There is no doubt that COVID-19 has changed the financial and SaaS landscape.
While there is no one-size-fits-all approach, there are definitely certain winning playbooks that SaaS businesses can learn from.
Here is where there is a difference.
In a pandemic-triggered recession, the definition of discretionary spending would change.
There is also a way to bring down non-discretionary spends.
At Chargebee we identified big-budget annual payments and renegotiated contract terms to match our inflows.
At a functional level, gather yourRevenue Operations Practitionersand eliminate tools that are redundant.
Bloomberghas also predicted other types of recovery we could be seeing in the coming quarters.
Whether its a V-shaped curve or a Nike-Swoosh, these predictions call for alterations to your pre-pandemic plans.
Here is where scenario planning comes into place.
It should be performed after segregation the costs to help refocus the budget.
Ask yourself,
What are the possible revenue goals I can achieve in these different scenarios?
Here discretionary spending is not taken into account.
It is advisable to not commit to this spend until things get back to normal.
But what happens to plans made in an uncertain world?
Based on this, triggers and action items that need to be set in place.
What is the runway you need in December of 2020?
When any crisis starts it is unlikely that the whole world shuts down.
There are activities that keep the economy running even at a low pace of growth.
This helps you take calculated decisions based on your spending patterns.
Step 5# Reforecasting to success
The final and most crucial step is reforecasting.
It helps one stick to the plans.
It also helps identify opportunities for growth and helps invest any excess funds in them.
When you reforecast, you map the actuals to the scenarios.
Which scenarios are you falling into?
If you did really well, you have more funds to allocate elsewhere.
Speed of the companys decision making becomes crucial and reforecasting on a quarterly basis helps do this.
How can a business plan its cash runway for the upcoming quarters?
Any company in the midst of this crisis should have a 24-month runway available for them.
venture debt funding, angel investors, grants, etc.).
What are some pitfalls to look out for?
In the current scenario, there are two areas that need more focus.
Macro factors cant be predicted.
However, some truths are inevitable and unfathomable.
So youre interested in growing a business?
At Chargebee, he is responsible for financial operations, strategic business planning, reporting, and consolidation.
