Do Your Growth Rate and Profit Margin Add Up To 40%?
[Excerpt from FA Magazine article]
In the SaaS (software as a service) business world, there’s something called The Rule of 40%. It says that to run a healthy business, your year-over-year (YOY) monthly growth rate plus your profit margin should add up to 40%. Turns out that the 40% rule applies very well to our industry too. But we arrive at 40% in a different way.