Your growth model is the backbone of your business plan, and the foundation for building your sales organization. Your goal is to understand your growth drivers and interdependencies, to connect the dots so to speak, between inputs (investments) and desired outcomes (units and revenue).
As your company gains traction, you need from shift from a simple, linear investment model where, for example, an investment in 1 sales guy yields $X million in revenue, to a more advanced version that helps you achieve economies of scale. Here’s a free download to help you get started.
[shortcode_button url=”#saas_metrics” class=”fancybox-popup” align=”center”]Download Saas Metrics and Basic Growth Model[/shortcode_button]
As you build your growth model and plan, you need to consider a few important questions:
- How fast did / will you grow GAAP revenues?
- Are you using the right sales strategy (e.g. What is your primary mode of sales distribution: Field, Inside, Internet, or Mixed?)
- How long does it take for a sales new hire to achieve 100% fully-ramped targets?
- How much do you spend for $1 of new ACV from a new customer, for $1 of upsell from an existing customer, or to keep $1 by renewing an existing customer?
- How fast are you recovering costs (on a gross margin basis)?
- How efficient are you at bringing in new business while keeping your existing (e.g. SaaS Quick Ratio)?
- Are you keeping customers happy to prevent churn?
- Are you maximizing retention to deliver long-term profits?
About SalesSmyth
We created SalesSmyth because we knew there had to be a better way for growth stage companies to build their sales organizations. We’re sales leaders and consultants, so we’ve seen firsthand the effects of building a sales team by the seat of your pants: higher burn rates, lower valuations, and less control over the future of your company. So we ask ourselves the question that drives us, “What can we do to help entrepreneurs build high performing sales teams that lead to explosive growth?” We are on a mission to deliver torrents of revenue by designing, training and equipping sales organizations to do their very best work.
