How to buy a SaaS business

A SaaS listing shows you MRR, churn and a multiple. None of those three numbers means anything on its own.

MRR without a cohort breakdown hides whether growth is new customers or one enterprise contract that renews in March. Churn quoted monthly hides annual contracts about to lapse. A multiple quoted against profit hides whether the seller's "profit" excludes their own salary, the contractor who actually ships the code, or the ad spend that produced the growth.

Ask for the payment-processor export, not a summary. Ask what the largest single customer represents as a share of revenue — concentration above roughly a fifth changes what you are buying from a business into a relationship. Ask how many hours a week the owner works and what specifically happens to those hours after closing.

And ask the awkward one: why now. There is usually a real answer, and a seller who gives it plainly is worth more than one who doesn't.