Advice for B2B SaaS Finance Leaders Navigating an Uncertain Economy

Everything is a bit upside down for SaaS businesses these days.

A year ago, in August of 2021, it was all about growth at all costs.

Now, SaaS businesses aren't valued like they used to be, efficiency is back in style, and there are just so many unknowns with the economy.

And, despite all of this, finance leaders still need to forecast and strategically guide their companies.

It's tough.

That’s one reason we sat down with the CFO of Gainsight, Alka Tandan, to hear her advice for B2B SaaS finance leaders in the current economy.

1) Prioritize efficiency

Alka says it’s time to honestly ask yourself what’s crucial for your business.

“A lot of this is just getting really responsible and conscious”, she explains.

‍She recommends an analysis of your top three expenses as a company (and probably your T&E) and asking yourself if anything needs to be moved.

Alka notes that while growth used to take center stage when raising, investors are starting to emphasize high efficiency when they’re gauging business health. So, if you’re looking to begin raising soon, efficiency is even more crucial.

This means you need to renew your focus on metrics like NRR, free cash flow, CAC Payback, and Rule of 40.

💡 Note: Subscript makes monitoring efficiency easier by giving you instant access to all your key sales efficiency metrics, so you can spend your time focused on business strategy.

2) Emphasize scenario planning

Scenario planning helps businesses prepare for multiple outcomes. It’s important to have a clear plan for how your business will respond to a variety of possible situations.

Alka recommends preparing for three outcomes after you set your financial goals: hitting below target, at target, and above target.

Of course, a plan for hitting below target ensures that you’re covered in the worst-case scenario. If you’re prepared ahead of time, you can often prevent some of the biggest hits to your business.

On the other hand, it’s also important to know what you’ll do if you exceed expectations. That way, you’ll be able to capitalize on that momentum and lead your business to an even better outcome.

3) Get realistic about your goals

Speaking of goals: it’s likely that yours will need to change in response to the current situation. For example, if you were planning to raise this year, you might find that you won’t actually be ready until your business can be a bit more efficient.

Alka acknowledges that there are always a few companies offering the right services to benefit from economic downturns. If you’re lucky enough to be managing one of these companies, you may be able to make your goals even more ambitious than before.

However, most businesses will find themselves in the other camp. Don’t panic - with thoughtful planning, you can rest assured that you’re prepared for whatever comes your way.

4) Revisit your plan frequently

Alka emphasizes that things are moving fast right now. You must move quickly too.

Once you’ve completed your scenario planning, make sure you revisit frequently to ensure that you’re still on track. This way, you can detect problems early and act accordingly.

“We plan a very extensive budget every year, and revisit mid-year,” she says. “We are in the middle of scenario planning as we speak, and will revisit again in a quarter”.

She adds that some public companies that have debt do their scenario planning every single time interest rates rise. If you’ve been slacking on that front, now’s the time to pick up the pace.

The bottom line

The current economy doesn’t have to be a dealbreaker for your business. Subscript can take the headache out of B2B SaaS data analysis, so you’ll have more time and better data to help you fortify your financial strategy. Let us walk you through it.