Tools in This Collection
SaaS Metrics Calculator
Calculate ARR, MRR, churn rate, LTV, and LTV:CAC ratio from subscription data
Customer Lifetime Value Calculator
Calculate customer LTV using simple and DCF methods with LTV:CAC ratio health check
AI ROI Calculator
Calculate the ROI of AI automation tools by comparing time savings against subscription costs
Subscription Cost Audit
Audit all your software subscriptions to find redundant tools and total monthly/annual spend
1099 vs W-2 Cost Calculator
Compare the real total cost of a 1099 contractor vs W-2 employee including taxes and benefits
Stock Options Calculator
Model ISO and NSO stock option exercise scenarios with tax impact and vesting schedule
Free Invoice Generator
Create professional PDF invoices instantly with line items, taxes, and custom branding
Guides & Articles
SaaS and Digital Business Workflow
Digital businesses have a unique set of financial metrics that don't apply to product or service businesses. Monthly recurring revenue, churn rate, customer acquisition cost, and lifetime value are the core dials that determine whether a subscription business is healthy or structurally broken.
The Core SaaS Metrics Dashboard
Start with the SaaS Metrics Calculator to compute your ARR, MRR, churn rate, and growth rate from raw subscription data. The single most important metric for early-stage SaaS is net revenue retention (NRR) — if NRR exceeds 100%, existing customers are expanding faster than they're churning. At 100%+ NRR, you'll eventually reach revenue growth without any new customer acquisition.
LTV:CAC — The Unit Economics Test
A healthy SaaS business requires an LTV:CAC ratio of at least 3:1 — customer lifetime value should be at least 3x the cost to acquire that customer. Below 1:1, you're losing money on every customer. The Customer LTV Calculator uses both simple (ARPU / churn rate) and discounted cash flow methods to compute LTV, then compares it against your CAC. If the ratio is unhealthy, the levers are: reduce churn (most impactful), increase price, or reduce acquisition cost.
AI Tools and Automation ROI
As AI subscription tools proliferate, the ROI calculation becomes important. The AI ROI Calculator compares time savings (hours/month × hourly cost of employee) against subscription cost to produce an annualized return on the tool investment. Many AI tools have very high ROI at low volume — the calculation helps prioritize which tools are worth keeping and which aren't.
Workforce Planning: 1099 vs W-2
The 1099 vs W-2 decision is partly financial and partly legal (misclassification risk). Financially, contractors typically cost 15-30% more per hour than employees when true W-2 cost is calculated. But employees have ongoing costs (benefits, overhead, management) that make contractors more cost-effective for variable or project work. The 1099 vs W-2 Cost Calculator shows the break-even hourly rate at your benefits level.
Frequently Asked Questions
What is a good churn rate for a SaaS business?
Monthly churn benchmarks: enterprise SaaS (annual contracts) under 1% monthly, mid-market 2-5%, SMB 5-7%. Annual equivalents: enterprise under 12%, mid-market 24-60%. High churn is the leading indicator of product-market fit problems. No amount of customer acquisition fixes structural churn above 7-8% monthly.
How do I calculate customer lifetime value (LTV)?
Simple LTV = ARPU / monthly churn rate. If average revenue per user is $50/month and monthly churn is 5%, LTV = $50 / 0.05 = $1,000. More sophisticated DCF-based LTV discounts future cash flows by your cost of capital. The Customer LTV Calculator computes both and shows the LTV:CAC ratio.
What is the Rule of 40 for SaaS?
The Rule of 40 states that a healthy SaaS company's revenue growth rate plus profit margin should equal or exceed 40%. A company growing at 60% can operate at -20% margin and still pass. A mature company growing at 10% should show 30%+ profit margin. Below 40% combined signals either slow growth or poor unit economics.
Should I hire a contractor (1099) or employee (W-2)?
The IRS applies a multi-factor behavioral control test to determine worker classification — misclassifying an employee as a contractor carries significant tax and legal risk. Financially, W-2 employees have higher fixed overhead but lower hourly cost for ongoing full-time work. Contractors cost more hourly but are appropriate for project-based, specialized, or variable-hours work.
How often should I audit my SaaS subscriptions?
Quarterly is sufficient for most teams. Annual is the minimum. Studies show companies typically discover 20-30% of subscriptions are unused or duplicative on their first audit. A subscription audit is particularly valuable after mergers, team changes, or when adding new tools without offboarding old ones. The Subscription Cost Audit tool helps catalog all active subscriptions in one place.