18
1,139,708
719,822
4,503,184
3,602,547
78,954
116,667
122,467
70,000
$
$
$
$
$
$
$
$
125,000
131,633
75,000
$
$
$
$
$
$
$
$
$
$
$
$
$
133,333 $
140,800 $
80,000 $
$
$
$
$
$
141,667 $
149,967 $
85,000 $
150,000
159,133
90,000
$
$
$
205,584 $
514,717 $
3,643,072 $
222,588 $
554,221 $
4,197,294 $
239,592 $
593,726 $
4,791,019 $
256,597 $
633,230 $
5,424,250 $
273,601
672,735
6,096,984
$
$
Month 14
(171,837) $
(1,977,955) $
Month 15
(158,099) $
(2,136,054) $
Month 16
(140,971) $
(2,277,025) $
Month 17
(120,536) $
(2,397,560) $
Month 18
(96,877)
(2,494,437)
Month 14
100%
35,417 $
Month 15
100%
35,417 $
Month 16
100%
35,417 $
Month 17
100%
35,417 $
Month 18
100%
35,417
$
$
$
$
$
$
$
$
23,375
(7,012.50)
16,363
51,779
455,210
364,168
$
$
$
$
$
$
Month 14
21,671 $
106,810 $
35,417
(10,625.00)
24,792
60,208
515,419
412,335
$
$
$
$
$
$
Month 15
28,414 $
135,224 $
35,417
(10,625.00)
24,792
60,208
575,627
460,502
$
$
$
$
$
$
35,417
(10,625.00)
24,792
60,208
635,835
508,668
Month 16
28,414 $
163,639 $
$
$
$
$
$
$
35,417
(10,625.00)
24,792
60,208
696,044
556,835
Month 17
28,414 $
192,053 $
Month 18
28,414
220,468
yments vs year in advance Cumulative Cashflow comparision - monthly payments vs yea

$500,000
$400,000
Net profit
Net Cash Flows
Axis Title
$300,000
$200,000
$100,000
$$(100,000)
$(200,000)
$
$
$
$
$
$
$
Month 14
856,375
865,513
5,650,304
4,520,243
77,846
$
$
$
$
$
Month 14
672,658 $
4,005,526 $
Month 15
927,208
950,371
6,600,675
5,280,540
84,858
Month 15
740,544 $
4,726,319 $
ments vs year in advance
Net profit
Net Cash Flows
$
$
$
$
$
Month 16
998,042
1,042,454
7,643,129
6,114,503
92,083
$
$
$
$
$
Month 16
814,211 $
5,520,778 $
Month 17
1,068,875
1,134,538
8,777,667
7,022,133
92,083
$
$
$
$
$
Month 18
1,139,708
1,226,621
10,004,288
8,003,430
92,083
Month 17
887,878 $
6,388,903 $
Month 18
961,544
7,330,695
Cumulative Cashflow comparision - monthly payments

$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
Axis Title $15,000,000
$10,000,000
Cumulative Net Pr
Cumulative Net C
Net profit
Net Cash Flows
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$10,000,000
$5,000,000
$$(5,000,000)
Cumulative Net Pr
Cumulative Net C
$
$
$
$
$
$
$
Month 19
100%
35,417
2,951
39,477
(986.92)
41,441
401,353
321,082
$
$
$
$
$
$
$
Month 20
100%
35,417
2,951
41,441
(1,036.04)
43,357
444,709
355,767
$
$
$
$
$
$
$
Month 21
100%
35,417
2,951
43,357
(1,083.92)
45,224
489,934
391,947
$
$
$
$
$
$
$
Month 22
100%
35,417
2,951
45,224
(1,130.61)
47,045
536,979
429,583
$
$
$
$
$
$
$
Month 23
100%
35,417
2,951
47,045
(1,176.13)
48,820
585,799
468,639
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
356,119
$
$
$
$
$
$
$
$
Month 19
13,401 $
(35,037) $
4,167
4,583
2,500
8,502
19,752
375,872
$
$
$
$
$
$
Month 20
14,933 $
(20,104) $
4,167
4,583
2,500
8,502
19,752
395,624
$
$
$
$
$
$
Month 21
16,427 $
(3,677) $
4,167
4,583
2,500
8,502
19,752
415,376
$
$
$
$
$
$
Month 22
17,884 $
14,207 $
4,167
4,583
2,500
8,502
19,752
435,128
Month 23
19,304
33,511
Cumulative Net Profit - New Sales Hire
$500,000
$400,000
$300,000
$200,000
$100,000
$$(100,000)
$(200,000)
$
$
$
$
$
$
$
$
Month 19
2
38
2,320
Month 20
2
40
2,456
Month 21
2
42
2,592
Month 22
2
44
2,727
Month 23
2
46
2,863
Month 19
1,210,542
802,705
5,305,889
4,244,711
82,883
Month 20
1,281,375
889,419
6,195,308
4,956,246
86,714
Month 21
1,352,208
979,867
7,175,175
5,740,140
90,449
Month 22
1,423,042
1,073,957
8,249,132
6,599,306
94,090
Month 23
1,493,875
1,171,598
9,420,731
7,536,584
97,641
$
$
$
$
$
158,333 $
168,300 $
95,000 $
$
$
$
$
$
166,667 $
177,467 $
100,000 $
$
$
$
$
$
175,000 $
186,633 $
105,000 $
$
$
$
$
$
183,333 $
195,800 $
110,000 $
191,667
204,967
115,000
$
$
$
290,606 $
712,239 $
6,809,223 $
307,610 $
751,743 $
7,560,967 $
324,615 $
791,248 $
8,352,214 $
341,619 $
830,752 $
9,182,967 $
358,623
870,257
10,053,223
$
$
Month 19
(70,075) $
(2,564,512) $
Month 20
(40,208) $
(2,604,720) $
Month 21
(7,354) $
(2,612,074) $
Month 22
28,414 $
(2,583,661) $
Month 23
67,022
(2,516,639)
Month 19
100%
35,417 $
Month 20
100%
35,417 $
Month 21
100%
35,417 $
Month 22
100%
35,417 $
Month 23
100%
35,417
$
$
$
$
$
$
$
$
35,417
(10,625.00)
24,792
60,208
756,252
605,002
$
$
$
$
$
$
Month 19
28,414 $
248,882 $
35,417
(10,625.00)
24,792
60,208
816,460
653,168
$
$
$
$
$
$
Month 20
28,414 $
277,297 $
35,417
(10,625.00)
24,792
60,208
876,669
701,335
$
$
$
$
$
$
Month 21
28,414 $
305,711 $
35,417
(10,625.00)
24,792
60,208
936,877
749,502
$
$
$
$
$
$
35,417
(10,625.00)
24,792
60,208
997,085
797,668
Month 22
28,414 $
334,126 $
Month 23
28,414
362,540
hly payments vs year in advance

$
$
$
$
$
$
$
Month 19
1,210,542
1,318,704
11,322,992
9,058,393
92,083
$
$
$
$
$
Month 19
1,035,211 $
8,346,154 $
Month 20
1,281,375
1,410,788
12,733,779
10,187,023
92,083
Month 20
1,108,878 $
9,435,280 $
monthly payments vs year in advance

$
$
$
$
$
Month 21
1,352,208
1,502,871
14,236,650
11,389,320
92,083
$
$
$
$
$
Month 21
1,182,544 $
10,598,072 $
Month 22
1,423,042
1,594,954
15,831,604
12,665,283
92,083
$
$
$
$
$
Month 23
1,493,875
1,687,038
17,518,642
14,014,913
92,083
Month 22
1,256,211 $
11,834,531 $
Month 23
1,329,878
13,144,657

$
$
$
$
$
$
$
Month 24
100%
35,417
2,951
48,820
(1,220.51)
50,551
636,350
509,080
$
$
$
$
$
$
$
Month 25
100%
35,417
2,951
50,551
(1,263.78)
52,239
688,589
550,871
$
$
$
$
$
$
$
Month 26
100%
35,417
2,951
52,239
(1,305.97)
53,884
742,473
593,979
$
$
$
$
$
$
$
Month 27
100%
35,417
2,951
53,884
(1,347.11)
55,489
797,962
638,369
$
$
$
$
$
$
$
Month 28
100%
35,417
2,951
55,489
(1,387.21)
57,053
855,014
684,012
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
454,881
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
474,633
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
494,385
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
514,137
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
533,889
$
$
Month 24
20,689 $
54,200 $
Month 25
22,039 $
76,238 $
Month 26
23,355 $
99,594 $
Month 27
24,639 $
124,232 $
Month 28
25,890
150,122
Month 24
2
48
2,999
Month 25
2
50
3,135
Month 26
2
52
3,271
Month 27
2
54
3,406
Month 28
2
56
3,542
Month 24
1,564,708
1,272,700
10,693,431
8,554,745
101,102
Month 25
1,635,542
1,377,178
12,070,609
9,656,487
104,478
Month 26
1,706,375
1,484,947
13,555,556
10,844,445
107,768
Month 27
1,777,208
1,595,924
15,151,479
12,121,183
110,977
Month 28
1,848,042
1,710,029
16,861,508
13,489,207
114,105
Hire
$
$
$
$
$
$
$
$
$
$
$
$
$
200,000 $
214,133 $
120,000 $
$
$
$
$
$
208,333 $
223,300 $
125,000 $
$
$
$
$
$
216,667 $
232,467 $
130,000 $
$
$
$
$
$
225,000 $
241,633 $
135,000 $
233,333
250,800
140,000
$
$
$
375,628 $
909,761 $
10,962,984 $
392,632 $
949,266 $
11,912,250 $
409,637 $
988,770 $
12,901,020 $
426,641 $
1,028,274 $
13,929,294 $
443,646
1,067,779
14,997,073
$
$
Month 24
108,399 $
(2,408,240) $
Month 25
152,477 $
(2,255,763) $
Month 26
199,187 $
(2,056,575) $
Month 27
248,464 $
(1,808,111) $
Month 28
300,244
(1,507,867)
Month 24
100%
35,417 $
Month 25
100%
35,417 $
Month 26
100%
35,417 $
Month 27
100%
35,417 $
Month 28
100%
35,417
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
35,417
(10,625.00)
24,792
60,208
1,057,294
845,835
$
$
$
$
$
$
Month 24
28,414 $
390,954 $
Month 24
1,564,708
1,779,121
19,297,763
15,438,210
92,083
$
$
$
$
$
Month 24
1,403,544 $
14,528,449 $
37,896
(11,368.75)
26,527
61,944
1,119,238
895,390
$
$
$
$
$
$
Month 25
29,803 $
420,757 $
Month 25
1,635,542
1,871,842
21,169,604
16,935,683
92,721
$
$
$
$
$
Month 25
1,477,721 $
15,986,418 $
43,598
(13,079.38)
30,519
65,935
1,185,173
948,138
$
$
$
$
$
$
Month 26
32,996 $
453,753 $
Month 26
1,706,375
1,966,029
23,135,633
18,508,506
94,187
$
$
$
$
$
Month 26
1,553,071 $
17,519,736 $
51,779
(15,533.75)
36,245
71,662
1,256,835
1,005,468
$
$
$
$
$
$
60,208
(18,062.50)
42,146
77,563
1,334,397
1,067,518
Month 27
37,577 $
491,331 $
Month 28
42,298
533,628
Month 27
1,777,208
2,062,320
25,197,953
20,158,362
96,291
$
$
$
$
$
Month 28
1,848,042
2,160,778
27,358,730
21,886,984
98,458
Month 27
1,630,103 $
19,130,088 $
Month 28
1,708,870
20,819,205
$
$
$
$
$
$
$
Month 29
100%
35,417
2,951
57,053
(1,426.32)
58,578
913,592
730,874
$
$
$
$
$
$
$
Month 30
100%
35,417
2,951
58,578
(1,464.44)
60,065
973,657
778,926
$
$
$
$
$
$
$
Month 31
100%
35,417
2,951
60,065
(1,501.62)
61,514
1,035,171
828,137
$
$
$
$
$
$
$
Month 32
100%
35,417
2,951
61,514
(1,537.86)
62,928
1,098,099
878,480
$
$
$
$
$
$
$
Month 33
100%
35,417
2,951
62,928
(1,573.20)
64,306
1,162,406
929,925
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
553,642
$
$
Month 29
27,110 $
177,232 $
Month 30
28,300 $
205,532 $
Month 31
29,459 $
234,991 $
Month 32
30,590 $
265,581 $
Month 33
31,693
297,274
Month 29
2
58
3,678
Month 30
2
60
3,814
Month 31
2
62
3,949
Month 32
2
64
4,085
Month 33
2
66
4,221
Month 29
1,918,875
1,827,185
18,688,693
14,950,954
117,156
Month 30
1,989,708
1,947,314
20,636,007
16,508,805
120,129
Month 31
2,060,542
2,070,343
22,706,350
18,165,080
123,029
Month 32
2,131,375
2,196,199
24,902,549
19,922,039
125,856
Month 33
2,202,208
2,324,811
27,227,360
21,781,888
128,612
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
241,667 $
259,967 $
145,000 $
4,167
4,583
2,500
8,502
19,752
573,394
$
$
$
$
$
$
$
$
$
$
$
250,000 $
269,133 $
150,000 $
4,167
4,583
2,500
8,502
19,752
593,146
$
$
$
$
$
$
$
$
$
$
$
258,333 $
278,300 $
155,000 $
4,167
4,583
2,500
8,502
19,752
612,898
$
$
$
$
$
$
$
$
$
$
$
266,667 $
287,467 $
160,000 $
4,167
4,583
2,500
8,502
19,752
632,650
275,000
296,633
165,000
$
$
$
460,650 $
1,107,283 $
16,104,357 $
477,654 $
1,146,788 $
17,251,144 $
494,659 $
1,186,292 $
18,437,436 $
511,663 $
1,225,797 $
19,663,233 $
528,668
1,265,301
20,928,534
$
$
Month 29
354,464 $
(1,153,402) $
Month 30
411,063 $
(742,339) $
Month 31
469,982 $
(272,357) $
Month 32
531,163 $
258,806 $
Month 33
594,548
853,354
Month 29
100%
35,417 $
Month 30
100%
35,417 $
Month 31
100%
35,417 $
Month 32
100%
35,417 $
Month 33
100%
35,417
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
60,208
(18,062.50)
42,146
77,563
1,411,960
1,129,568
$
$
$
$
$
$
Month 29
42,298 $
575,926 $
Month 29
1,918,875
2,259,236
29,617,967
23,694,373
98,458
$
$
$
$
$
Month 29
1,787,637 $
22,587,090 $
60,208
(18,062.50)
42,146
77,563
1,489,522
1,191,618
$
$
$
$
$
$
Month 30
42,298 $
618,224 $
Month 30
1,989,708
2,357,695
31,975,661
25,580,529
98,458
$
$
$
$
$
Month 30
1,866,403 $
24,433,741 $
60,208
(18,062.50)
42,146
77,563
1,567,085
1,253,668
$
$
$
$
$
$
Month 31
42,298 $
660,522 $
Month 31
2,060,542
2,456,153
34,431,814
27,545,451
98,458
$
$
$
$
$
Month 31
1,945,170 $
26,359,159 $
60,208
(18,062.50)
42,146
77,563
1,644,647
1,315,718
$
$
$
$
$
$
60,208
(18,062.50)
42,146
77,563
1,722,210
1,377,768
Month 32
42,298 $
702,820 $
Month 33
42,298
745,117
Month 32
2,131,375
2,554,611
36,986,425
29,589,140
98,458
$
$
$
$
$
Month 33
2,202,208
2,653,070
39,639,495
31,711,596
98,458
Month 32
2,023,937 $
28,363,344 $
Month 33
2,102,703
30,446,295
$
$
$
$
$
$
$
Month 34
100%
35,417
2,951
64,306
(1,607.65)
65,650
1,228,056
982,444
$
$
$
$
$
$
$
Month 35
100%
35,417
2,951
65,650
(1,641.25)
66,960
1,295,016
1,036,013
$
$
$
$
$
$
$
Month 36
100%
35,417
2,951
66,960
(1,674.00)
68,237
1,363,253
1,090,602
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
652,403
$
$
Month 34
32,768 $
330,042 $
Month 35
33,816 $
363,858 $
Month 36
34,838
398,695
Month 34
2
68
4,357
Month 35
2
70
4,492
Month 36
2
72
4,628
Month 34
2,273,042
2,456,111
29,683,471
23,746,777
131,300
Month 35
2,343,875
2,590,031
32,273,502
25,818,802
133,920
Month 36
2,414,708
2,726,506
35,000,008
28,000,007
136,475
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
283,333 $
305,800 $
170,000 $
4,167
4,583
2,500
8,502
19,752
672,155
$
$
$
$
$
$
$
$
$
$
$
291,667 $
314,967 $
175,000 $
4,167
4,583
2,500
8,502
19,752
691,907
300,000
324,133
180,000
$
$
$
545,672 $
1,304,805 $
22,233,339 $
562,676 $
1,344,310 $
23,577,649 $
579,681
1,383,814
24,961,463
$
$
Month 34
660,084 $
1,513,438 $
Month 35
727,715 $
2,241,153 $
Month 36
797,391
3,038,543
Month 34
100%
35,417 $
Month 35
100%
35,417 $
Month 36
100%
35,417
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
60,208
(18,062.50)
42,146
77,563
1,799,772
1,439,818
$
$
$
$
$
$
Month 34
42,298 $
787,415 $
Month 34
2,273,042
2,751,528
42,391,023
33,912,818
98,458
$
$
$
$
$
Month 34
2,181,470 $
32,608,013 $
60,208
(18,062.50)
42,146
77,563
1,877,335
1,501,868
$
$
$
$
$
$
60,208
(18,062.50)
42,146
77,563
1,954,897
1,563,918
Month 35
42,298 $
829,713 $
Month 36
42,298
872,011
Month 35
2,343,875
2,849,986
45,241,009
36,192,807
98,458
$
$
$
$
$
Month 36
2,414,708
2,948,445
48,189,454
38,551,563
98,458
Month 35
2,260,237 $
34,848,498 $
Month 36
2,339,003
37,167,749
Comparison of hiring 1 versus 2 sales people per mon
Data for hiring 1 sales person per month

Month 1
1
Month 2
1
Month 3
1
Month 4
1
Month 1
1
Month 2
1
1
Month 3
1
1
1
Month 4
1
1
1
1
1
7
2
29
3
74
4
142
$
$
$
$
$
Month 1
3,542
295
295
236
295
$
$
$
$
$
Month 2
15,229
1,557
1,852
1,482
1,262
$
$
$
$
$
Month 3
38,604
4,735
6,587
5,270
3,178
$
$
$
$
$
Month 4
74,021
10,785
17,372
13,898
6,050
Base Salary
Overhead
Total Expenses
Cumulative expenses
$
$
$
$
$
$
4,167
4,583
2,500
850
12,100
12,100
$
$
$
$
$
$
8,333
7,792
5,000
3,656
24,781
36,881
$
$
$
$
$
$
12,500
10,817
7,500
9,267
40,084
76,965
$
$
$
$
$
$
16,667
15,400
10,000
17,770
59,836
136,802
Breakeven Analysis
Month 1
$ (11,864) $
$ (11,864) $
New Sales Hires

No of Salespeople at
each stage in lifecycle
1st month
2nd month
3rd month
4th month
5th month
6th month
7th month
4th month
4th month
10th month & Beyond
Income
Bookings (ACV)
Cumulative Billings
Growth in MRR
Expenses
Net profit
Graphing Data
Month 2
(23,535) $
(35,400) $
Month 3
Month 4
(36,296) $
(51,208)
(71,696) $ (122,904)
MRR
$
$
Month 1
295 $
590 $
Month 2
1,557 $
3,114 $
Month 3
4,735 $
9,470 $
Month 4
10,785
21,570
1 sales hire a month

2 sales hires a month
$
$
Month 1
295 $
590 $
Month 2
1,262 $
2,523 $
Month 3
3,178 $
6,356 $
Month 4
6,050
12,100
Net Profit
Month 1
$ (11,864) $
$ (23,728) $
Month 2
(23,535) $
(47,071) $
Month 3
Month 4
(36,296) $
(51,208)
(72,592) $ (102,417)
Month 1
$ (11,864) $
$ (23,728) $
Month 2
Month 3
Month 4
(35,400) $
(71,696) $ (122,904)
(70,799) $ (143,391) $ (245,808)

Growth in MRR


MRR
$3,000,000
$2,500,000
$2,000,000
$1,500,000
Axis Title
$1,000,000
$500,000
$-

ple per month
Month 5
1
Month 6
1
Month 7
1
Month 8
1
Month 9
1
Month 5
1
1
1
1
1
Month 6
1
1
1
1
1
1
Month 7
1
1
1
1
1
1
1
Month 8
1
1
1
1
1
1
1
1
Month 9
1
1
1
1
1
1
1
1
1
5
210
6
278
7
346
8
413
9
481
$
$
$
$
$
Month 5
109,438
19,635
37,007
29,606
8,850
$
$
$
$
$
Month 6
144,854
31,215
68,223
54,578
11,580
$
$
$
$
$
Month 7
180,271
45,458
113,680
90,944
14,242
$
$
$
$
$
Month 8
215,688
62,295
175,975
140,780
16,838
$
$
$
$
$
Month 9
251,104
81,663
257,638
206,111
19,368
$
$
$
$
$
$
20,833
19,983
12,500
26,272
79,589
216,390
$
$
$
$
$
$
25,000
24,567
15,000
34,774
99,341
315,731
$
$
$
$
$
$
29,167
29,150
17,500
43,276
119,093
434,824
$
$
$
$
$
$
33,333
33,733
20,000
51,778
138,845
573,669
$
$
$
$
$
$
37,500
38,317
22,500
60,281
158,597
732,266
Month 5
Month 6
$
(63,880) $
(74,368) $
$ (186,784) $ (261,153) $
Month 7
(82,727) $
(343,880) $
Month 8
(89,009) $
(432,889) $
Month 9
(93,267)
(526,155)
$
$
Month 5
19,635 $
39,270 $
Month 6
31,215 $
62,431 $
Month 7
45,458 $
90,915 $
Month 8
62,295 $
124,590 $
Month 9
81,663
163,326
$
$
Month 5
8,850 $
17,700 $
Month 6
11,580 $
23,161 $
Month 7
14,242 $
28,484 $
Month 8
16,838 $
33,675 $
Month 9
19,368
38,736
Month 5
Month 6
$
(63,880) $
(74,368) $
$ (127,761) $ (148,737) $
Month 7
(82,727) $
(165,454) $
Month 8
(89,009) $
(178,018) $
Month 9
(93,267)
(186,534)
Month 5
Month 6
$ (186,784) $ (261,153) $
$ (373,569) $ (522,306) $
Month 7
(343,880) $
(687,759) $
Month 8
Month 9
(432,889) $
(526,155)
(865,777) $ (1,052,311)
MRR Growth
a month
a month
Axis Title
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$-

Month 10
1
Month 11
1
Month 12
1
Month 13
1
Month 14
1
Month 10
1
1
1
1
1
1
1
1
1
1
10
549
Month 11
1
1
1
1
1
1
1
1
1
2
11
617
Month 12
1
1
1
1
1
1
1
1
1
3
12
685
Month 13
1
1
1
1
1
1
1
1
1
4
13
753
Month 14
1
1
1
1
1
1
1
1
1
5
14
821
$
$
$
$
$
Month 10
286,521
103,498
361,137
288,909
21,835
$
$
$
$
$
Month 11
321,938
127,739
488,876
391,101
24,241
Month 12
357,354
154,325
643,201
514,560
26,586
Month 13
392,771
183,198
826,398
661,119
28,873
$
$
$
$
$
Month 14
428,188
214,300
1,040,698
832,559
31,102
$
$
$
$
$
$
41,667
42,900
25,000
68,783
178,350
910,616
$
$
$
$
$
$
$
$
$
$
$
$
58,333
61,233
35,000
102,792
257,358
1,821,536
$
$
Month 10
(95,551) $
(621,706) $
45,833
47,483
27,500
77,285
198,102
1,108,718
$
$
$
$
$
$
$
$
$
$
$
Month 11
(95,911) $
(717,617) $
50,000
52,067
30,000
85,787
217,854
1,326,572
$
$
$
$
$
$
$
$
$
$
$
Month 12
(94,394) $
(812,011) $
54,167
56,650
32,500
94,290
237,606
1,564,178
Month 13
(91,048) $
(903,059) $
Month 14
(85,918)
(988,977)
$
$
Month 10
103,498 $
206,997 $
Month 11
127,739 $
255,478 $
Month 12
154,325 $
308,650 $
Month 13
183,198 $
366,396 $
Month 14
214,300
428,600
$
$
Month 10
21,835 $
43,670 $
Month 11
24,241 $
48,481 $
Month 12
26,586 $
53,172 $
Month 13
28,873 $
57,746 $
Month 14
31,102
62,205
$
$
Month 10
(95,551) $
(191,102) $
Month 11
(95,911) $
(191,821) $
Month 12
(94,394) $
(188,788) $
Month 13
(91,048) $
(182,096) $
Month 14
(85,918)
(171,837)
Month 10
Month 11
Month 12
Month 13
Month 14
$
(621,706) $
(717,617) $
(812,011) $
(903,059) $
(988,977)
$ (1,243,413) $ (1,435,234) $ (1,624,022) $ (1,806,118) $ (1,977,955)
Net Profit
$1,000,000
$800,000

Axis Title
$600,000
1 sales hire a mont
$400,000
2 sales hires a mon
$200,000
$$(200,000)
$(400,000)
Month 15
1
Month 16
1
Month 17
1
Month 18
1
Month 19
1
Month 15
1
1
1
1
1
1
1
1
1
6
15
889
Month 16
1
1
1
1
1
1
1
1
1
7
16
956
Month 17
1
1
1
1
1
1
1
1
1
8
17
1,024
Month 18
1
1
1
1
1
1
1
1
1
9
18
1,092
Month 19
1
1
1
1
1
1
1
1
1
10
19
1,160
$
$
$
$
$
Month 15
463,604
247,576
1,288,275
1,030,620
33,276
$
$
$
$
$
Month 16
499,021
282,972
1,571,247
1,256,997
35,396
$
$
$
$
$
Month 17
534,438
320,434
1,891,681
1,513,345
37,462
$
$
$
$
$
Month 18
569,854
359,911
2,251,592
1,801,274
39,477
$
$
$
$
$
Month 19
605,271
401,353
2,652,945
2,122,356
41,441
$
$
$
$
$
$
62,500
65,817
37,500
111,294
277,111
2,098,647
$
$
$
$
$
$
66,667
70,400
40,000
119,796
296,863
2,395,510
$
$
$
$
$
$
70,833
74,983
42,500
128,298
316,615
2,712,125
$
$
$
$
$
$
75,000
79,567
45,000
136,801
336,367
3,048,492
$
$
$
$
$
$
79,167
84,150
47,500
145,303
356,119
3,404,612
Month 15
Month 16
Month 17
Month 18
Month 19
$
(79,050) $
(70,485) $
(60,268) $
(48,438) $
(35,037)
$ (1,068,027) $ (1,138,512) $ (1,198,780) $ (1,247,219) $ (1,282,256)
$
$
Month 15
247,576 $
495,153 $
Month 16
282,972 $
565,944 $
Month 17
320,434 $
640,868 $
Month 18
359,911 $
719,822 $
Month 19
401,353
802,705
$
$
Month 15
33,276 $
66,552 $
Month 16
35,396 $
70,791 $
Month 17
37,462 $
74,924 $
Month 18
39,477 $
78,954 $
Month 19
41,441
82,883
$
$
Month 15
(79,050) $
(158,099) $
Month 16
(70,485) $
(140,971) $
Month 17
(60,268) $
(120,536) $
Month 18
(48,438) $
(96,877) $
Month 19
(35,037)
(70,075)
Month 15
Month 16
Month 17
Month 18
Month 19
$ (1,068,027) $ (1,138,512) $ (1,198,780) $ (1,247,219) $ (1,282,256)
$ (2,136,054) $ (2,277,025) $ (2,397,560) $ (2,494,437) $ (2,564,512)

$4,000,000
$3,000,000
Axis Title
$2,000,000
1 sales hire a
$1,000,000
2 sales hires
$$(1,000,000)
$(2,000,000)
$(3,000,000)
Month 20
1
Month 21
1
Month 22
1
Month 23
1
Month 24
1
Month 20
1
1
1
1
1
1
1
1
1
11
20
1,228
Month 21
1
1
1
1
1
1
1
1
1
12
21
1,296
Month 22
1
1
1
1
1
1
1
1
1
13
22
1,364
Month 23
1
1
1
1
1
1
1
1
1
14
23
1,432
Month 24
1
1
1
1
1
1
1
1
1
15
24
1,500
$
$
$
$
$
Month 20
640,688
444,709
3,097,654
2,478,123
43,357
$
$
$
$
$
Month 21
676,104
489,934
3,587,588
2,870,070
45,224
$
$
$
$
$
Month 22
711,521
536,979
4,124,566
3,299,653
47,045
$
$
$
$
$
Month 23
746,938
585,799
4,710,365
3,768,292
48,820
$
$
$
$
$
Month 24
782,354
636,350
5,346,716
4,277,372
50,551
$
$
$
$
$
$
83,333
88,733
50,000
153,805
375,872
3,780,483
$
$
$
$
$
$
87,500
93,317
52,500
162,307
395,624
4,176,107
$
$
$
$
$
$
91,667
97,900
55,000
170,809
415,376
4,591,483
$
$
$
$
$
$
95,833
102,483
57,500
179,312
435,128
5,026,612
$
$
$
$
$
$
100,000
107,067
60,000
187,814
454,881
5,481,492
Month 20
$
(20,104) $
$ (1,302,360) $
Month 21
(3,677) $
(1,306,037) $
Month 22
14,207 $
(1,291,830) $
Month 23
33,511 $
(1,258,319) $
Month 24
54,200
(1,204,120)
$
$
Month 20
444,709 $
889,419 $
Month 21
489,934 $
979,867 $
Month 22
536,979 $
1,073,957 $
Month 23
585,799 $
1,171,598 $
Month 24
636,350
1,272,700
$
$
Month 20
43,357 $
86,714 $
Month 21
45,224 $
90,449 $
Month 22
47,045 $
94,090 $
Month 23
48,820 $
97,641 $
Month 24
50,551
101,102
$
$
Month 20
(20,104) $
(40,208) $
Month 21
(3,677) $
(7,354) $
Month 22
14,207 $
28,414 $
Month 23
33,511 $
67,022 $
Month 24
54,200
108,399
Month 20
$ (1,302,360) $
$ (2,604,720) $
Month 21
(1,306,037) $
(2,612,074) $
Month 22
(1,291,830) $
(2,583,661) $
Month 23
(1,258,319) $
(2,516,639) $
Month 24
(1,204,120)
(2,408,240)
t Profit

Month 25
1
Month 26
1
Month 27
1
Month 28
1
Month 29
1
Month 25
1
1
1
1
1
1
1
1
1
16
25
1,567
Month 26
1
1
1
1
1
1
1
1
1
17
26
1,635
Month 27
1
1
1
1
1
1
1
1
1
18
27
1,703
Month 28
1
1
1
1
1
1
1
1
1
19
28
1,771
Month 29
1
1
1
1
1
1
1
1
1
20
29
1,839
$
$
$
$
$
Month 25
817,771
688,589
6,035,305
4,828,244
52,239
$
$
$
$
$
Month 26
853,188
742,473
6,777,778
5,422,222
53,884
$
$
$
$
$
Month 27
888,604
797,962
7,575,740
6,060,592
55,489
$
$
$
$
$
Month 28
924,021
855,014
8,430,754
6,744,603
57,053
$
$
$
$
$
Month 29
959,438
913,592
9,344,346
7,475,477
58,578
$
$
$
$
$
$
104,167
111,650
62,500
196,316
474,633
5,956,125
$
$
$
$
$
$
108,333
116,233
65,000
204,818
494,385
6,450,510
$
$
$
$
$
$
112,500
120,817
67,500
213,321
514,137
6,964,647
$
$
$
$
$
$
116,667
125,400
70,000
221,823
533,889
7,498,537
$
$
$
$
$
$
120,833
129,983
72,500
230,325
553,642
8,052,178
$
$
Month 25
76,238 $
(1,127,881) $
Month 26
99,594 $
(1,028,288) $
Month 27
124,232 $
(904,055) $
Month 28
150,122 $
(753,933) $
Month 29
177,232
(576,701)
$
$
Month 25
688,589 $
1,377,178 $
Month 26
742,473 $
1,484,947 $
Month 27
797,962 $
1,595,924 $
Month 28
855,014 $
1,710,029 $
Month 29
913,592
1,827,185
$
$
Month 25
52,239 $
104,478 $
Month 26
53,884 $
107,768 $
Month 27
55,489 $
110,977 $
Month 28
57,053 $
114,105 $
Month 29
58,578
117,156
$
$
Month 25
76,238 $
152,477 $
Month 26
99,594 $
199,187 $
Month 27
124,232 $
248,464 $
Month 28
150,122 $
300,244 $
Month 29
177,232
354,464
$
$
Month 25
(1,127,881) $
(2,255,763) $
Month 26
(1,028,288) $
(2,056,575) $
Month 27
(904,055) $
(1,808,111) $
Month 28
(753,933) $
(1,507,867) $
Month 29
(576,701)
(1,153,402)
$
$
$
$
$
$
$
$
$
$
$
$
$
Month 30
1
Month 31
1
Month 32
1
Month 33
1
Month 34
1
Month 30
1
1
1
1
1
1
1
1
1
21
30
1,907
Month 31
1
1
1
1
1
1
1
1
1
22
31
1,975
Month 32
1
1
1
1
1
1
1
1
1
23
32
2,043
Month 33
1
1
1
1
1
1
1
1
1
24
33
2,110
Month 34
1
1
1
1
1
1
1
1
1
25
34
2,178
Month 30
994,854
973,657
10,318,003
8,254,403
60,065
Month 31
1,030,271
1,035,171
11,353,175
9,082,540
61,514
Month 32
1,065,688
1,098,099
12,451,274
9,961,019
62,928
Month 33
1,101,104
1,162,406
13,613,680
10,890,944
64,306
Month 34
1,136,521
1,228,056
14,841,735
11,873,388
65,650
125,000
134,567
75,000
238,827
573,394
8,625,572
$
$
$
$
$
$
$
$
$
$
$
Month 30
205,532 $
(371,169) $
129,167
139,150
77,500
247,329
593,146
9,218,718
$
$
$
$
$
$
$
$
$
$
$
Month 31
234,991 $
(136,178) $
133,333
143,733
80,000
255,832
612,898
9,831,616
$
$
$
$
$
$
137,500
$
148,317
$
82,500
$
264,334
$
632,650
$ 10,464,267
Month 32
265,581 $
129,403 $
$
$
$
$
$
$
141,667
$
152,900
$
85,000
$
272,836
$
652,403
$ 11,116,670
Month 33
297,274 $
426,677 $
Month 34
330,042
756,719
$
$
Month 30
973,657 $
1,947,314 $
Month 31
1,035,171 $
2,070,343 $
Month 32
1,098,099 $
2,196,199 $
Month 33
1,162,406 $
2,324,811 $
Month 34
1,228,056
2,456,111
$
$
Month 30
60,065 $
120,129 $
Month 31
61,514 $
123,029 $
Month 32
62,928 $
125,856 $
Month 33
64,306 $
128,612 $
Month 34
65,650
131,300
$
$
Month 30
205,532 $
411,063 $
Month 31
234,991 $
469,982 $
Month 32
265,581 $
531,163 $
Month 33
297,274 $
594,548 $
Month 34
330,042
660,084
$
$
Month 30
(371,169) $
(742,339) $
Month 31
(136,178) $
(272,357) $
Month 32
129,403 $
258,806 $
Month 33
426,677 $
853,354 $
Month 34
756,719
1,513,438
$
$
$
$
$
Month 35
1
Month 36
1
Month 35
1
1
1
1
1
1
1
1
1
26
35
2,246
Month 36
1
1
1
1
1
1
1
1
1
27
36
2,314
Month 35
1,171,938
1,295,016
16,136,751
12,909,401
66,960
Month 36
1,207,354
1,363,253
17,500,004
14,000,003
68,237
$
145,833
$
157,483
$
87,500
$
281,338
$
672,155
$ 11,788,825
$
$
$
$
$
$
$
$
150,000
$
162,067
$
90,000
$
289,840
$
691,907
$ 12,480,732
Month 35
363,858 $
1,120,576 $
Month 36
398,695
1,519,272
$
$
Month 35
1,295,016 $
2,590,031 $
Month 36
1,363,253
2,726,506
$
$
Month 35
66,960 $
133,920 $
Month 36
68,237
136,475
$
$
Month 35
363,858 $
727,715 $
Month 36
398,695
797,391
$
$
Month 35
1,120,576 $
2,241,153 $
Month 36
1,519,272
3,038,543
Churn Rate Comparison

This is simply a copy of the first tab, with a different churn rate (1.25% versus 2.5%)
Net Profit
Churn 1.25%
Churn 2.5%
$
$
Month 1
(23,728) $
(23,728) $
Month 2
(47,065) $
(47,071) $
$
$
Month 1
(23,728) $
(23,728) $
Month 2
Month 3
(70,793) $ (143,349)
(70,799) $ (143,391)

Churn 1.25%
Churn 2.5%
Month 3
(72,555)
(72,592)
$1,200,000
$1,000,000
$800,000
$600,000
Churn 1.25%
$400,000
Churn 2.5%
$200,000
$$(200,000)
$(400,000)
Part 1: Model the ecomomics of a single sales person

Sales compensation and overhead
Base Compensation
Draw on Variable Comp
Additional overhead
Sales attrition factor
On target annual bookings
Annual Bookings
Monthly Bookings
Churn Rate and Margin
Churn Rate (monthly)
$
$
$
50,000
55,000 with 50% draw for first four months
100%
70%
30%
30,000
15% a factor to discount bookings to account

41,667
1.25%
Gross Margin
80.00%
Cost of Leads required to feed sales

Average Deal Size
Deals to meet target
Leads to closed deal
Cost per Qualified Lead
Cost of Leads required
$6,000 (ACV) Annual Contract Value

6.9 per month
10
$125
8,698 per month, for 1 fully productive sales p
Other interesting Calculations

Lead Gen costs per deal
Selling costs per deal
Total CAC
Total LTV
$
$
$
$
1,253
1,620
2,873
32,000
Income
Productivity Ramp
Bookings (ACV)
MRR from prior months bookings
Churn
Cumulative Billings
Excludes people costs

Excludes cost of sales management
Excludes people costs in marketing, and
Calculated by dividing average monthly
$
$
$
Month 1
10%
3,542 $
295 $
$
$
295 $
295 $
236 $
Month 2
33%
11,688
974
295
(3.69)
1,265
1,561
1,248
$
$
$
$
$
$
$
Month 3
66%
23,375
1,948
1,265
(15.82)
3,198
4,758
3,806
$
$
$
$
$
$
4,167
4,583
2,500
850
12,100
12,100
4,167
3,208
2,500
2,806
12,681
24,781
$
$
$
$
$
$
4,167
3,025
2,500
5,611
15,303
40,084
$
$
Month 1
(11,864) $
(11,864) $
$
$
Expenses
Base Salary
Overhead
Total Expenses
Cumulative expenses
Breakeven Analysis
Net profit
$
$
$
$
$
$
Month 2
(11,668) $
(23,533) $
Month 3
(12,745)
(36,278)
Bookings & Churn - Single Sales Hire

$3,500
$3,000
$2,500
$2,000
Churn
$1,500
$1,000
$500
$-
$3,500
$3,000
$2,500
$2,000
Churn
$1,500
$1,000
$500
$$(500)
Part 2: Look at the Overall Economics when Ramping Sales Hires

Month 1
2
2
14
Month 2
2
4
58
Month 3
2
6
148
$
$
$
$
$
Month 1
7,083
590
590
472
590
$
$
$
$
$
Month 2
30,458
3,121
3,711
2,969
2,531
$
$
$
$
$
Month 3
77,208
9,516
13,227
10,582
6,395
$
$
$
$
$
$
8,333
9,167
5,000
1,700
24,200
24,200
$
$
$
$
$
$
16,667
15,583
10,000
7,312
49,562
73,762
$
$
$
$
$
$
25,000
21,633
15,000
18,535
80,168
153,931
$
$
Month 1
(23,728) $
(23,728) $
New Sales Hires

Income
Bookings (ACV)
Cumulative Billings
Growth in MRR
Expenses
Base Salary
Overhead
Total Expenses
Cumulative expenses
Breakeven Analysis
Net profit
Net profit
$250,000
$200,000
$150,000
$100,000
$50,000
$$(50,000)
$(100,000)
$(150,000)
$(200,000)
$(250,000)
Month 2
Month 3
(47,065) $
(72,555)
(70,793) $ (143,349)
$50,000
$$(50,000)
$(100,000)
$(150,000)
$(200,000)
$(250,000)

$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$-
Part 3: Look at the impact of collecting 1 year's payment in adva

Step 1: Individual Sales person
Income
Productivity Ramp
Bookings (ACV)
Renewable contract value
Churn
Renewals (renewable - churn)
Billings (bookings + renewals)
Cumulative Billings
$30,000
$20,000
$10,000
$-
Month 3
66%
23,375
3,542 $
3,542 $
2,833 $
11,688 $
15,229 $
12,183 $
23,375
38,604
30,883
$
$
Month 1
(9,267) $
(9,267) $
Month 2
(3,331) $
(12,598) $
Month 3
3,397
(9,201)
Net Cash Flows

$40,000
Month 2
33%
11,688 $
$
$
$
Breakeven Analysis
Net Cash Flows
Month 1
10%
3,542 $
$40,000
$30,000
$20,000
$10,000
$$(10,000)
$(20,000)
Step 2: Look at the Overall Economics when Ramping Sales Hires

Income
Month 1
Month 2
Month 3
Bookings (ACV)
Billings less churn (MRR)
Cumulative Billings
Growth in MRR
$
$
$
$
$
Breakeven Analysis
Net Cash Flows
$
$
7,083
7,083
7,083
5,667
7,083
$
$
$
$
$
Month 1
(6,434) $
(18,534) $
Net Cash Flows

$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$$(500,000)
30,458
30,458
37,542
30,033
23,375
$
77,208
$
77,208
$ 114,750
$
91,800
$
46,750
Month 2
11,686 $
(19,529) $
Month 3
46,464
11,632
$
$
Month 4
(102,285) $
(102,417) $
Month 5
Month 6
(127,416) $ (148,003) $
(127,761) $ (148,737) $
Month 7
(164,105) $
(165,454) $
Month 8
(175,777)
(178,018)
$
$
Month 4
(245,634) $
(245,808) $
Month 5
Month 6
(373,049) $ (521,053) $
(373,569) $ (522,306) $
Month 7
(685,157) $
(687,759) $
Month 8
(860,934)
(865,777)
urn 1.25%
urn 2.5%
$8,000,000
$6,000,000
$4,000,000
Churn 1.25%
$2,000,000
Churn 2.5%
$$(2,000,000)
$(4,000,000)
Cells formated like this:
first four months

0%
0%
0%
t bookings to account for failed sales hires and attrition
act Value)
0%
0%
act Value
lly productive sales person
les management
sts in marketing, and sales management. (CAC= Cost to Acquire a Customer)
ing average monthly gross profit per customer (ARPU x Gross Margin ) by the churn rate
$
$
$
$
$
$
$
Month 4
100%
35,417
2,951
3,198
(39.97)
6,109
10,867
8,694
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
59,836
$
$
Month 4
(14,865) $
(51,143) $
this month
$
$
$
$
$
$
$
Month 5
100%
35,417
2,951
6,109
(76.36)
8,984
19,851
15,881
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
79,589
$
$
$
$
$
$
$
Month 6
100%
35,417
2,951
8,984
(112.30)
11,823
31,674
25,339
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
99,341
Month 5
(12,565) $
(63,708) $
$
$
$
$
$
$
$
Month 7
100%
35,417
2,951
11,823
(147.79)
14,627
46,301
37,040
$
$
$
$
$
$
$
Month 8
100%
35,417
2,951
14,627
(182.83)
17,395
63,696
50,957
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
119,093
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
138,845
Month 6
(10,294) $
(74,002) $
Month 7
(8,051) $
(82,052) $
Month 8
(5,836)
(87,888)
MRR - Single Sales Hire

$35,000
$30,000
$25,000
Churn
$20,000

bookings
$15,000
$10,000
$5,000
$-
$35,000
$30,000
this month
$25,000
Churn
$20,000

bookings
$15,000
$10,000
$5,000
$$(5,000)
ng Sales Hires
$
$
$
$
$
Month 4
2
8
284
Month 5
2
10
420
Month 6
2
12
555
Month 7
2
14
691
Month 8
2
16
827
Month 4
148,042
21,734
34,961
27,969
12,218
Month 5
218,875
39,702
74,663
59,731
17,968
Month 6
$
289,708
$
63,348
$ 138,011
$
110,409
$
23,646
Month 7
360,542
92,601
230,613
184,490
29,253
Month 8
431,375
127,392
358,004
286,403
34,790
$
$
$
$
$
$
$
$
$
$
$
33,333
30,800
20,000
35,539
119,673
273,603
$
$
$
$
$
$
$
$
Month 4
(102,285) $
(245,634) $
41,667
39,967
25,000
52,544
159,177
432,780
$
$
$
$
$
$
50,000 $
$
49,133 $
$
30,000 $
$
69,548 $
$ 198,681 $
$
631,462 $
58,333 $
58,300 $
35,000 $
86,553 $
238,186 $
869,647 $
Month 5
Month 6
(127,416) $ (148,003) $
(373,049) $ (521,053) $
Month 7
(164,105) $
(685,157) $

$$(500,000)
$(1,000,000)
$(1,500,000)
$(2,000,000)
$(2,500,000)
$
$
$
$
$
66,667
67,467
40,000
103,557
277,690
1,147,338
Month 8
(175,777)
(860,934)
$(1,000,000)
$(1,500,000)
$(2,000,000)
$(2,500,000)
Growth in MRR
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$-
yment in advance
Month 4
100%
35,417 $
$
$
$
35,417 $
74,021 $
59,217 $
$
$
Month 4
8,581 $
(620) $
Month 5
100%
35,417 $
Month 6
100%
35,417 $
Month 7
100%
35,417 $
35,417 $
35,417 $
109,438 $ 144,854 $
87,550 $
115,883 $
35,417 $
180,271 $
144,217 $
Month 5
8,581 $
7,961 $
Month 6
8,581 $
16,543 $
Month 7
8,581 $
25,124 $
Month 8
100%
35,417
35,417
215,688
172,550
Month 8
8,581
33,705

$500,000
$400,000
$300,000
$200,000
$100,000
$-
$500,000
$400,000
$300,000
$200,000
$100,000
$$(100,000)
$
$
$
$
$
$
$
Month 4
148,042
148,042
262,792
210,233
70,833
$
$
$
$
$
Month 5
218,875
218,875
481,667
385,333
70,833
Month 4
98,681 $
90,561 $
Month 6
$
289,708
$
289,708
$ 771,375
$
617,100
$
70,833
Month 5
155,348 $
226,156 $
$
$
$
$
$
Month 6
212,014 $
418,419 $
Month 7
360,542
360,542
1,131,917
905,533
70,833
$
$
$
$
$
Month 8
431,375
431,375
1,563,292
1,250,633
70,833
Month 7
268,681 $
667,347 $
Month 8
325,348
972,943

$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$$(5,000,000)
$
$
Month 9
(183,075) $
(186,534) $
Month 10
(186,053) $
(191,102) $
Month 11
(184,765) $
(191,821) $
Month 12
(179,266) $
(188,788) $
Month 13
(169,606)
(182,096)
$
$
Month 9
(1,044,009) $
(1,052,311) $
Month 10
(1,230,062) $
(1,243,413) $
Month 11
(1,414,827) $
(1,435,234) $
Month 12
(1,594,093) $
(1,624,022) $
Month 13
(1,763,699)
(1,806,118)
Churn 1.25%
Churn 2.5%
are input variables
0%
Quick Marketing Calculation

50% amount of traffic that is organic versus paid
$1.50 cost per paid visitor (Google AdWords, etc.)
$
0.75 Cost per visitor (both paid and unpaid)
3% visitors convert to raw leads
20% number of raw leads that turn into qualified leads
1 qualified lead
5 raw leads required
167 visitors required
$125 Cost of visitors (also = Cost per qualified lead)
hurn rate
$
$
$
$
$
$
$
Month 9
100%
35,417
2,951
17,395
(217.44)
20,129
83,825
67,060
$
$
$
$
$
$
4,167 $
4,583 $
2,500 $
8,502 $
19,752 $
158,597 $
4,167
4,583
2,500
8,502
19,752
178,350
$
$
Month 9
(3,649) $
(91,537) $
Month 10
(1,489) $
(93,026) $
$
$
$
$
$
$
$
Month 10
100%
35,417
2,951
20,129
(251.61)
22,829
106,654
85,323
$
$
$
$
$
$
$
Month 11
100%
35,417
2,951
22,829
(285.36)
25,495
132,149
105,719
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
198,102
$
$
$
$
$
$
$
Month 12
100%
35,417
2,951
25,495
(318.69)
28,128
160,277
128,221
$
$
$
$
$
$
$
Month 13
100%
35,417
2,951
28,128
(351.60)
30,727
191,004
152,803
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
217,854
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
237,606
Month 11
644 $
(92,383) $
Month 12
2,750 $
(89,633) $
Month 13
4,830
(84,803)
MRR Versus Expenses

$30,000
$25,000
$20,000
prior months
added this month
$15,000
Axis Title
$10,000
$5,000
$-

Total Expenses
$30,000
$25,000
$20,000
prior months
$15,000
added this month
Axis Title
Total Expenses
$10,000
$5,000
$-
$
$
$
$
$
Month 9
2
18
963
Month 10
2
20
1,098
Month 11
2
22
1,234
Month 12
2
24
1,370
Month 13
2
26
1,506
Month 9
502,208
167,650
525,654
420,523
40,258
Month 10
573,042
213,308
738,962
591,170
45,658
Month 11
643,875
264,298
1,003,260
802,608
50,990
Month 12
714,708
320,553
1,323,813
1,059,050
56,255
Month 13
785,542
382,008
1,705,821
1,364,656
61,455
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
75,000 $
76,633 $
45,000 $
120,561 $
317,195 $
1,464,532 $
83,333 $
85,800 $
50,000 $
137,566 $
356,699 $
1,821,232 $
91,667 $
94,967 $
55,000 $
154,570 $
396,204 $
2,217,435 $
100,000 $
104,133 $
60,000 $
171,575 $
435,708 $
2,653,143 $
$
$
Month 9
(183,075) $
(1,044,009) $
Month 10
(186,053) $
(1,230,062) $
Month 11
(184,765) $
(1,414,827) $
Month 12
(179,266) $
(1,594,093) $

$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$$(1,000,000)
$(2,000,000)
$(3,000,000)
108,333
113,300
65,000
188,579
475,212
3,128,356
Month 13
(169,606)
(1,763,699)
$3,000,000
$2,000,000
$1,000,000
$$(1,000,000)
$(2,000,000)
$(3,000,000)
Month 9
100%
35,417 $
Month 10
100%
35,417 $
$
$
$
35,417 $
251,104 $
200,883 $
$
$
Month 9
8,581 $
42,286 $
Flows
35,417 $
286,521 $
229,217 $
Month 11
100%
35,417 $
$
$
$
35,417 $
321,938 $
257,550 $
Month 12
100%
35,417
3,542
(531.25)
3,010
38,427
360,365
288,292
$
$
$
$
$
$
$
Month 13
100%
35,417
11,688
(1,753.13)
9,934
45,351
405,716
324,573
Month 10
8,581 $
50,867 $
Month 11
8,581 $
59,448 $
Month 12
10,989 $
70,438 $
Month 13
16,529
86,966
Cashflow comparison - monthly payments vs year in

$40,000
$30,000
$20,000
Net profit
Net Cash Flows

Axis Title
$10,000
$-
lows
$40,000
$30,000
Net profit
$20,000
Net Cash Flows

Axis Title
$10,000
$$(10,000)
$(20,000)
$
$
$
$
$
$
$
Month 9
502,208
502,208
2,065,500
1,652,400
70,833
$
$
$
$
$
Month 9
382,014 $
1,335,205 $
Month 10
573,042
573,042
2,638,542
2,110,833
70,833
$
$
$
$
$
Month 10
438,681 $
1,754,134 $
Month 11
643,875
643,875
3,282,417
2,625,933
70,833
$
$
$
$
$
Month 11
495,348 $
2,229,730 $
Month 12
714,708
714,708
3,997,125
3,197,700
70,833
$
$
$
$
$
Month 13
785,542
786,604
4,783,729
3,826,983
71,896
Month 12
552,014 $
2,761,992 $
Month 13
609,531
3,351,771
Cashflow comparison - monthly payments vs year in ad

$2,500,000
$2,000,000
$1,500,000
Axis Title
$1,000,000
$500,000
$$(500,000)
Net profit
Net Cash Flows
$
$
Month 14
(155,839) $
(171,837) $
Month 15
(138,015) $
(158,099) $
Month 16
(116,186) $
(140,971) $
Month 17
(90,402) $
(120,536) $
Month 18
(60,711)
(96,877)
$
$
Month 14
(1,919,538) $
(1,977,955) $
Month 15
(2,057,554) $
(2,136,054) $
Month 16
(2,173,740) $
(2,277,025) $
Month 17
(2,264,142) $
(2,397,560) $
Month 18
(2,324,853)
(2,494,437)
fied leads
$
$
$
$
$
$
$
Month 14
100%
35,417
2,951
30,727
(384.09)
33,295
224,299
179,439
$
$
$
$
$
$
$
Month 15
100%
35,417
2,951
33,295
(416.18)
35,830
260,129
208,103
$
$
$
$
$
$
$
Month 16
100%
35,417
2,951
35,830
(447.87)
38,333
298,462
238,770
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
296,863
$
$
$
$
$
$
4,167 $
4,583 $
2,500 $
8,502 $
19,752 $
257,358 $
4,167
4,583
2,500
8,502
19,752
277,111
$
$
Month 14
6,884 $
(77,919) $
Month 15
8,912 $
(69,008) $
$
$
$
$
$
$
$
Month 17
100%
35,417
2,951
38,333
(479.17)
40,806
339,268
271,414
$
$
$
$
$
$
$
Month 18
100%
35,417
2,951
40,806
(510.07)
43,247
382,515
306,012
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
316,615
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
336,367
Month 16
10,915 $
(58,093) $
Month 17
12,892 $
(45,201) $
Month 18
14,845
(30,355)
Net profit - New Sales Hire

$30,000
$25,000
$20,000
$15,000
Total Expenses
$10,000
$5,000
$$(5,000)
$30,000
$25,000
$20,000
$15,000
Total Expenses
$10,000
$5,000
$$(5,000)
$(10,000)
$(15,000)
$(20,000)
$
$
$
$
$
Month 14
2
28
1,641
Month 15
2
30
1,777
Month 16
2
32
1,913
Month 17
2
34
2,049
Month 18
2
36
2,184
Month 14
856,375
448,597
2,154,418
1,723,534
66,589
Month 15
927,208
520,257
2,674,675
2,139,740
71,660
Month 16
998,042
596,924
3,271,599
2,617,279
76,667
$
$
$
$
$
Month 17
1,068,875
678,536
3,950,135
3,160,108
81,611
$
$
$
$
$
Month 18
1,139,708
765,030
4,715,164
3,772,132
86,494
133,333
140,800
80,000
239,592
593,726
4,791,019
$
$
$
$
$
$
141,667
149,967
85,000
256,597
633,230
5,424,250
$
$
$
$
$
$
150,000
159,133
90,000
273,601
672,735
6,096,984
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
116,667 $
122,467 $
70,000 $
205,584 $
514,717 $
3,643,072 $
125,000 $
131,633 $
75,000 $
222,588 $
554,221 $
4,197,294 $
$
$
Month 14
(155,839) $
(1,919,538) $
Month 15
(138,015) $
(2,057,554) $
Month 16
(116,186) $
(2,173,740) $
Month 17
(90,402) $
(2,264,142) $
Month 18
(60,711)
(2,324,853)
$
$
$
$
$
$
$
$
$
Month 14
100%
35,417
23,375
(3,506.25)
19,869
55,285
461,001
368,801
$
$
$
$
$
$
$
Month 14
24,476 $
111,442 $
Month 15
100%
35,417
35,417
(5,312.50)
30,104
65,521
526,522
421,218
$
$
$
$
$
$
$
Month 15
32,664 $
144,107 $
Month 16
100%
35,417
35,417
(5,312.50)
30,104
65,521
592,043
473,634
$
$
$
$
$
$
$
Month 16
32,664 $
176,771 $
Month 17
100%
35,417
35,417
(5,312.50)
30,104
65,521
657,564
526,051
$
$
$
$
$
$
$
Month 18
100%
35,417
35,417
(5,312.50)
30,104
65,521
723,084
578,468
Month 17
32,664 $
209,436 $
Month 18
32,664
242,100
yments vs year in advance Cumulative Cashflow comparision - monthly payments vs ye

$500,000
$400,000
Net profit
$300,000
Net Cash Flows
$200,000
Axis Title
$100,000
$-
$500,000
$400,000
Net profit
Net Cash Flows
Axis Title
$300,000
$200,000
$100,000
$$(100,000)
$(200,000)
$
$
$
$
$
$
$
Month 14
856,375
860,944
5,644,673
4,515,738
74,340
$
$
$
$
$
Month 14
669,003 $
4,001,021 $
Month 15
927,208
938,790
6,583,463
5,266,770
77,846
Month 15
731,279 $
4,712,549 $
ments vs year in advance
Net profit
Net Cash Flows
$
$
$
$
$
Month 16
998,042
1,020,248
7,603,710
6,082,968
81,458
$
$
$
$
$
Month 16
796,446 $
5,489,243 $
Month 17
1,068,875
1,101,706
8,705,417
6,964,333
81,458
$
$
$
$
$
Month 18
1,139,708
1,183,165
9,888,581
7,910,865
81,458
Month 17
861,613 $
6,331,103 $
Month 18
926,779
7,238,130
Cumulative Cashflow comparision - monthly payments

$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$10,000,000
$5,000,000
$$(5,000,000)
Cumulative Net
Cumulative Net
$
$
Month 19
(27,163) $
(70,075) $
Month 20
10,194 $
(40,208) $
Month 21
51,313 $
(7,354) $
Month 22
96,146 $
28,414 $
Month 23
144,647
67,022
$
$
Month 19
(2,352,015) $
(2,564,512) $
Month 20
(2,341,821) $
(2,604,720) $
Month 21
(2,290,508) $
(2,612,074) $
Month 22
(2,194,362) $
(2,583,661) $
Month 23
(2,049,716)
(2,516,639)
$
$
$
$
$
$
$
Month 19
100%
35,417
2,951
43,247
(540.59)
45,658
428,173
342,538
$
$
$
$
$
$
$
Month 20
100%
35,417
2,951
45,658
(570.72)
48,038
476,211
380,969
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
356,119
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
375,872
$
$
Month 19
16,774 $
(13,581) $
$
$
$
$
$
$
$
Month 21
100%
35,417
2,951
48,038
(600.48)
50,389
526,600
421,280
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
395,624
Month 20
18,679 $
5,097 $
$
$
$
$
$
$
$
Month 22
100%
35,417
2,951
50,389
(629.87)
52,711
579,311
463,449
$
$
$
$
$
$
$
Month 23
100%
35,417
2,951
52,711
(658.89)
55,003
634,315
507,452
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
415,376
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
435,128
Month 21
20,559 $
25,656 $
Month 22
22,417 $
48,073 $
Month 23
24,251
72,323
Cumulative Net Profit - New Sales Hire

$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$$(100,000)
$(200,000)
Month 19
2
38
2,320
Month 20
2
40
2,456
Month 21
2
42
2,592
Month 22
2
44
2,727
Month 23
2
46
2,863
$
$
$
$
$
Month 19
1,210,542
856,345
5,571,510
4,457,208
91,316
$
$
$
$
$
Month 20
1,281,375
952,422
6,523,932
5,219,145
96,077
$
$
$
$
$
Month 21
1,352,208
1,053,201
7,577,133
6,061,706
100,779
$
$
$
$
$
Month 22
1,423,042
1,158,623
8,735,755
6,988,604
105,422
$
$
$
$
$
Month 23
1,493,875
1,268,629
10,004,385
8,003,508
110,007
$
$
$
$
$
$
158,333
168,300
95,000
290,606
712,239
6,809,223
$
$
$
$
$
$
166,667
177,467
100,000
307,610
751,743
7,560,967
$
$
$
$
$
$
175,000
186,633
105,000
324,615
791,248
8,352,214
$
$
$
$
$
$
183,333
195,800
110,000
341,619
830,752
9,182,967
$
$
$
$
$
$
191,667
204,967
115,000
358,623
870,257
10,053,223
$
$
Month 19
(27,163) $
(2,352,015) $
Month 20
10,194 $
(2,341,821) $
Month 21
51,313 $
(2,290,508) $
Month 22
96,146 $
(2,194,362) $
Month 23
144,647
(2,049,716)
$
$
$
$
$
$
$
$
$
Month 19
100%
35,417
35,417
(5,312.50)
30,104
65,521
788,605
630,884
$
$
$
$
$
$
$
Month 19
32,664 $
274,765 $
Month 20
100%
35,417
35,417
(5,312.50)
30,104
65,521
854,126
683,301
Month 20
32,664 $
307,429 $
nthly payments vs year in advance

$
$
$
$
$
$
$
Month 21
100%
35,417
35,417
(5,312.50)
30,104
65,521
919,647
735,718
$
$
$
$
$
$
$
Month 21
32,664 $
340,094 $
Month 22
100%
35,417
35,417
(5,312.50)
30,104
65,521
985,168
788,134
$
$
$
$
$
$
$
Month 23
100%
35,417
35,417
(5,312.50)
30,104
65,521
1,050,689
840,551
Month 22
32,664 $
372,758 $
Month 23
32,664
405,422

$
$
$
$
$
$
$
Month 19
1,210,542
1,264,623
11,153,204
8,922,563
81,458
$
$
$
$
$
Month 19
991,946 $
8,210,324 $
Month 20
1,281,375
1,346,081
12,499,285
9,999,428
81,458
$
$
$
$
$
Month 20
1,057,113 $
9,247,685 $
- monthly payments vs year in advance

Month 21
1,352,208
1,427,540
13,926,825
11,141,460
81,458
$
$
$
$
$
Month 21
1,122,279 $
10,350,212 $
Month 22
1,423,042
1,508,998
15,435,823
12,348,658
81,458
$
$
$
$
$
Month 23
1,493,875
1,590,456
17,026,279
13,621,023
81,458
Month 22
1,187,446 $
11,517,906 $
Month 23
1,252,613
12,750,767
$
$
Month 24
196,770 $
108,399 $
Month 25
252,470 $
152,477 $
Month 26
311,702 $
199,187 $
Month 27
374,423 $
248,464 $
Month 28
440,587
300,244
$
$
Month 24
(1,852,946) $
(2,408,240) $
Month 25
(1,600,476) $
(2,255,763) $
Month 26
(1,288,773) $
(2,056,575) $
Month 27
(914,351) $
(1,808,111) $
Month 28
(473,764)
(1,507,867)
s Hire
$
$
$
$
$
$
$
Month 24
100%
35,417
2,951
55,003
(687.54)
57,267
691,582
553,266
$
$
$
$
$
$
$
Month 25
100%
35,417
2,951
57,267
(715.84)
59,503
751,085
600,868
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
454,881
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
474,633
$
$
Month 24
26,062 $
98,385 $
$
$
$
$
$
$
$
Month 26
100%
35,417
2,951
59,503
(743.78)
61,710
812,795
650,236
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
494,385
Month 25
27,850 $
126,235 $
$
$
$
$
$
$
$
Month 27
100%
35,417
2,951
61,710
(771.38)
63,890
876,686
701,348
$
$
$
$
$
$
$
Month 28
100%
35,417
2,951
63,890
(798.63)
66,043
942,729
754,183
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
514,137
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
533,889
Month 26
29,616 $
155,851 $
Month 27
31,360 $
187,211 $
Month 28
33,082
220,294
Month 24
2
48
2,999
Month 25
2
50
3,135
Month 26
2
52
3,271
Month 27
2
54
3,406
Month 28
2
56
3,542
$
$
$
$
$
Month 24
1,564,708
1,383,164
11,387,549
9,110,039
114,534
$
$
$
$
$
Month 25
1,635,542
1,502,170
12,889,718
10,311,775
119,006
$
$
$
$
$
Month 26
1,706,375
1,625,590
14,515,309
11,612,247
123,421
$
$
$
$
$
Month 27
1,777,208
1,753,371
16,268,680
13,014,944
127,781
$
$
$
$
$
Month 28
1,848,042
1,885,457
18,154,137
14,523,310
132,086
$
$
$
$
$
$
200,000
214,133
120,000
375,628
909,761
10,962,984
$
$
$
$
$
$
208,333
223,300
125,000
392,632
949,266
11,912,250
$
$
$
$
$
$
216,667
232,467
130,000
409,637
988,770
12,901,020
$
$
$
$
$
$
225,000
241,633
135,000
426,641
1,028,274
13,929,294
$
$
$
$
$
$
233,333
250,800
140,000
443,646
1,067,779
14,997,073
$
$
Month 24
196,770 $
(1,852,946) $
Month 25
252,470 $
(1,600,476) $
Month 26
311,702 $
(1,288,773) $
Month 27
374,423 $
(914,351) $
Month 28
440,587
(473,764)
$
$
$
$
$
$
$
$
$
Month 24
100%
35,417
35,417
(5,312.50)
30,104
65,521
1,116,209
892,968
$
$
$
$
$
$
$
Month 24
32,664 $
438,087 $
Month 25
100%
35,417
38,427
(5,764.06)
32,663
68,080
1,184,289
947,431
$
$
$
$
$
$
$
Month 25
34,712 $
472,798 $
Month 26
100%
35,417
45,351
(6,802.66)
38,548
73,965
1,258,254
1,006,603
$
$
$
$
$
$
$
Month 26
39,420 $
512,218 $
Month 27
100%
35,417
55,285
(8,292.81)
46,993
82,409
1,340,663
1,072,531
$
$
$
$
$
$
$
Month 28
100%
35,417
65,521
(9,828.13)
55,693
91,109
1,431,773
1,145,418
Month 27
46,175 $
558,394 $
Month 28
53,135
611,529
$
$
$
$
$
$
$
Month 24
1,564,708
1,671,915
18,698,194
14,958,555
81,458
$
$
$
$
$
Month 24
1,317,779 $
14,048,794 $
Month 25
1,635,542
1,753,532
20,451,726
16,361,381
81,618
$
$
$
$
$
Month 25
1,383,074 $
15,412,115 $
Month 26
1,706,375
1,835,517
22,287,243
17,829,794
81,984
$
$
$
$
$
Month 26
1,448,661 $
16,841,024 $
Month 27
1,777,208
1,918,027
24,205,269
19,364,216
82,510
$
$
$
$
$
Month 28
1,848,042
2,001,079
26,206,348
20,965,079
83,052
Month 27
1,514,669 $
18,335,941 $
Month 28
1,581,111
19,897,300
$
$
Month 29
510,153 $
354,464 $
Month 30
583,078 $
411,063 $
Month 31
659,320 $
469,982 $
Month 32
738,837 $
531,163 $
Month 33
821,588
594,548
$
$
Month 29
36,390 $
(1,153,402) $
Month 30
619,468 $
(742,339) $
Month 31
1,278,787 $
(272,357) $
Month 32
2,017,624 $
258,806 $
Month 33
2,839,212
853,354
$
$
$
$
$
$
$
Month 29
100%
35,417
2,951
66,043
(825.54)
68,169
1,010,898
808,718
$
$
$
$
$
$
$
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
553,642
$
$
$
$
$
$
$
$
Month 29
34,783 $
255,077 $
Month 30
100%
35,417
2,951
68,169
(852.11)
70,268
1,081,166
864,933
4,167
4,583
2,500
8,502
19,752
573,394
$
$
$
$
$
$
$
$
$
$
$
$
$
Month 30
36,462 $
291,539 $
Month 31
100%
35,417
2,951
70,268
(878.35)
72,341
1,153,507
922,806
4,167
4,583
2,500
8,502
19,752
593,146
$
$
$
$
$
$
$
$
$
$
$
$
$
Month 31
38,121 $
329,660 $
Month 32
100%
35,417
2,951
72,341
(904.27)
74,388
1,227,896
982,317
4,167
4,583
2,500
8,502
19,752
612,898
$
$
$
$
$
$
$
$
$
$
$
$
$
Month 32
39,759 $
369,418 $
Month 33
100%
35,417
2,951
74,388
(929.86)
76,410
1,304,306
1,043,445
4,167
4,583
2,500
8,502
19,752
632,650
Month 33
41,376
410,794
Month 29
2
58
3,678
Month 30
2
60
3,814
Month 31
2
62
3,949
Month 32
2
64
4,085
Month 33
2
66
4,221
$
$
$
$
$
Month 29
1,918,875
2,021,796
20,175,933
16,140,746
136,338
$
$
$
$
$
Month 30
1,989,708
2,162,332
22,338,265
17,870,612
140,537
$
$
$
$
$
Month 31
2,060,542
2,307,015
24,645,279
19,716,224
144,683
$
$
$
$
$
Month 32
2,131,375
2,455,792
27,101,071
21,680,857
148,777
$
$
$
$
$
Month 33
2,202,208
2,608,612
29,709,683
23,767,746
152,820
$
$
$
$
$
$
241,667
259,967
145,000
460,650
1,107,283
16,104,357
$
$
$
$
$
$
250,000
269,133
150,000
477,654
1,146,788
17,251,144
$
$
$
$
$
$
258,333
278,300
155,000
494,659
1,186,292
18,437,436
$
$
$
$
$
$
266,667
287,467
160,000
511,663
1,225,797
19,663,233
$
$
$
$
$
$
275,000
296,633
165,000
528,668
1,265,301
20,928,534
$
$
Month 29
510,153 $
36,390 $
Month 30
583,078 $
619,468 $
Month 31
659,320 $
1,278,787 $
Month 32
738,837 $
2,017,624 $
Month 33
821,588
2,839,212
$
$
$
$
$
$
$
$
$
Month 29
100%
35,417
65,521
(9,828.13)
55,693
91,109
1,522,882
1,218,306
$
$
$
$
$
$
$
Month 29
53,135 $
664,664 $
Month 30
100%
35,417
65,521
(9,828.13)
55,693
91,109
1,613,992
1,291,193
$
$
$
$
$
$
$
Month 30
53,135 $
717,799 $
Month 31
100%
35,417
65,521
(9,828.13)
55,693
91,109
1,705,101
1,364,081
$
$
$
$
$
$
$
Month 31
53,135 $
770,935 $
Month 32
100%
35,417
65,521
(9,828.13)
55,693
91,109
1,796,210
1,436,968
$
$
$
$
$
$
$
Month 33
100%
35,417
65,521
(9,828.13)
55,693
91,109
1,887,320
1,509,856
Month 32
53,135 $
824,070 $
Month 33
53,135
877,205
$
$
$
$
$
$
$
Month 29
1,918,875
2,084,131
28,290,479
22,632,383
83,052
$
$
$
$
$
Month 29
1,647,553 $
21,525,100 $
Month 30
1,989,708
2,167,183
30,457,662
24,366,130
83,052
$
$
$
$
$
Month 30
1,713,994 $
23,219,342 $
Month 31
2,060,542
2,250,235
32,707,897
26,166,318
83,052
$
$
$
$
$
Month 31
1,780,436 $
24,980,026 $
Month 32
2,131,375
2,333,287
35,041,184
28,032,948
83,052
$
$
$
$
$
Month 33
2,202,208
2,416,339
37,457,524
29,966,019
83,052
Month 32
1,846,878 $
26,807,151 $
Month 33
1,913,319
28,700,718
$
$
Month 34
907,534 $
660,084 $
Month 35
996,634 $
727,715 $
Month 36
1,088,848
797,391
$
$
Month 34
3,746,746 $
1,513,438 $
Month 35
4,743,380 $
2,241,153 $
Month 36
5,832,228
3,038,543
$
$
$
$
$
$
$
Month 34
100%
35,417
2,951
76,410
(955.12)
78,406
1,382,712
1,106,170
$
$
$
$
$
$
$
$
$
$
$
$
$
4,167
4,583
2,500
8,502
19,752
652,403
$
$
$
$
$
$
$
$
Month 34
42,973 $
453,767 $
Month 35
100%
35,417
2,951
78,406
(980.08)
80,378
1,463,090
1,170,472
4,167
4,583
2,500
8,502
19,752
672,155
$
$
$
$
$
$
$
$
$
$
$
$
$
Month 35
44,550 $
498,317 $
Month 36
100%
35,417
2,951
80,378
(1,004.72)
82,324
1,545,414
1,236,331
4,167
4,583
2,500
8,502
19,752
691,907
Month 36
46,107
544,424
Month 34
2
68
4,357
Month 35
2
70
4,492
Month 36
2
72
4,628
$
$
$
$
$
Month 34
2,273,042
2,765,424
32,475,107
25,980,085
156,812
$
$
$
$
$
Month 35
2,343,875
2,926,179
35,401,286
28,321,029
160,755
$
$
$
$
$
Month 36
2,414,708
3,090,828
38,492,114
30,793,691
164,648
$
$
$
$
$
$
283,333
305,800
170,000
545,672
1,304,805
22,233,339
$
$
$
$
$
$
291,667
314,967
175,000
562,676
1,344,310
23,577,649
$
$
$
$
$
$
300,000
324,133
180,000
579,681
1,383,814
24,961,463
$
$
Month 34
907,534 $
3,746,746 $
Month 35
996,634 $
4,743,380 $
Month 36
1,088,848
5,832,228
$
$
$
$
$
$
$
$
$
Month 34
100%
35,417
65,521
(9,828.13)
55,693
91,109
1,978,429
1,582,743
$
$
$
$
$
$
$
Month 34
53,135 $
930,341 $
Month 35
100%
35,417
65,521
(9,828.13)
55,693
91,109
2,069,538
1,655,631
$
$
$
$
$
$
$
Month 36
100%
35,417
65,521
(9,828.13)
55,693
91,109
2,160,648
1,728,518
Month 35
53,135 $
983,476 $
Month 36
53,135
1,036,611
$
$
$
$
$
$
$
Month 34
2,273,042
2,499,391
39,956,915
31,965,532
83,052
$
$
$
$
$
Month 34
1,979,761 $
30,660,727 $
Month 35
2,343,875
2,582,443
42,539,359
34,031,487
83,052
$
$
$
$
$
Month 36
2,414,708
2,665,496
45,204,854
36,163,883
83,052
Month 35
2,046,203 $
32,687,177 $
Month 36
2,112,644
34,780,069

SaaS Salesforce Economics

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SaaS Salesforce Economics

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SaaS Economics - Ramping a SaaS salesforce

Part 1: Model the ecomomics of a single sales person

500,000 ACV (Annual Contract Value)

Churn Rate and Margin

Cost of Leads required to feed sales

$6,000 (ACV) Annual Contract Value

Other interesting Calculations

Excludes people costs

Bookings & Churn - Single Sales Hire

New MRR added this month

Part 2: Look at the Overall Economics when Ramping Sales Hires

Cost of leads required

Total MRR (Billings)

Part 3: Look at the impact of collecting 1 year's payment in adva

Renewable contract value

Net Cash Flows

Step 2: Look at the Overall Economics when Ramping Sales Hires

Net Cash Flows

Cells formated like this:

first four months

bookings to account for failed sales hires and attrition

Quick Marketing Calculation

ly productive sales person

MRR - Single Sales Hire

MRR from prior months

New MRR added this month

Cumulative Net Profit

Cumulative Net Cash Flows

Cumulative Net Cash Flows

are input variables

t of traffic that is organic versus paid

MRR Versus Expenses

added this month

Total MRR (Billings)

Cumulative Net Profit

Cashflow comparison - monthly payments vs year in a

Net Cash Flows

Cashflow comparison - monthly payments vs year in ad

Net profit - New Sales Hire

yments vs year in advance Cumulative Cashflow comparision - monthly payments vs yea

Cumulative Net Profit

Cumulative Net Cash Flows

ments vs year in advance

Cumulative Cashflow comparision - monthly payments

Cumulative Net Profit - New Sales Hire

hly payments vs year in advance

Cumulative Net Profit

monthly payments vs year in advance

Cumulative Net Profit

Cumulative Net Profit

Comparison of hiring 1 versus 2 sales people per mon

Data for hiring 1 sales person per month

New Sales Hires

1 sales hire a month

1 sales hire a month

1 sales hire a month

Cumulative Net Profit

1 sales hire a month

ple per month

1 sales hire a month

1 sales hire a month

2 sales hires a month

1 sales hire a mont