🎙️ Hey there, SaaSpreneurs!🎙️

🚀 Ben Murray here, welcoming you to another edition of our insightful discussions around SaaS metrics!

Today, I want to bring to your attention a crucial component of our operating expense profile—General and Administrative (G&A) expenses as a percentage of revenue. As a CFO, it's my job to ensure that our back office efficiency scales effectively with revenue growth.

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📓Key Concepts to Learn💡

Understanding the SaaS P&L Structure

• Ben takes us through the operational expenditure (OpEx) profile of a typical SaaS company, focusing on R&D, Sales, Marketing, and G&A—the critical components that fall below gross profit on the profit and loss statement.

The Importance of G&A Efficiency

• As a CFO, Ben emphasizes the importance of monitoring G&A spend to ensure back office efficiency as the company scales. Efficient management of G&A is crucial for maintaining a healthy financial structure. A path to sustainability requires a big focus on OpEx efficiency.

Benchmark Data from Ray Rike's Latest Survey

• According to Ray Rike's survey, the median G&A spend for SaaS companies is around 24% of revenue, with the low quartile at 35% and the top quartile at 15%. Ben explains how these benchmarks can help you set realistic targets for your company. But make sure you benchmark your G&A by company ARR size.

Scaling Strategies for G&A Expenses

• In the early stages, it’s common to see G&A expenses range from 30% to 40% of revenue. However, as the company grows, Ben advises targeting a G&A spend of 20% or less, transitioning from initial investments to more efficient scaling over time.

Why This Matters:

Understanding these metrics allows SaaS companies to:

• Optimize their back-office expenditures.

• Set realistic financial targets.

• Scale efficiently without unnecessary financial strain.

• Plan their G&A roadmap.

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If you found this episode helpful, make sure to tune in to future episodes of SaaS Metric School to broaden your knowledge of essential SaaS metrics and finance topics.

Got any burning questions or specific metrics you'd like us to cover?

Drop us a line, and we'll do our best to address them in upcoming episodes.

Until next time, keep hustling and measuring those metrics!

Best regards,
Ben Murray
Host of SaaS Metric School

P.S. Don't forget to subscribe to our podcast and share it with your SaaS business buddies. Together, let's conquer the world of SaaS metrics!

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