SaaS Business Plan Model:

How to guide

Introduction
Welcome to the SaaS
Business Plan Model
Hi and thanks for buying my
SaaS Business Plan Model.
Hopefully this means you are
thinking about starting your own
business. Welcome to the world
of entrepreneurship! Founding
and running a start up is one of
the most exciting things you
can ever do.
I am sure you have a great idea
for your new business but you
need to figure out how to make
money from your inspiration. Or
maybe you have already got
things started but you need to
put together a business plan to
help you attract funding.
In these and many other
business situations, you need a
financial model for your
business. The whole business
of financial modeling is
shrouded in mystique, obscure
jargon and complexity. I know
that many people find it a little
scary. In fact I followed a recent
discussion on LinkedIn where a
very successful businesswoman
confessed that she “felt a failure
SaaS Business Plan Model
2
even before she started” with
her business plan model. This guide is here to make it
even simpler. It is a full, step by
This product is here to help. I step explanation of everything
have spent more than half my you need to build the model.
life working with finance and Many of the hints and tips in the
financial models. I have created guide are also included as
a spreadsheet which guides you comments in the model so you
through every step and does all can easily keep track.
the complex stuff without you
having to worry. It really is So what are you waiting for
incredibly simple to use. – let’s get on and build
your business plan
You will be able to produce
monthly forecasts, a business financial model!
plan summary, a dashboard of
key metrics and an investor
proposition quickly and
professionally. All you need to
do is think about the real stuff in
your business. The things you
really know and understand.
To make it even easier I have
included a bunch of default
options. These enable you to
produce a quick estimate of the
financial prospects for your
business by entering just 8
simple pieces of information.
That’s right just 8 easy steps
and you will have a full five year
forecast. Turn to page 6 if you
want to try this option.
 3

Who should use this last 5 years. Most now use one
model? of two approaches to entice
customers. The Free Trial model
allows customers to try the
This model and this guide are
software before deciding
designed for a software as a
whether to become a paying
service or SaaS businesses.
customer. The Freemium model
There are 6 key business
allows users to have a basic
models for the software
version of the software for free
industry: SaaS, Usage,
but some users will pay for a
eCommerce, Marketplace,
version with extra features.
Advertiisng and Licence. I will
be producing models for the
This model is built mainly for the
other 5 in the near future.
free trial approach because that
is the most common. Over
If you are planning to create a
45% of B2C SaaS businesses
SaaS business this model is for
and over 70% of B2B SaaS
you!
businesses use free trials.

In case you are not familiar,

You can adapt the model to
SaaS is defined as
work for a freemium business
a software licensing and
although this will be less
delivery model in which
intuitive than using it for a free
software is licensed on a
trial model. This is explained in
subscription basis and is
more detail in the notes under
centrally hosted. It is also
B: SaaS Inputs – Sales &
sometimes described as Pay as
Margins.
You Go software or On Demand
Software.
I have tried to include as much
as I can in the model and this
This model will work if you are
Guide. If you still have
building any kind of SaaS
questions or something is not
business. It will also work
clear then please get in touch
whether you are selling to
kenny@sunstonecommunicatio
consumers (B2C) or business
n.com
(B2B) or even through
businesses to consumers
(B2B2C).

SaaS businesses have

developed very quickly in the

SaaS Business Plan Model


What it does
This model allows you to input
estimates of all the key figures
that will determine the financial
performance of your SaaS
business.
The model uses those figures to
produce five year forecasts and
dashboards which show the
following:
• Performance
Dashboard – This
sheet shows the key
numbers which both
you and any potential
investors need to
evaluate the strength of
your business.
• Investor Proposition –
This sheet shows you
the numbers needed to
assess your business
as an investment. You
will need to include
some data in the Equity
Funding table at A20 to
generate meaningful
results in this sheet.
• Business Plan
Summary – This sheet
summarises your five
year forecasts of profit
or loss and cash flow. It
is presented in a simple You don’t need to worry about
conventional format any of these sheets. The model
which can easily be will calculate all of the figures
SaaS Business Plan Model
4
included in any and data in each tab. You
business plan template. simply need to use that
• Monthly P&L Forecast information as you need for
– This sheet sets out your business. You will never
the forecast Profit and need to enter anything in these
Loss (P&L) Account for reporting sheets and you can
your business every copy and paste the outputs into
month for each of five any document you would like.
years. It is presented in
a simple accounting Your work will be in completing
format but not in full the five input worksheets:
accordance with GAAP
in the UK or any other A: General Information –
country. Includes all the basic
• Monthly Cash Flow information which is used in
Forecast – This sheet various places. Everything from
sets out the forecast the name of your business to
cash flows for your tax rates. This sheet also
business every month includes your plans for funding
for each of five years. It your business.
is presented in a simple
accounting format but B: SaaS Inputs – Sales &
not in full accordance Margins – This is where you
with GAAP in the UK or input everything you need to
any other country. forecasts your revenues and
• Annual Balance also the direct costs for your
Sheets – This sheet business so that you will be
sets out the balance able to see your forecast gross
sheet at the end of each margins.
year of your financial
forecast. It is presented C: SaaS Inputs – People –
in a simple accounting Paying people to do the work
format but not in full will be your biggest cost
accordance with GAAP whether it is you and your co-
in the UK or any other founders, people you employ
country. directly or outsourcing to
specialists for help. This sheet
captures inputs for all the
options.

D: SaaS Inputs – Costs –
Good businesses make money,
great businesses also plan for
and manage their costs. This is
where you will capture the
inputs needed to forecast all the
other costs in your business.
E: SaaS Inputs – Set up – You
may need to incur some
expenses before your business
gets up and running. You can
capture these in this sheet and
account for them in your
forecasts.
The model also has a couple of
other worksheets where all the
calculations take place. You will
not be able to see these at any
stage. If you are really
interested in what happens
under the hood, just let me
know.
Using this model
This model is designed to
calculate forecasts of future
business performance based on
user inputs and using
commonly accepted accounting
and financial techniques. There
is no magic sauce which makes
these forecasts any more likely
to be accurate than forecasts or
estimates produced any other
way. Using this model will not
make any specific financial
outcome more likely and you
SaaS Business Plan Model
should not rely on the forecasts
produced. The future is
uncertain and the real outcome
will certainly look different form
the forecasts.
The model uses commonly
accepted accounting and
financial techniques and the
figures should therefore be
credible and easy to explain to
advisors and potential
investors. The model does not
calculate or present figures in
accordance with generally
accepted accounting practices
(GAAP) in the UK, the USA or
any other country. Your P&L
Account, Cash Flow and
Balance Sheet forecasts will be
familiar but they will not comply
with the GAAP or legal
requirements of any individual
country.
The model offers a Default
option for many of the figures
and assumptions required.
These default options are based
on a number of credible
sources (see table below) and
generally reflect current UK
economic conditions and
circumstances. This does not
mean they are right or
appropriate for your business
even if it is based in the UK.
They are even less likely to
apply if you are based
elsewhere in the world and
5
some defaults, for example tax
rates, will almost certainly be
wrong.
If you choose to use the
defaults this will give you a
rough working estimate quickly
and easily. However, the lack of
refinement will increase both
the risk of your forecasts being
wrong and the margin of error.
This model is copyright of
Sunstone Communication Ltd, a
company registered in
Scotland. All rights are reserved
to Sunstone Communication
Ltd and you cannot use this
model unless licensed to do so
by Sunstone Communication
Ltd. It depends on Microsoft
Excel which is a software
product of Microsoft
Corporation. All rights and
intellectual property in Excel are
reserved to Microsoft
Corporation. You should not
use this model without a licence
to use Excel.
Neither Sunstone
Communication Ltd nor
Microsoft Corporation accept
any responsibility for the inputs,
calculations, outputs or results
produced by this model.
 6

8 Simple Steps

Producing a good financial model for your business needs a lot of thinking and requires a lot of inputs –
even with a well built model like this to rely on. When you come up with the idea, you may just want a
decent working set of estimates to build a fell for the viability of your business idea. This model allows you
to do just that – in just 8 simple steps.

All that is needed is to click a few buttons to Yes or No so that the model relies on default information and
then input a small number of key estimates. Here is how it works:

That really is all you need. The caveats about using defaults all apply in full measure to the forecasts this
will produce but it will give you a coherent working set of forecasts to get started.

SaaS Business Plan Model

 7

Guide to the model

This table sets out the various colours, conventions and styles which are used throughout the model.

Referencing – The remainder of this guide is split into sections with one section for each input worksheet
lettered A to E. Each section is numbered to show the part of the input worksheet which the notes cover.
These references are reproduced in the worksheet so that you can easily check the relevant notes. For
example, the Business Name field has the reference A1 beside it in the General Information input
worksheet.

SaaS Business Plan Model

 8

Default sources
The model includes a number of default options. This table sets out the source of each default. Use this to
explain to an advisor or potential investor if you have used defaults. Or just use it to decide whether the
default is appropriate for your business.

SaaS Business Plan Model


A: General Information
The first input work sheet is
called General Information. In
this worksheet you will
provide some basic facts and
confirm or adjust some simple
assumptions that affect many
of the inputs and outputs of
the whole model. Most of
these are fairly self
explanatory.
Basic information
1. Business Name: Type the
name of your business or
company in this box and it will
appear at the top of all the
input worksheets and the
forecasts and dashboards.
Don’t worry if you decide to
change your mind about the
name. It can be changed at
any time.
2. Principal Country of
Operation: Type in the
country where your business
will be based. This is just for
reference at the moment.
Hopefully your business will
go global but it will still have a
home base. Again, you can
change this at any time.
3. First month of operation:
This field has a drop down list.
Click on the month and year
you intend your business to
get started. Please use the
SaaS Business Plan Model
format in the box as this will
enable the model to populate
all of the date fields in your
input worksheets, forecasts
and dashboards.
Note that this is when you will
start working on your
business. It is not the first
month that your product will
be on sale. We will capture
that in the next field.
4. First month of sign ups:
This field has a drop down list.
Click on the month and year
you intend that your product
will be available for use. You
can choose the same month
as the First month of
operation in 3 above. You
must make a choice in this
field. Please use the format in
the box as this will ensure that
your sales appear at the right
dates in your forecasts and
dashboards.
The language here may seem
a little odd but it is important.
Many SaaS businesses offer a
free trial period (we will
address this in the next input
worksheet) and therefore the
date when customers first
sign up for your product may
be different from the date of
your first paying customers.
You don’t need to worry about
9
the difference. With this field
and the free trial field, the
model will work all this out for
you.
Note also that sign up here
means the month and year
when your product will be
available to use. If you plan to
use a simple sign up page as
a marketing tool this is not the
same thing.
5. Which currency will you
use?: This field has a drop
down list with three
currencies: Pound Sterling,
Dollar and Euro. Click on one
of these if that is your
currency and the model will
automatically put the right
symbols in all your input
worksheets, forecasts and
reports. If you need to use
another currency then click
other. You will also need to
type the currency symbol in
the next field and the model
will then pick up this symbol.
Note if you leave this field
blank then no currency
symbol will appear.
6. If other please enter
symbol here: This is a blank
field. Please enter the
currency symbol you want to
use if you are NOT using the
Pound, Dollar or Euro. You

must also click Other in the
previous field for this to work.
Note if you leave both this
field and the previous field
blank then no currency
symbol will appear.
7. Which rounding option
would you like for forecasts
and dashboards?: All of the
main input sheets and
forecasts in the model are to
the nearest currency unit
(Pound, Dollar, Euro etc).
There are no pennies or cents
but otherwise full detail. Many
people prefer to round their
numbers especially in
business plan summaries and
similar documents. If you
would like to do this simply
check the option of
Thousands or Millions. The
symbols in the dashboards
will change and the numbers
will be rounded as
appropriate.
Economic assumptions
table
This is the bit that many
people with no financial
background find a bit scary.
Don’t worry about it. I have
made it as easy as possible
for you.
This provides your first
chance to take advantage of
the Default setting in the
model. Simply select Yes in
the first field and all the
numbers will be completed for
you. One big caveat. These
numbers are based on the
SaaS Business Plan Model
current UK position. They will
be pretty good defaults if your
business is UK based but
many of them will not apply in
other countries. If you want
some assumptions for other
locations, follow the guidance
or let me know.
8. Would you like to use
defaults for the Economic
assumptions table?: Simply
click Yes and everything else
is done for you. Click No and
you can choose your own
assumptions for each number.
Model Assumptions and
User Inputs
These tables have two
sections. The Model
Assumptions section is on the
Left and shows the numbers
which are currently being
used by the model. When you
open the model these are set
to the Default option and they
will remain at this option if you
click Yes to question 8.
If you click No to question 8
these fields will become
blank. Switch your attention to
the User Inputs section on the
Right. Input your assumptions
into these fields and the
Model Assumptions section
will reflect your inputs. You
can switch back to the
Defaults just by changing you
answer to question 8 at any
time subject.
Note: If you click No then the
you must input your
assumptions to the User
10
Inputs section of the table.
You cannot just write them
straight into the Model
Assumptions section.
9. No of annual tax
payments: First up the
wonderful world of tax. These
assumptions are about the tax
levied on your business not
about the personal tax you or
your employees will have to
pay on earning or even on that
multi million pound exit.
This field refers to the number
of payments of tax your
business must make every
year. This is usually 1 or 2 (for
small companies the UK is 1
for example) but the model
allows for up to 4. The User
Inputs section has a drop
down so just check any
number between 1 and 4.
The model is also designed to
make tax payments in arrears.
This simply means that if you
earn a profit one year, you will
pay the tax on that profit the
following year.
If your business is not based
in the UK, you will need to find
out how many tax payments
are required each year where
you live. You can usually
check this online at the
website of your local tax
authority. The large
accounting firms (PwC,
KPMG, Deloitte, Ernst &
Young) websites often have
easy to read local tax guides
online as well. Remember you
are looking for Company,
Business or Corporate tax.

10. Timing of tax payments:
In virtually every country in the
world tax is paid in set
months of the year. In the UK
tax is paid 9 months after the
end of the financial year in
which the profit is earned so
for the year ending 31
December 2014 tax will be
payable on 1 October 2015.
The User Inputs section has
drop downs for each payment
so simply check the correct
month for as many payments
as you need up to the
maximum of 4.
If your business is not based
in the UK, you will need to find
out when tax payments are
due. You can usually check
this online at the website of
your local tax authority. The
large accounting firms (PwC,
KPMG, Deloitte, Ernst &
Young) websites often have
easy to read local tax guides
online as well. Remember you
are looking for Company,
Business or Corporate tax.
Note: You MUST enter at least
one month in the User Inputs
table if you are not using the
Defaults. Otherwise the model
will not deduct tax payments
in the cash flow and your
numbers will be wrong.
11. Is your business
registered for VAT?: This
field refers to VAT as operated
in the European Union (“EU”).
VAT is a very complicated
system and no model can
cope with all the relevant
SaaS Business Plan Model
variables. However, it can
have major pricing and cash
flow implications so it is worth
building in a working model.
This will give your business
plan credibility and realism.
Use the bullet list below to
decide whether to click Yes or
No.
This model works on some
simple VAT defaults based on
the UK system. All countries
in the EU work on the same
principles but details such as
rates of VAT, timing of
payments and which
categories of goods and
services are subject to VAT
may differ. The model allows
for most of these variations.
However, it is restricted to
one rate of VAT and will not
cope with several different
rates for different products.
With this proviso, it should
provide a realistic estimate of
the VAT impact on financial
forecasts for any EU country.
If your business is based in an
EU country then consider the
following:
• If this is all too
complicated or you
are not yet ready to
decide on your
approach to VAT then
just click No.
• If you are registered
or plan to register for
VAT AND your
product or service is
subject to VAT then
click Yes.
• If you are registered
or plan to register for
VAT but your product
11
or service is Zero
rated or not subject to
VAT ( for example
Food, Books or
Financial Services in
the UK) then click No.
• If your business is in
an EU country but you
are not planning to
register for VAT then
click No.
• If you live in another
country with VAT or
similar then the same
principles may work
but you will need to
check. You can
usually check this
online at the website
of your local tax
authority. The large
accounting firms
(PwC, KPMG,
Deloitte, Ernst &
Young) websites often
have easy to read
local tax guides online
as well. Remember
you are looking for
Vat or value added
tax or similar.
If your business is based in a
country which uses a Sales
Tax system, for example the
USA, then you should click
No. At present the model
does not have the capability
to apply Sales Tax. However,
this should only have minor
cash flow implications.
12. Do you pay VAT monthly
or quarterly?: This field is
only relevant if you answered
Yes to question 11.
Depending on which country
your business is based in,

VAT may be collected from
you either monthly or
quarterly. Quarterly is usual in
the UK so this is the default.
If you are not based in the UK
you will need to check. You
can usually check this online
at the website of your local
tax authority. The large
accounting firms (PwC,
KPMG, Deloitte, Ernst &
Young) websites often have
easy to read local tax guides
online as well. Remember you
are looking for VAT or value
added tax or similar.
13. Interest rate: This field
sets the interest rate which
will be applied to any Loans or
similar debt financing. Interest
will appear in the P&L and
Cash Flow as Financing
Costs. The model allows you
to vary the rate of interest for
each year of your forecasts.
Note: This is NOT the Central
Bank Base Rate for the
country where your business
is based. Interest rates on
business finance will be
considerably higher than the
base rate.
The interest rate Default
reflects current UK economic
conditions and the
considerable margins typically
charged on loans to start ups
in the UK. Both the base rate
and the likely level of
borrowing cost above base
rate may vary in other
countries. If you are likely to
borrow money this can make
a very big difference so it is
SaaS Business Plan Model
well worth checking.
Unfortunately, you are likely to
find a lot of different
predictions and the range of
options will become larger the
further forward your forecast.
Just find a credible source so
that you can refer to this if
need be. Central Banks will
often give forecasts for at
least the next year and if you
add a few percentage points
this will be realistic for
investors.
14. Inflation rate: This field
sets the annual rate of
increase which will be applied
to relevant elements of your
cost base in the P&L and
Cash Flow forecasts. Inflation
is not applied to sales prices,
direct costs, sales &
marketing costs or wages as
these are set separately. The
model allows you to vary the
rate of Inflation for each year
of your forecasts.
Inflation is even harder to
predict than Interest rates and
there are many developed
countries which currently face
the risk of Deflation. The
default rate is based on
current UK economic
conditions. If your business is
not based in the UK you will
need to check. Central Banks
will often give forecasts for at
least the next year and this is
regarded as the most reliable
source.
15. Business tax rate: This
field sets the rate of tax that
will be used to calculate the
tax due on business profits. In
12
the UK this is called
Corporation Tax. The model
does not allow for any form of
tax planning. It applies a
simple flat rate to the forecast
profits. The model allows you
to vary the rate of tax for each
year of your forecasts.
The Default is based on the
current UK tax rate. If your
business is not based in the
UK you will need to check.
You can usually check this
online at the website of your
local tax authority. The large
accounting firms (PwC,
KPMG, Deloitte, Ernst &
Young) websites often have
easy to read local tax guides
online as well. Remember you
are looking for Company,
Business or Corporate tax.
16. VAT rate: This field sets
the rate of VAT which will be
used to calculate the VAT
element of both sales and
costs in the P&L and Cash
Flow forecasts. It is only
relevant if you answered Yes
to question 11. The model
allows you to vary the rate of
VAT for each year of your
forecasts.
The Default is based on the
current UK VAT rate. If your
business is not based in the
UK you will need to check.
You can usually check this
online at the website of your
local tax authority. The large
accounting firms (PwC,
KPMG, Deloitte, Ernst &
Young) websites often have
easy to read local tax guides
online as well. Remember you

are looking for VAT, value
added tax or similar.
The model only allows for one
rate of VAT to be applied in
each year.
17. Employment tax rate:
This field sets the rate of tax
which will be applied in
addition to wages and
salaries. It refers to taxes
levied on employers
sometimes also called payroll
taxes. It does not apply to
taxes deducted from
employee wages as these are
the liability of the employee. In
the UK this tax is known as
Employers’ National Insurance
(“NI”). The model allows you to
vary the rate of tax for each
year of your forecasts.
The Default is based on the
current UK Employers’ NI rate.
If your business is not based
in the UK you will need to
check. You can usually check
this online at the website of
your local tax authority. The
large accounting firms (PwC,
KPMG, Deloitte, Ernst &
Young) websites often have
easy to read local tax guides
online as well. Remember you
are looking for employment
taxes, payroll taxes or similar.
Funding table
So far we have covered a
bunch of essential but quite
technical information. Mostly
it is the stuff you can’t control
but you need to know in order
to arrive at a realistic set of
SaaS Business Plan Model
projections. The Funding table
deals with some big choices
and options. Where does the
money come from? How
much of your business are
you prepared to sell to outside
investors?
These are wide and varied
choices and for this reason
there are no defaults in this
section. It is possible to
generate a perfectly usable
forecast without anything in
this section. It will just show
an unfunded deficit. You
should do this first in any case
as it will help you figure out
how much money you need.
I strongly recommend that
you complete this table last.
Fill in the other General
Information and all the other
input worksheets then come
back to the Funding table.
Nothing in the table is needed
unless you are considering
potential outside investment.
You can leave the table blank
as long as you like but
remember that the Investor
Proposition Dashboard will
also be incomplete.
Unless you are very lucky, you
will also need some money at
some stage to get your
business off the ground. This
table will help you think out
your options in terms of
sources of money, timing of
investment and implications
for your finances.
Once populated, the Funding
table will also automatically
13
generate a basic Investor
Proposition which you can
include in your pitch when the
time comes.
18. What percentage of your
business do you intend to
sell?: This field sets the
percentage of the Equity in
your business that you will
offer to outside investors.
Simply input the figure.
There is no right answer to
this question. In summary you
need to think about the
shareholding you and your
founders would like to retain,
the shareholding a later stage
VC will request (about 30%)
and the pool of equity you
want to have available to
incentivize your team.
Note: The value of your
business in the Investment
Proposition Dashboard will be
driven off this figure and the
answer to question 18.
Traditional valuation models
such as profit or revenue
multiples are not practical for
start ups because of the level
of uncertainty.
19. How much money do
you plan to raise?: This field
sets the total value of external
equity investment that you
would like for your business. It
does not include other
sources of funding or equity
investment made by the
founding team or their friends
and family.
20. Equity funding: This field
captures all of the funds for

your business from
shareholders or other equity
investors. There are no
financing or other costs
associated with this type of
funding. If you are offering a
funding instrument that
attracts interest you will need
to include this in the
Borrowing section below.
The first line in the table is
Initial Equity investment. In
this field enter the figure
which you intend to launch
the business with whether
from your own funds, other
founders or friends and family.
Don’t worry about the date.
For simplicity the model puts
these funds into the business
on day one. It doesn’t matter
for business planning
purposes if it might take you a
few weeks to actually pull this
together.
The remaining lines allow you
to spread external equity
investment raised over up to 3
rounds. Simply enter the
amount and the date on which
you plan to raise the funds in
one or more lines.
There is an automatic field at
the bottom called Total
external equity check. This
confirms that the total amount
entered in response to
question 18 has been
allocated to Equity rounds.
This box should be zero
otherwise the model will show
imbalances.
Note: You must enter some
information in this table if you
SaaS Business Plan Model
14
want to generate meaningful variety of grants and other
output in the Investor awards such as pitching
Proposition dashboard. competitions. If you believe
your business is or will be
21. Borrowing: This table eligible for such funding
allows you to enter up to 5 include the amounts in this
loans as part funding for your table.
business. The table is only to
be used for loans. The model These amounts will flow into
does not assume a variable your cash balances but will
funding facility such as an not be included in the P&L
overdraft. In my experience all account. The model also
types of borrowing are assumes that no such funding
currently very difficult to will be repayable and it will
obtain for any business and not attract interest, dividends
the only option is some type or any other form of payment
of loan funding at a fixed cost. to the provider of the funds.
This table at least offers you
the option of evaluating loan
financing.
The table allows the following
elements for each loan:
• The date on which
you plan to draw
down the loan.
• The amount of the
loan.
• The date on which
you will start making
repayments.
• The number of
months over which
the loan will be
repaid.
Interest will accrue on the
loans at the rate set in the
Economic assumptions table.
All interest charges and
repayments are calculated
automatically based on the
information provided.
22. Other sources of
funding: Governments,
charities, incubators and
corporations offer a wide

B: SaaS Inputs – Sales & Margins
OK you have now entered the
most important general
information. The next
worksheet deals with the first
SaaS specific elements of
your business plan. You are
going to use this worksheet to
calculate the forecast sales
and margins for your new
business idea.
There are a number of points
in the worksheet where you
can choose to use the default
option to make things simpler
for you. You can’t opt for
defaults in everything – you
have to make some choices
for yourself.
You also need to spend a little
time on this worksheet. This is
where the commercial power
of your ideas will be captured
and these assumptions will
probably be the focus of
many questions that advisors
or potential investors ask you.
Where defaults are available,
the tables are split into two
sections. The Model
Assumptions section is on the
Left and shows the numbers
which are currently being
used by the model. When you
open the model these are set
to the Default option and they
will remain at this option if you
SaaS Business Plan Model
click Yes to question 3, 8, 11
or 16.
If you click No to question 3,
8, 11 or 16 these fields will
become blank. Switch your
attention to the User Inputs
section on the Right. Input
your assumptions into these
fields and the Model
Assumptions section will
reflect your inputs. You can
switch back to the Defaults
just by changing you answer
to question 8 at any time.
Sales table
Throughout this table, the
model assumes that if your
business is registered for VAT
(that is you clicked Yes to
question A:11) sales are
subject to VAT. This means
any price you enter will
automatically be reduced by
the amount of VAT included
for the revenue line in the P&L
Account. forecast The full
amount is included in the
Cash Flow forecast.
For example, assume you are
applying UK VAT of 20% to
the prices in the subscription
table at point 10. A price of
£10 will be the gross cash
amount which feeds the
calculation in the Cash Flow
forecast. The price for the P&L
15
Account forecast will be £10 x
(100%/120%) = £8.33. The
difference of £1.67 will feed
into the calculation of VAT
payable or refunded in the
Cash Flow forecast.
1. Would you like to set a
target number of paying
customers?: This is your first
choice. This field allows you
to simply set a target number
of paying customers that you
plan to reach at the end of
each year.
If you choose this option then
the model will ignore all of the
rest of the Sales table.
Whether you click yes or no in
field 3 below will make no
difference. All sales will be
calculated from this number.
The model Defaults are based
on the most common SaaS
approach to customer
acquisition which is a
combination of organic search
and advertising through social
media and search engines. If
you plan to acquire customers
by other methods, for
example direct selling then
you should click Yes to this
question.
2. Total expected number of
paying customers: This field
sets the forecast number of

paying customers at the end
of each year for the model.
If you clicked Yes to question
1 above you must enter a
number for each year. If you
do not enter a number then
the model will show Zero
sales for that year.
If you clicked No to question 1
above then leave this field
blank. The model will show
you the forecast number of
paying customers based on
the rest of the Sales table in
the forecasts and
dashboards.
3. Would you like to use
defaults for the Sales table?:
This field allows you to
automatically choose default
options for Monthly Churn,
Acquisition cost per sign up
and Conversion rate in the
Sales table.
The default options in this
table are based on industry
research and my experience
of SaaS early stage
companies. You are free to
choose other options.
If you choose higher figures
for Conversion rate or lower
figures for Monthly Churn and
Acquisition cost per sign up,
you may be challenged by
expert advisors or potential
investors. I would advise that
you have a good plan to show
how you will achieve better
results than the industry
average. On the other hand
no-one wants to invest in the
average so this may be a
SaaS Business Plan Model
strength if you have thought
through your answers.
There is no default option for
Monthly marketing budget.
4. Acquisition cost per sign
up: This field sets the cost of
acquiring a new sign up by
advertising through search
engines or social media. The
default option is based on UK
prices and experience in the
UK market. The default may
not be appropriate for other
countries.
Note: This is the cost of
persuading someone to sign
up for a free trial. The model
will calculate the cost of
acquiring a paying customer
separately.
The default assumption in the
model is that you will build
your SaaS business on a free
trial model. However,
approximately 15% of SaaS
businesses, mainly B2C,
adopt a freemium model. If
you intend to adopt this
model, the acquisition cost
per sign up may be lower than
the default. In my experience,
freemium businesses also
require much higher spend in
5 below to build up an
adequate base of free users
and therefore attract enough
paying customers. This is
because conversion rates –
see 6 below – are lower and
churn – see 7 below – is
higher.
5. Monthly sign up budget:
This field set the amount you
16
will spend on advertising
intended to persuade people
to sign up each month. You
must set an amount in this
field otherwise the model will
show zero customers and
zero revenue.
It is possible to acquire
customers organically by
gaining search engine
rankings which highlight your
site or app. However, this is a
very slow process. No matter
what others may tell you, it is
not a realistic option to get a
business off the ground
unless you have a large
number of existing on line
followers.
If you believe you can acquire
significant numbers of sign
ups organically then the way
to deal with this in the model
is to have a higher conversion
rate. This will have the effect
of making each customer
cheaper to acquire but you
will not be able to set the
customer acquisition cost to
zero. No potential investor
would believe this and you
should be honest with yourself
about the cash costs involved
in this important category.
The default assumption in the
model is that you will build
your SaaS business on a free
trial model. However,
approximately 15% of SaaS
businesses, mainly B2C,
adopt a freemium model. If
you intend to adopt this
model, the acquisition cost
per sign up – see 4 above -
may be lower than the default.

In my experience, freemium
businesses also require much
higher spend in this field to
build up an adequate base of
free users and therefore
attract enough paying
customers. This is because
conversion rates – see 6
below – are lower and churn –
see 7 below – is higher.
6. Conversion rate: This field
sets the rate at which sign ups
will be converted into paying
customers each month. The
default is based on industry
experience of free trial based
SaaS companies. If you click
No for question 3, you must
enter a number in the User
Inputs section or the model
will show zero revenues.
Conversion rates vary
significantly. If you believe you
can achieve higher conversion
rates over time then feel free
to include this in the model.
However, make sure you
know what unique value you
will offer or marketing
approach you will adopt to
support this.
The default assumption in the
model is that you will build
your SaaS business on a free
trial model. However,
approximately 15% of SaaS
businesses, mainly B2C,
adopt a freemium model. If
you plan to adopt this
business model conversion
rates are likely to be much
lower and you should not use
the defaults. Conversion rates
of less than 1% are standard
SaaS Business Plan Model
for freemium businesses and
hence such businesses
require higher marketing
spend to attract a much larger
sign up base.
7. Monthly Churn: This field
sets the number of paying
customers that you will lose
each month. The default
option is 1% based on current
industry experience.
Churn rates do vary a bit. If
you believe you can achieve
lower churn rates over time
then feel free to include this in
the model. However, make
sure you know what unique
value you will offer or
marketing approach you will
adopt to support this.
The default assumption in the
model is that you will build
your SaaS business on a free
trial model. However,
approximately 15% of SaaS
businesses, mainly B2C,
adopt a freemium model. In
my experience, these models
have a much higher churn
rate.
Subscription table
This table sets the pricing for
your SaaS product. There are
a number of default options.
You should use these if you
have not been able to carry
out any market research.
If you have been able to test
pricing levels or at least
research the pricing your
competitors are using, then
this information will be more
17
reliable than the defaults and
you should click No to
questions 8 and 11 then
complete the User Inputs
sections.
The table is split into two
smaller tables. The first deals
with the pricing of
subscription plans and the
second with the mix between
different levels of pricing. You
can choose the defaults for
one or both of these factors.
8. Would you like to use the
defaults for subscription
pricing?: This field allows you
to automatically choose the
pricing levels for up to 5 SaaS
subscription plans. The
number of levels is your
choice, there is no default.
The defaults are based on
industry experience across a
number of cloud based B2B
SaaS products in the UK
market. The levels which
prevail in other countries may
be different. Different types of
product or different target
markets may also have very
different levels.
9. Number of subscription
plans: This field allows you to
choose how many different
subscriptions plans you will
offer up to a maximum of 5.
You must enter at least 1 or
the revenues in the model will
be zero.
SaaS companies typically
offer a number of different
versions of the software with
more features and,

sometimes, greater volumes
as the price increases.
There is no default for this
field but most SaaS
companies currently offer 3-5
different plans. The maximum
allowed by the model is 5.
10. Pricing: This sub table
allows you to set the prices
for each subscription plan up
to a maximum of 5 pricing
levels. If you have clicked Yes
to question 8 the table will be
filled automatically with the
default prices. If you have
clicked No to question 8 you
will need to complete the User
Inputs section of this sub
table. You can only use the
number of lines in the table
set by your answer to
question 9.
11. Would you like to use the
defaults for subscription
mix?: This field allows you to
choose the default
subscription mix. The mix is
the percentage of paying
customers who choose each
subscription level. The default
is set to be an even spread
between each pricing plan.
If you click Yes to this
question the model will create
an even split between each
subscription level. For
example if you choose 3
subscription levels then one
third of paying customers will
be assumed to have chosen
each of the three
subscriptions.
SaaS Business Plan Model
The default here is somewhat
arbitrary. The mix of paying
customers who choose
different levels of subscription
varies widely so there is no
real industry standard. Use
the default if you would like to
get a quick and usable view of
your potential revenues. If you
have any market research or
marketing plans to rebalance
the mix towards one or more
subscription levels then click
No for this question.
If you click No for this
question you will need to fill in
the User Inputs section of the
table. You must enter at least
one percentage otherwise the
model will show zero
revenues. You should also
ensure the total allocated
adds up to 100% otherwise
the model will effectively treat
some customers as paying
nothing for your product.
Similarly if the total is more
than 100% the model will
create more paying customers
than you have actually
forecast.
The model shows you the
total so you can check if
100% has been allocated.
12. Other sales questions:
This sub table covers some
other options for forecasting
sales. You may choose to
ignore these or use them if
you believe they will help you
model your business more
realistically.
13. Do you expect seasonal
variation in sign ups?: This
18
field allows you to decide
whether your level of sign ups
will grow steadily throughout
each year or whether there is
one season of the year during
which the level of sign ups will
be much higher. This only
affects the monthly P&L and
Cash Flow forecasts, every
other output remains the
same.
The monthly forecasts
assume a gradual growth of
sales each year. If you choose
Yes for this question, this
growth will be adjusted so
that an extra 10% of sales
arise in two seasonal months
and all other months are
correspondingly reduced.
14. If Yes which season has
the most sign ups?: If you
click Yes to question 13, this
field allows you to choose
which season your business
will have higher sales.
There is a drop down list with
four seasons which allocate
higher sales as follows:
• Spring – March and
April
• Summer – July and
August
• Autumn – September
and October
• Christmas –
November and
December
15: Will you offer a free
trial?: This field allows you to
set the number of days for
any free trial period you have
for your software. You can
choose to leave this field
blank.

Currently most B2B SaaS
companies offer a free trial
period to new sign ups. Most
often this is 7, 14 or 30 days.
The model allows you to set
any number of days up to a
maximum of 31. The main
effect of this is to postpone
earning revenue from paying
customers by one month if
you choose 30 or 31 days.
Direct costs
Direct costs are also known
as cost of goods sold. The
regular definition is “The
inventory cost of goods sold
by a business during any
given period.” In a SaaS
company this would usually
by zero since there is no
inventory. Accounting
convention is to include a
number of costs which are
directly related to delivering
the software service to you
customers. These are
explained in more detail
below.
There is a default option to
simplify the process and also
a couple of different options
for user inputs.
With the exception of the
Money User Inputs sub table,
the model assumes that that if
your business is registered for
VAT (that is if you answered
Yes to question A:11) then
direct costs are subject to
VAT.
For example, if you use a
direct cost percentage of 50%
SaaS Business Plan Model
and the total revenues for the
month in the Cash Flow
forecast (that is including VAT)
are £100 then the direct costs
for the month including VAT
will be £50 and this will be the
amount deducted in the Cash
Flow forecast. Using the
current rate of UK VAT, the
amount deducted in the P&L
Account forecast will be
reduced and will be £50 x
(100%/120%) = £41.67. The
difference of £8.33 will be
deducted in calculating the
VAT payment or refund in the
Cash Flow forecast.
16. Would you like to use
defaults for direct costs?:
This field allows you to
choose whether to use a
default level of direct costs. If
you choose Yes for this
option, the model will apply a
percentage for direct costs.
This percentage is low in the
early years and rises as your
business matures. The default
percentage is based on
publicly available analysis of
direct costs at quoted SaaS
companies. Most of these
companies are listed in the
US.
If you choose Yes, the Model
Assumptions section of the
table will be filled in
automatically.
The model also assumes that
if your business is registered
for VAT (that is if you
answered Yes to question
A:11) then direct costs are
subject to VAT.
19
If you choose No for this
option you will have two
choices for setting the level of
direct costs as explained in 17
below.
17. If No would you like to
use a percentage or
estimate the money costs?:
If you click No for question 16,
this field allows you to choose
whether to set your own
percentage for direct costs or
to make an estimate of the
money costs.
If you choose Percentage then
you need to complete the
Percentage User Inputs
section of the table to the
right of the Model
Assumptions section. You
must enter a percentage in
each field otherwise the
model will show zero direct
costs.
The model for Percentage
also assumes that if your
business is registered for VAT
(that is if you answered Yes to
question A:11) then direct
costs are subject to VAT.
If you choose Money then you
need to complete the Money
User Inputs section of the
table which is underneath the
Model Assumptions section.
In this case, the Model
Assumptions section will
show 0% and the model will
calculate based on your
entries into the User Inputs
section.
The Money User Inputs option
allows you to estimate the

most common elements of
Direct Costs associated with a
SaaS business. If you choose
this option, you will be setting
an estimated cost per month
for these elements in each
year of the forecast. To help
you, we have described each
of these elements below.
This is also the first table
which allows you to choose
whether a specific category of
expenditure is subject to VAT.
To the Left of each category in
the sub table you will see a V.
This indicates that the
category of expense is subject
to VAT. If you believe a
category of expense is not
subject to VAT, simply delete
the V and the model will
automatically exclude it from
the VAT calculation.
The various categories of
direct costs for which you can
choose to set a money value
are:
• Monthly Hosting
Cost – SaaS
companies operate in
the cloud and this
field is for the cost of
cloud hosting services
to support your
paying customer
base. This is likely to
be the main, perhaps
the only direct cost for
many SaaS
companies and will
tend to increase as
the paying customer
base grows. The
model allows to fix a
cost each year
SaaS Business Plan Model
20
because this increase product should be
is usually not a direct implemented easily
linear correlation with and with no support.
paying customer However, in B2B
numbers. SaaS, new customers
• Monthly may require support
communications for initial setup and
cost per paying configuration. This
customer – Some field is based on an
SaaS companies amount per new
include a paying customer as
communications cost this is a one off cost.
in the subscription • Other direct costs –
package, for example Use this field for any
for paying customers other costs that vary
to send SMS to their directly with the
customers. Include number of paying
the cost per paying customers.
customer per month
here and the model
will calculate the total.
• Other direct third
party costs eg
embedded software
– As SaaS becomes
more complex, many
products include
software from third
parties or access to
third party data. This
is usually charged per
paying customer and
the monthly amount
per paying customer
should be included
here.
• Support costs –
Many SaaS products
also require ongoing
support. This can be
call centres, field
engineers or other
direct support. This
field is based on an
amount per paying
customer per month.
• Implementation
costs – Ideally a SaaS

C: SaaS Inputs – People
People will be the biggest
cost for your SaaS business.
The costs of building, refining
and maintaining your product
will all be made up of the time
of developers. Sales,
marketing and service for your
product will either be
automated or delivered by
people.
You need to reward your
people properly and
calculating the true cost of
employing people is not
straightforward so planning
for these costs can be quite a
complex task.
As result this worksheet is the
next most complex and
important after B: SaaS Input
– Sales & Margins. Although
there are quite a lot of fields
for you to consider the
worksheet should still be fairly
simple and I have offered you
default options wherever this
is practical.
Note: Nothing is allocated in
this worksheet or anywhere
else in the model for the cost
of share options offered to
directors or employees. There
is an accounting cost
associated with such options
but there are no cash costs. It
is not normal practice in my
SaaS Business Plan Model
experience to attempt to
calculate these accounting
entries in a business plan or
forecast.
Most of the numbers in this
worksheet appear under
Directors Salaries & Expenses
or Wages & Salaries in the
P&L Account forecasts and
Cash Flow forecasts unless
outsourced.
Outsourced costs are shown
on a separate line in the P&L
Account forecasts and Cash
Flow forecasts with the
exception of any outsourced
Sales & Marketing costs.
Outsourced Sales & Marketing
costs are included in the
Sales & Marketing line of the
P&L Account forecasts and
Cash Flow forecasts.
Outsourcing
This table deals with the
option of outsourcing
business functions and
planning for the associated
costs.
1. Would you like to
outsource certain key
functions?: The first question
you have to answer is whether
you want to employ people or
to outsource to experts in
21
various fields. There are good
third party services available
to carry out most business
functions and these can be
accessed at reasonable cost
from anywhere in the world. In
the early stages, many start
ups rely on the skills of the
founders to do what they do
best and outsource the rest.
2. Outsource (column): The
fields in this column allow you
to choose whether you would
like to outsource each of the
business functions listed.
The model offers you the
option to choose outsourcing
for one or more of four
business functions: Technical,
Sales & Marketing, Customer
Service, Operations &
Administration. The definitions
of these business functions
are set out below.
If you click Yes to any of these
functions, the model will
automatically use the
outsource costs which you set
and will not allow you to
create any wage or salary
costs for these functions.
If you click Yes for all these
functions then the only other
parts of this worksheet that
you will need to complete will
be in the Directors sub table.

If you click No then you will
need to decide how many
employees you need for that
function and how much those
employees will cost you.
3. Defaults (column): Only
click Yes in this column if you
clicked Yes in any field of the
Outsource column in 2 above.
The fields in this column allow
you to choose the default
costs for outsourcing any of
the business functions in this
sub table.
The defaults in this sub table
are based on current
experience in the UK market
which includes reaching
offshore for some support. If
you are based in a different
country the default values
may not be appropriate.
For each business function,
the defaults are calculated
with a minimum monthly
charge regardless of sales.
However, once forecast
revenues rise above a certain
level the default switches to a
percentage of sales to reflect
the increasing costs incurred
as the business grows.
All figures are monthly costs.
4. User Inputs: If you click
Yes in the Outsource column
for any business functions
and click No because you do
not want to use the default
values, you will need to enter
your estimate of these costs
in each field of the User Inputs
sub table. The sub table has a
SaaS Business Plan Model
line for each business function
and a column for each year of
the forecast. If you click Yes
in any line and leave any
column in that line blank you
will record zero costs for that
business function in that year.
The Model Assumptions sub
table will show the actual
figures being used in the
forecasts whether these are
defaults or User Inputs.
5. Business Function: This
column is a list of business
functions which you can
choose to outsource. If you
do outsource a business
function you also need to
decide whether it is subject to
VAT.
To the Left of each category in
the sub table you will see a V.
This indicates that the
category of expense is subject
to VAT. If you believe a
category of expense is not
subject to VAT, simply delete
the V and the model will
automatically exclude it from
the calculation.
The business functions which
you can choose to outsource
are defined as:
Technical – All work related
to the design, development,
build, bug fixing, improvement
and maintenance of your
software products. Includes
source code, APIs, databases,
user experience, mobile apps
and all other software
elements.
22
Sales & Marketing – Activity
and work related to
generating sales leads,
closing sales and improving
market presence. Includes
market research, copy writing,
blog posts, social media work,
search engine optimization,
direct sales calls, sales
introductions and sales
pitches.
Customer Service – All work
related to supporting and
assisting paying customers
after they have purchased
their first product or service
from your business. Includes
online support, e-mail
support, call centre support
and field support.
Operations & Administration
– All other activities related to
the running of your business
including office management,
performance measurement
and reporting, staff
management, company
administration and legal and
regulatory filings. NOTE: Does
NOT include basic book
keeping services. As these are
always required they are
included in the worksheet D:
SaaS Inputs – Costs.
Directors’ Salaries &
Expenses
This table deals with
estimating all of the costs
associated with people
directly employed in your
business. This includes
founders, other executive
directors, non executive

directors and all levels of staff.
To make your planning clearer
the table includes four
sections. On the right hand
side, there are two sub tables
dealing with Directors’
Salaries and Employee Wages
& Salaries. There are default
options to help with both
these tables.
On the left hand side, there is
a Monthly Summary Table
which will allow you to see a
break down of all Wages &
Salaries costs as you build
them up. This should help you
understand the implications of
your choices.
There is a final section on the
left hand side which allows
you to allocate amounts for
various potential employee
and director benefits if you
plan to offer these. As noted
above, this does not include
share options.
6. Would you like to use
default Director Salaries?:
This field allows you to
choose the default amounts
for director salaries. These
defaults are based on current
salaries drawn by directors in
early stage companies in
Edinburgh and Glasgow. The
amounts may vary
considerably in other
countries and even within the
UK where London salaries are
much higher.
Clicking Yes will set the
salaries of founders/executive
directors and non executive
directors separately in the two
SaaS Business Plan Model
sections of the table.. The
salaries set here are basic
salaries. Payroll taxes,
benefits and bonuses are
calculated elsewhere in this
worksheet. It will also give you
an option to use defaults for
the number of Founders/
executive Directors and Non
executive directors but you do
not have to use this.
Using the default salaries will
set the same salary level for
each year of the forecast.
If you click No then you will
need to input some values for
directors salaries for each
year of the forecasts in the
User Inputs sub table on the
right hand side of the
worksheet. If you don’t enter a
value for any year then there
will be zero costs for Directors
in that year.
7. Would you like to use
default wage levels?: This
field allows you to choose the
default annual basic wage
amounts for up to 13 different
roles in your business. These
defaults are based on current
salaries in early stage
companies in Edinburgh and
Glasgow. The amounts may
vary considerably in other
countries and even within the
UK where London salaries are
much higher.
Note: The model has default
wages for employees but no
default numbers of
employees. If you plan to
employ other people you need
to include the numbers in the
table. The model will then
23
handle all the related
calculations for you.
If you click Yes the model will
use default annual wages for
13 role levels. The salaries set
here are basic salaries. Payroll
taxes, benefits and bonuses
are calculated elsewhere in
this worksheet.
If you click No then you will
need to enter an annual wage
for each role that you want to
use. If you do not enter an
annual wage for a role level
then any employees at that
role level will be calculated to
have zero costs.
8. Directors: This table shows
the amounts forecast for basic
annual salaries for Founders/
Executive Directors and
separately for Non Executive
Directors.
If you clicked Yes in answer to
question 6 above the table will
be populated with the Default
salaries in the Model Default
column. You also have the
option to use a default
number of directors. There is
no Default Yes/No button for
this option. In the Model
Default column there is a line
for Number under Founders &
Executive Director’s Salary
and another line for Number
under Non Executive
Director’s Fee. These
numbers will show the default
number for each group of
directors unless you choose
to enter a number in this line
in the User Inputs section of

the table on the right hand
side.
If you enter a value in either
Number line for any year, the
model will automatically
discard the Default number. It
will still retain the default
salary or fee. If you enter a
number for one year on either
line, you must enter a number
for every year in which you
forecast there will be directors
in that category.
If you clicked No in answer to
question 6 above you will
need to enter a salary or fee
for each year in the User
Inputs sub table on the right
hand side for each year in
which you forecast there will
be directors in either category.
You will also need to enter the
number of directors you
forecast will serve in each
category for each year. If you
leave either salary or number
blank for any year then the
model will show zero costs for
that category of director for
that year.
9. Employees: This sub table
allows you to calculate all
employee costs by entering a
combination of annual basic
wage and numbers at each
role level. The wages set here
are basic wages. Payroll
taxes, benefits and bonuses
are calculated elsewhere in
this worksheet.
The 13 role levels comprise
three different levels (Lead,
Senior and Junior) for each of
the four main business
SaaS Business Plan Model
functions defined under 5
above – Technical, Sales &
Marketing, Customer Service,
Operations & Administration –
plus a role level for interns.
You do not need to use these
exact titles and structure in
your business but it should
give you enough flexibility for
pretty much any business
plan.
You can enter a number of
employees for each level for
each year of the forecast. You
can use as many or as few
role levels as you choose and
enter any number of
employees in each year. If you
do not enter an annual wage
for a role level either by
default or by User Input then
any employees at that level
will have zero costs.
You need only set one figure
for the annual wage at each
role level. Increases in annual
wages will be dealt with in the
Base Inputs table on the left
hand side.
10. Monthly Summary Table:
This table shows the total
breakdown of monthly
Directors’ Salaries & Expenses
and monthly Wages &
Salaries. The totals in each
section will appear in the P&L
Account forecasts and Cash
Flow forecasts. All figures in
this table are calculated so
you should not need to enter
anything in the table.
11. Base Inputs: This table
captures the basis for
calculating all aspects of
24
Director and Employee costs
other than basic annual wages
and salaries.
12. Increase in wages: This
field allows you to set a
percentage annual increase in
employee wages for the
duration of the forecast. This
percentage will not be applied
to Directors’ Salaries which
are set individually for each
year.
There is no option to apply a
fixed figure for this input, only
a percentage increase. You
are free to leave this field
blank in which case basic
annual wages at each role
level will remain fixed for the
duration of the forecast.
13. Training costs: This field
allows you to set a training
cost for each Director and
Employee. You can set either
a fixed amount per annum per
person or a percentage of
base annual wage or salary.
14. Pension contribution:
This field allows you to set a
pension contribution for each
Director and Employee. You
should only use it if the
company will be paying a
pension contribution. There is
no option to set a fixed
amount, only a percentage of
base annual wage or salary.
15. Medical Insurance: This
field allows you to set the
amount of any medical
insurance contribution on
behalf of each Director and
Employee. You can set a fixed
 25

value per person or a

percentage of annual wage or
salary.

16. Other benefits: There are

three free fields to calculate
any other benefits you wish to
offer to each Director and
Employee. You may wish to
include an estimated annual
bonus for example. You can
set a fixed value per person or
a percentage of annual wage
or salary.

17. Directors’ Personal

Expenses: This field allows
you to set an amount for
personal expenses incurred
by Directors’. You can set a
fixed value per person or a
percentage of annual salary.
Expenses incurred by
employees will be picked up
under the relevant cost
categories in the worksheet D:
SaaS Inputs – Costs.

SaaS Business Plan Model


D: SaaS Inputs – Costs
You will use this worksheet to
capture all the other costs of
running your business
including the cost of
purchasing assets such as
laptops and furniture. The
worksheet is flexible and fairly
straightforward. Most fields
can be filled by default and
there is only one area (Sales &
Marketing) where you will
need to enter a figure for each
year.
There are several cost tables
in this worksheet. There is no
obligation to include cost in
any line of those tables. Your
business will undoubtedly
have some categories where
you do not expect to incur
costs.
VAT
If your business is registered
for VAT (that is you answered
Yes to question A: 11) you will
need to decide which costs
are subject to VAT. To the Left
of each category in the all
tables you will see a V. This
indicates that the category of
expense is subject to VAT. If
you believe a category of
expense is not subject to VAT,
simply delete the V and the
model will automatically
SaaS Business Plan Model
exclude it from the
calculation. If you believe a
category of expense has been
excluded which should be
included, simply type a V in
the relevant field. The model
is set up with VAT applied
according to current UK rules.
These may differ in other
countries.
If your business is not
registered for VAT (that is you
answered No to question A:
11) the model will ignore this
column.
1. Sales & Marketing: This
table is used to capture the
amount of all types of
expenditure used to market
your business or increase
sales other than direct wages
and salaries of sales
employees.
There are no defaults in this
table. You need to decide
how much you are able to
spend to drive the growth of
your business. However, if
you have completed
worksheets A-C there are a
couple of lines which will
already be filled in. These are
Sign up advertising and
Outsource costs. There is no
need to add any other amount
26
if these capture everything
you plan to spend.
If you do want to add spend in
any other category, you need
to enter an amount for each
year of the forecast in the
relevant field of the table.
The categories of spend set
out in this table are:
Sign up advertising - Direct
advertising using search
engines (eg Google Adwords)
or social media (eg Facebook,
Twitter, LinkedIn). The values
in this category are set in
worksheet B: SaaS Inputs –
Sales & Margins.
SEO Consultancy - Third
party advice and expertise to
improve search engine and
social media rankings.
Other Advertising -
Traditional advertising
including print, radio, TV and
sponsorship.
Community Management -
Third party advice and
support to manage online
communities.
Public Relations (PR) - Third
party advice and support to

achieve public recognition in
press and other publicity.
Events & Networking -
Attendance and participation
in conferences, exhibitions
and other promotional events.
Outsource costs - Cost
associated with outsourcing
sales & marketing to a third
party. The values in this field
will be set in worksheet C:
SaaS Inputs – People if you
choose to outsource this
business function.
Other – Include any additional
sales & marketing costs you
wish to plan for here.
Other costs
2. Would you like to use cost
defaults?: This field allows
you to choose if you would
like to use the default options
for all common remaining cost
categories. There is a further
option called 1by1 which
allows you to opt for the
default or not in each relevant
line of the table. The default
costs are based on current
UK experience and may not
be relevant in other countries.
If you click Yes the model will
calculate costs based on
either an amount per
employee or a flat amount.
The model includes default
costs for all the common
categories of cost used by a
SaaS business. You can easily
tell which categories are
regarded as common
SaaS Business Plan Model
because the relevant lines are
coloured Grey.
No default costs are included
for some other categories of
cost which are not generally
included in business plans, for
example Consulting. The lines
for these categories are
coloured Light Brown.
If you do plan to spend money
in these categories, simply
input the amount in the
column for your first year of
trading and the model will
calculate for each subsequent
year using the Inflation Rate
set in A: 14.
If you click 1by1 you will need
to select Yes or No where
applicable to tell the model
whether you want to use the
default cost for each line. You
will need to enter a cost
amount for the first year of
trading in any case where you
have clicked No and you
expect to incur costs. The
model will calculate for each
subsequent year using the
Inflation Rate set in A: 14.
The 1by1 option gives you the
choice to vary just a few cost
lines or to exclude a cost line
if you do not expect to incur
any costs in that category. For
example, the model includes
Rent but you may have
access to a rent free option
such as a start up incubator
so select 1by1, opt for No in
the rent line and leave the
field blank.
27
3. Per Employee Costs: The
cost categories in this table
will vary according to the
number of founders/
executive directors and full
time employees you have
forecast. For each cost
category, this worksheet will
show an amount per head per
month.
If you clicked Yes in 2 above,
the Model Assumptions sub
table on the left hand side will
show the default amounts per
head per month.
If you clicked 1by1 in 2 above,
you will have the choice of the
default option in each cost
line using the left hand
column of the table.
If you clicked No in 2 above,
you will need to include an
estimated amount of cost per
head per month for any
category of cost in which you
expect to spend money in the
User Inputs sub table on the
right hand side. Any field you
leave blank will result in zero
costs for that category. This
may be right for some
categories of cost.
The categories of cost in this
table are:
Entertainment - 100%
business - Expenses incurred
on entertainment by the
business that for income tax
purposes are fully deductible.
Mobile Phones - Cost of
mobile phones used by
directors and employees.
Includes voice & data.

Rent - Payments made to
lease a building or area such
as a desk or work station.
Travel – National - Expenses
incurred from any domestic
business travel.
Travel – International -
Expenses incurred from any
international business travel.
Capital
This section deals with per
employee expenditure which
will be classified as fixed
assets and depreciated over 3
years rather than charged
directly to the P&L Account
forecast.
IT and Communications
Equipment - Purchase of
hardware such as PCs,
Tablets, printers and other IT
goods.
4. General Overheads – This
table lists all categories of
costs which are included in
Overheads in the P&L
Account forecasts and Cash
Flow forecasts.
The table includes those
categories of cost which are
set by the Per Employee
Costs table in 3 above. These
are calculated by the model
so cannot be altered in this
table. The relevant lines are
coloured Light Blue in the
table.
SaaS Business Plan Model
The table shows forecast
costs for all five years of the
forecasts. However, only
those in the column for year 1
are set by the defaults or the
User Inputs. All other are
calculated using the inflation
rate set in A:14.
If you clicked Yes in 2 above
the table will include a default
amount for every category of
cost for which a default has
been set in the Model
Assumptions sub table on the
left hand side. You will still be
free to enter costs in those
categories for which no
default has been set but these
amounts should be entered in
the User Inputs sub table on
the right hand side.
If you clicked 1by1 in 2 above
the table will not automatically
include defaults but you can
click Yes for any line that you
would like to use the default
costs in the Defaults column
on the left of the table. You
will still be free to enter costs
in those categories for which
no default has been set or
where you have not chosen to
use the default but these
amounts should be entered in
the User Inputs sub table on
the right hand side. Any field
left blank will result in zero
costs being allocated to that
category in your forecasts.
If you clicked No in 2 above
you will need to enter a value
in the User Inputs sub table
on the right hand side for any
category in which you expect
to incur costs. Any field left
28
blank will result in zero costs
being allocated to that
category in your forecasts.
The categories of cost
included in this table are:
Audit & Accountancy fees -
Expenses incurred relating to
accounting and audit fees.
Bank Fees - Fees charged by
your bank for transactions
regarding your bank
account(s).
Cleaning - Expenses incurred
for cleaning business
property.
Consulting - Payments made
to external consultants.
Charitable and Political
Donations - Payments made
to charities or political
organisations or events.
Entertainment - 100%
business - Expenses incurred
on entertainment by the
business that for income tax
purposes are fully deductible.
Entertainment – 0% -
Expenses incurred on
entertainment by the business
that for income tax purposes
are not fully deductible.
Postage, Freight & Courier -
Expenses incurred by the
entity on postage, freight &
courier costs.
General Expenses -
Expenses incurred that relate

to the general running of the
business.
Insurance - Expenses
incurred for insuring the
business' assets.
Internet connection - Cost of
fixed line connection to
premises including voice and
data. Cost of mobiles is
included under Mobiles and
cost of call centre etc is
included with Sales &
marketing.
Legal Expenses - Expenses
incurred on any legal matters.
Light, Power, Heating -
Expenses incurred for lighting,
power or heating the business
premises.
Mobile Phones - Cost of
mobile phones used by
directors and employees.
Includes voice & data.
Motor Vehicle Expenses -
Expenses incurred on the
running of business motor
vehicles.
Operating Lease Payments -
Expenses incurred on
operating expenses such as
office rental and vehicle
leases (excludes hire
purchase agreements).
Printing & Stationery -
Expenses incurred on printing
and stationery.
Software - Expenses incurred
on software or computer
consumables. Includes SaaS
SaaS Business Plan Model
services purchased eg e-mail
or analytics.
Rent - Payments made to
lease a building or area such
as a desk or work station.
Repairs & Maintenance -
Expenses incurred on a
damaged or run down asset
that will bring the asset back
to its original condition.
Subscriptions - Expenses
incurred by the business in
relation to subscriptions, such
as magazines and
professional bodies. SaaS
Subscriptions should be
included under software.
Travel – National - Expenses
incurred from any domestic
business travel.
Travel – International -
Expenses incurred from any
international business travel.
There are also five lines for
other expenses should you
choose to include categories
that are not in the standard
table.
5. Capital: This section deals
with expenditure which will be
classified as fixed assets and
depreciated over 3 years
rather than charged directly to
the P&L Account forecast.
The line for IT and
Communications Equipment
will be filled automatically
from the Per Employee Costs
table in 3 above. This is the
only default option. The other
29
lines in this table can only be
completed by user inputs. Any
other assets which you intend
to purchase should be
entered directly into this table
( there is no separate User
Inputs sub table) in the year in
which you plan to purchase
them.
All assets will be depreciated
straight line over a standard 3
year period. This model is not
designed to cope with asset
based businesses, for
example purchase of
property.
The categories of capital
expenditure in the table are:
IT and Communications
Equipment - Purchase of
hardware such as PCs,
Tablets, printers and other IT
goods.
Furniture & Fittings -
Purchase of office furniture,
office equipment and other
fixtures and fittings.
Other Assets - Purchase of
any other goods which will be
used by the business for more
than one year.
 30

E: SaaS Inputs – Set up costs

This is a very simple
worksheet with no defaults or
options. You may incur some
business related costs before
your business starts
operations, for example
paying for this business
model! Any costs incurred
prior to the date set in A: 3
First month of operation
should be entered into this
worksheet.
All costs entered into this
worksheet will be charged as
a one off in the first month of
the P&L Account forecasts
and Cash Flow forecasts.
These may differ in other
countries.
If your business is not
registered for VAT (that is you
answered No to question A:
11) the model will ignore this
column.
All categories of cost included
in this worksheet are subject
to the same definitions set out
in the notes for worksheet D:
SaaS Inputs – Costs.

If your business is registered

for VAT (that is you answered
Yes to question A: 11) you will
need to decide which costs
are subject to VAT. To the Left
of each category in the all
tables you will see a V. This
indicates that the category of
expense is subject to VAT. If
you believe a category of
expense is not subject to VAT,
simply delete the V and the
model will automatically
exclude it from the
calculation. If you believe a
category of expense has been
excluded which should be
included, simply type a V in
the relevant field. The model
is set up with VAT applied
according to current UK rules.

SaaS Business Plan Model

 31

If you have any questions about this guide or the SaaS

Business Plan Model, please get in touch
kenny@sunstonecommunication.com

To find out about mobile for entrepreneurs, mobile for

enterprise and mobile for good visit our website at
http://www.sunstonecommunication.com

©Copyright Sunstone Communication Limited, All rights reserved

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SaaS Business Plan Model