Transcript: Self-funded founders need to pay themselves out of profit. But a growing SaaS needs its profit as growth capital.
Hi, I’m Justin Talerico with Married2Growth.com and here’s some context around my recent article: SaaS Growth Strategy: Balancing Profit and Investment.
If you’re growing a sub-scale SaaS (and you’re not a unicorn), you’re not running to the Rule of 40. But your combined growth rate and EBITDA percentage is still worth evaluating and using a management guide. What percentage of profit you can live with, while preserving a growth rate greater than the rising tide, is how you get to your Rule of number. Getting your entire organization to buy into that number is the key to beating it and outperforming your growth projections. In my experience, it’s amazing how relatively small incremental improvements across teams can tighten up a P&L and accelerate top-line revenue growth.
Get more detail around balancing profit taking and growth in my article on Married2Growth.com. See you next time.