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Reduce Cash Flow & Working Capital Issues Without Pissing Off Your Sales Team!
June 26th, Thursday
11 AM PT / 2 PM ET
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SaaS businesses are always in the news for massive fundraising rounds and innovative product developments. However, beneath the surface, keeping SaaS businesses afloat isn’t always a smooth sail. And if you’re into B2B or enterprise SaaS, you’re sailing against the high winds all the time.
SaaS businesses are booming, thanks to their flexible payment models that attract deals but result in smaller, steadier revenue streams. This often puts a strain on this industry as they wait for revenue to build up. Recurring Revenue Financing (RRF) offers a pivotal solution in this scenario.
Scaling a SaaS company calls for a fresh approach to financing. Traditional debt and equity financing might not be your best option. Debt financing often misaligns with the asset-light and rapid-growth nature of SaaS, and equity financing can dilute control. Recurring Revenue Financing (RRF) offers a flexible, founder-friendly alternative tailor-made for the SaaS business model.
Are you tired of chasing delayed payments and worrying about your company's cash flow? If so, you're not alone. 55% of all B2B invoiced sales are overdue in the United States at the moment, while an average 9% of all credit-based B2B sales are affected by bad debts. These figures highlight the urgent need for businesses to reconsider their approach to payments. Late B2B payments and increasing debt severely impact a company's financial health, jeopardizing its existence.
Research shows that SaaS companies could boost their profits by 11% by increasing their prices only by a humble 1%. Yet, SaaS businesses often overlook effective pricing, with most companies investing just 6 hours in developing their pricing models. This will have to change.
McKinsey predicts a whopping 3000% growth in subscription e-commerce by 2025. However, as businesses offer subscription-based payments, it can lead to cash flow challenges. In response to this growing demand, vendors seek solutions that allow payment flexibility without disrupting their sales processes, all while maintaining a steady cash flow.
The Robotics-as-a-Service (RaaS) model is set to reach a $4 billion market cap by 2028, attracting businesses seeking enhanced productivity and efficiency through robotic automation. As RaaS gains traction, robotics companies encounter two main challenges: identifying a suitable subscription model and arranging working capital with flexible, subscription-based payment plans to their customers.
The global revenue-based financing market size is projected to reach over $42MM by 2027. And why not? Recurring Revenue Financing (RRF) is, after all, a compelling alternative for businesses looking to secure quick growth capital without the drawbacks of traditional financing.
SaaS companies facing high burn rates and limited working capital should aim to target a 12- to 18-month runway to effectively manage their accelerated cash consumption. To maintain financial stability, businesses often turn to traditional funding options such as venture capital or loans, which can be fiercely competitive and come with strings attached.
As e-commerce flourishes, B2B Buy Now, Pay Later (BNPL) isn't just trending; it's transforming how major merchants operate. A 2022 McKinsey report noted that a solid 65% of B2B companies are now all-in on online sales. Taking cues from the B2C world, the surge in B2B BNPL services is evident.
