A sensible price attracts serious buyers and gets you a fair sale. These are the usual ways to value a SaaS business.
Valuation methods
- A revenue multiple is the most common: annual recurring revenue (ARR) times a multiple that depends on growth, churn and niche.
- A profit multiple uses net annual profit instead.
- A user-based valuation multiplies paying users by a value per user, which mostly depends on average revenue per user (ARPU).
None of these multiples is fixed. The best guide is what comparable businesses actually sold for.
Factors that affect valuation
These push the value up:
- High revenue retention
- Low monthly churn
- Strong month-on-month growth
- A spread of customers, with no single one bringing in a big share of revenue
- A clean codebase with documentation
- High gross margin
- A niche that's hard for competitors to enter
These pull it down:
- High churn
- Declining revenue
- Single-customer dependency
- Technical debt
- High maintenance costs
- Legal risks or open disputes
SaaS valuation worksheet
| Metric | Your SaaS | Where buyers check it |
|---|---|---|
| Monthly revenue | $____ | Billing dashboard |
| Annual revenue (ARR) | $____ | 12 months of billing exports |
| Monthly churn | ___% | Cancellations / customers at month start |
| Growth rate | ___% MoM | Month-on-month revenue change |
| Gross margin | ___% | Revenue minus hosting, support and tool costs |
To turn these into a price, compare them with recent sales of similar businesses. Stable, growing and declining businesses sell at very different multiples.
Preparing your SaaS for sale
- Clean up the financials: 12 months of clear revenue data.
- Document everything: tech stack, processes and customer data.
- Reduce dependencies. If you're the only developer, that's a risk.
- Cut churn and improve retention before selling.
- Get a valuation, from the worksheet above or a professional.
Writing the listing
When you list your SaaS:
- Be open about revenue and expenses
- Show growth trends, including declines
- Include screenshots of analytics and revenue dashboards
- Say what's included (code, domain, users, data)
- Set a realistic price based on the valuation
- Explain why you're selling, because buyers will ask
Escrow holds the buyer's money while they check the code, accounts and data, which makes a deal between strangers easier.
How the fees work on a sample sale
With EPICSWP's current fees, a $20,000 sale works like this:
- The buyer pays $21,200: the price plus the 6% escrow fee.
- The seller receives $20,000 in their EPICSWP wallet.
- Withdrawing all of it leaves $19,400 after the 3% withdrawal fee.
#saas-licenses#valuation#selling
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