Key Valuation Factors
These are the primary metrics that buyers and investors consider when valuing a Micro-SaaS business.
Annual Recurring Revenue (ARR)
The foundation of SaaS valuation. Higher ARR typically means higher valuation.
Growth Rate
Year-over-year growth significantly impacts multiples. 50%+ growth can add 1-2x to your multiple.
Profit Margins
Higher margins indicate efficiency. 70%+ margins are excellent for Micro-SaaS.
Customer Churn
Monthly churn under 5% is good, under 3% is excellent. High churn drastically reduces value.
Customer Concentration
No single customer should represent more than 20% of revenue. Diversification increases value.
Tech Stack & Code Quality
Modern, well-documented code with automated deployments adds value.
Quick Valuation Calculator
Get an instant estimate based on your key metrics. This is a starting point - actual valuations depend on many factors.
Typical Revenue Multiples
Industry benchmarks for Micro-SaaS valuations based on revenue size and characteristics.
| Revenue Range | Typical Multiple | Characteristics |
|---|---|---|
| Under $10K ARR | 1.5x - 2.5x | Early stage, unproven |
| $10K - $50K ARR | 2.0x - 3.5x | Product-market fit found |
| $50K - $200K ARR | 3.0x - 4.5x | Established, growing |
| $200K - $500K ARR | 3.5x - 5.5x | Mature, profitable |
| $500K+ ARR | 4.0x - 7.0x | Market leader potential |
How to Increase Your Valuation
Strategic improvements that can significantly boost your business value before selling.
Reduce Churn
Reducing monthly churn from 5% to 3% can increase your multiple by 0.5-1.0x.
- Improve onboarding experience
- Add annual pricing with discounts
- Proactive customer success outreach
Accelerate Growth
Demonstrating consistent 50%+ growth can add 1-2x to your multiple.
- Optimize pricing and packaging
- Expand into adjacent markets
- Build channel partnerships
Document Everything
Well-documented operations reduce buyer risk and increase value.
- Create SOPs for all processes
- Document code and architecture
- Track all key metrics historically
Diversify Revenue
No customer should represent more than 20% of revenue. Diversification reduces risk.
- Focus on smaller customers
- Add self-service options
- Expand geographically
When to Get a Professional Valuation
You Should Consider It When:
- Your ARR exceeds $200K
- You have complex revenue streams
- Multiple buyers are interested
- You want negotiation leverage
What You'll Get:
- Detailed financial analysis
- Market comparable analysis
- Strategic value assessment
- Defensible valuation range