Why My Bootstrapped Company Ranks At the Top of Every Financial Metric in the SaaS Industry

um really super excited to be here I am a bootstrap company doing 32 million this year and I've taken no debt no equity and uh what I did is I put this presentation together oh I guess I got to switch it here my name is Mark Douglas LCB tracker um but we are performing at really excellent high levels uh what most firms would be rated at I'm going to go

through a little bit of that with you um I'm going to talk about the rule of 40 the lifetime value of a customer AR growth and then I'm going to tell you how I've done it over the years so I've got three slides that I left uh that are marked you'll see in red that I think are your big takeaways and really what I'm trying to do is just give you my secret sauce and how I did it without taking debt without um without any

Equity uh uh delution so um I'm really uh excited to show this to you and and talk to you about my company and and how we've done these things so um just a little bit about Els stre tracker our our vision is to empower people to build better communities so what does that mean well we are a labor compliance uh Workforce reporting tool that construction companies use all across the country to make sure their workers are being paid right that the right work

workers are being hired local workers are getting hired and at the same time they're building their communities so it's a it's a win-win we we love our mission because we're helping people actually get a better life while they're building a better community and we've also internalized that as well to do that for our own employees and I think it all ties together and that's part of the secret sauce um what we do is we we're just providing the best software we can for them to comply with their

rules and regulations a gencies and primes and contractors so that they can help their people you know have a better life so um what does that look like for us as a company though and and how did we how are we performing and and I was really actually super happy I I did this presentation because I actually learned a little bit more about my company and like oh why why do I do these things and it kind of all came together in my head um actually doing this

presentation so I how many are you one to five million sass over 5 million over 10 okay so yeah so you many of you probably know the rule of 40 is your growth rate plus your eida and hopefully it equals 40 or somewhere between 30 and 50 right so if if you're at 40 you're doing really really well right so but let's break it down a

little bit because I think it makes sense to do this for for my presentation to you so if you you look at the the first bar here do I have a is it a oh yeah so this bar right here we're at like 90% grr so grr is you know where was I at 12 months ago with these 1,000 contracts where am I at today with those 1,000 contracts right that's annual so

we're at 90% typically it's a little deceiving in our company because we have contractors who have projects that end and start so a joint venture might start up with us and they it's a three-year construction project and then that contract ends but then they sign up another contract so I actually believe our our gr is more like 95% but the way we calculate it's 89 but the big deal here okay is our nrr

is 117% so if I had a th000 contracts the a year later I have 900 and I'm you'd think I'd only be at 90% of the revenue but those 90 contracts are still producing 117% of the revenue I was 12 months ago so that's through and I'll I'll show you how that works out so over the course of um and then you got to add the AR in

right but the nrr is everything but new sales right so our nrr is going up because we have budget expansion our clients are buying more volume from us or there's a price increase or there's an add-on product to that same customer right and then when we add in the ARR growth of our new customers we we went from 768 to 895 over the past 12 months we added another 2.6 million in Revenue so

overall that gives us about a 28 over the last 12 months a 28% growth and I'm going over this a little bit detail because it really fits the storyline so when you look at our rule of 40 over the past six years couple years we've been under couple years we've been over but we've really averaged the rule of 40 for since 2018 and so it's it's been a fantastic run it's really starting it really puts a lot of cash into our bank if you start

managing eida what I did is I said look I'm going to manage my profit margin right around 10% everything else goes into growth so we've been investing consistently we've had some ups and downs based on you know some Market things but we are now at a point at 30 million where I can really start accelerating my my profit because I feel like I can scale at the same Pace with this infrastructure and the people and the scaling and I'll get

into a little bit about that about as you get big enough you can actually start to increase your profit again this is a non-investment non-debt model of a business business right so this is how I did it and I'm just trying to give you ideas like you can probably do a lot of things I did and take a lot less Equity or a lot less debt you may need some may I didn't need any I was able to decide I was going to do it this over the long term I've been in business 20 years took

me 10 to get to 10 million and or a little bit more than 10 to get to 10 million but then the last you can see the last six years have been just fantastic for me so um I'm trying to give you an idea how I'm going to how I did that so this is a huge slide number one there there's a red this this is one of the key takeaways you got to maintain your existing customers at all cost that is

where your your growth and your profitability can just stay sustained right we have I've been in business a little over 20 years our average customer is 12 and that's only because I think is going to be a lot longer than that as we grow because Mo we have a very low churn rate as far as our customers right um and then you can see the the uh the nrr and the grr they're embedded in but that focus on keeping every customer at all cost was a huge thing that I think we did very

successfully or or or do so let me jump into this of the things that we did as a company uh designed around these these metrics and and what happened uh and and why we're so good at I believe what we do without having to have taken the cash so we're going to go into some goal setting key objectives and results and in a repeatable process so we have really kind of a four-step process that we do um May

between May and June we get together at the board and the the the SE Suite we decide what are our top three priorities that's it three for the year next year and we set those out and then we we have the SE Suite go in or your key management go in and do um a kind of a bottomup approach okay if these are your three top priorities how am I going to support those and then we have a budgeting process in August September

where they actually come back with their plans and they give me three uh three objectives or three key results for their Department to support our top three priorities and then they drive that all the way down through the organization are any of you uh using Viva goals from Microsoft it's a super great tool we just implemented a year and a half ago and I was using kind of all my own forms but Viva goals can

integrate with almost all your platforms it is a super easy to use tool to get every person in your organization on an objective key result that all roll up to the key objectives of the organization used to do this with a lot of manual effort Powerpoints and spreadsheets and all this now it's all integrated into one environment in Microsoft via goals I and there's a book on it um you can get that book I forget forget the name of it but just look it up Microsoft Eva Golds

highly recommend something like that as a tool uh that would actually give you the ability to have your whole organization lined up and the reason that works so well I'll get into that in a second is we do these daily and weekly scorecards and then monthly reviews so Viva goals gives us a chance to on a day-to-day basis my management team can look at a support rep or the support center I got about 30 support people that do phone calls and we can tell how

many people are left on hold and for how long so we have a goal that nobody's left on hold for more than five minutes it's got to be less than five minutes so that's get that gets monitored so all these things become supporting objectives to the the key things we want to do well in order to have um uh scalable operations we need to make sure we can support the customers that are calling right so a key objective or key result would be calls under five minutes if I can't do calls under five minutes I better hire more support people right so

it all lines up to what you're trying to do and then final thing that we do which is super powerful and again this is slide number two remember this is these monthly reviews I put everybody in the same teams call video all management reports this to all other managers monthly and boy nobody wants to not be missing their Mark and if they are it's usually there's a good reason so then the organization can get behind them hey

you know we're not we're not hitting the the leads that we thought we were hidden so what's the problem okay well maybe maybe we not not enough spend in a certain area or whatever it is so this is such an excellent tool a monthly review with all management in front of everybody else huge very seldom do we get a report where're they're not on target or at least close um and this is like this is one of the uh one of the samples of of that

monthly review we can track it daily weekly monthly um and then this the third the third and last thing we do on that monthly review is my CFO will meet with the department manager or the SE Suite person and they'll go over their budget and their forecast their hiring goals everything monthly because then you can see if we're having a pattern of something you're not meeting your goal well why well I didn't get the person hired I didn't so then we can get behind

that get HR on it make make sure we're moving to uh um bring that back up above the goal that they had and then it all lines up so nicely um and then the third and final section is some of the other things that you have to do in order to make this happen backup house systems and then I'll talk about value and annual cycle so we took a really strong

approach that we needed data and we need to measure so we have invested a lot in our automation of data across the organization so organizational systems your Salesforce we got net Suite integrated with Salesforce our e-commerce data is integrated with net Suite so everything moves and flows and we can get data this is an example of my implementation Department right so up here we can see how many implementations what size they are what's the length of

them are there any in critical so we if we're getting way behind look we're normal them maybe we don't have enough implementation people or two people were on vacation one person got sick okay all right that problem will solve itself but maybe it won't so this is why you have to have this this scalable data integration operation systems I I I highly invested in that and um I think that's a super important area for you to

consider um now let me talk about staff so you've probably heard a lot about the right hiring and all that and I absolutely believe that and I talk about empowering people to build better communities well you got to do that with your own internal staff and and one of the things that we've really focus on is this thing here you got to find the skill sets and the gifts that that that staff is empowering you know God gives each of us

our own skilled set of gifts right and those gifts are what you love to do so you got to you got to make sure you place your people with those skill sets where they're best at and supplement them when they're not so good at something right but you put people and they're working on the things that they love to work on oh my gosh they're just the greatest employees ever and they don't want to leave right and then you make sure to promote with from men you give them the good pay you take care of them you have the culture you do all

that stuff now you have a really caring organization who will care for your customers right and um as just as an example the retention rate in the SAS industry is about 14% turnover annually we're anywhere from 3 to 7% annually and we really focus on that cultural development internally I mean we we just totally believe in having a family you

know really loving and caring U for each other um and then the third thing third slide I think goes back to my first slide keep customers at all cost and the way you have to do that is you have to have this caring staff who loves what they do who will care for that customer the same way and if you create that environment you'll have that

uh 95% grr you'll have that 12year customer and we really have built these long-term relationships but it really has to come down to this you truly must care so you got to get the caring employees that are going to care for them and then you're going to win you're going to win big and you can just do it on a sustained level and you just keep going you you you plan it financially right you expect the growth you get the growth it it all happens

so I think and then this is just one more I wanted to throw this in because I talked about those monthly Milestones so this was our old form we're now using the Microsoft Eva Golds but this is what we' have people report on that monthly meeting all the direct managers would come in and go oh okay yeah we're we got yellow here we're green on these things this was their annual deliverable schedule that they come to the meeting with monthly and they have to be on schedule or they better have a solution

as to why they're not so I just thought that was an important way to kind of end it just to make make sure you understood the the that accountability part of it is so crucial to the success so I thank you all very much for the time I I hope I gave you a little bit of feed a little bit of things to think about all right thank you