A SaaS company's magic number measures the efficiency of the company's sales. It shows how much it costs your company to grow dividing revenue growth by the cost of expenses to drive that growth. The magic number calculator is often used to evaluate the growth of a business. It looks at revenue and cost of acquisition only and ignores other important financials such as gross margins. But at the same time, it is a useful and simple financial metric. If your company's Magic Number is very low, for example, < 0.5, you need to make changes to your go-to-market model. The magic number ratio between zero and 0.5 normally shows that a company is growing very inefficiently, and there's no sustainable growth model in place. A magic number between 0.5 to 1 is an acceptable figure. It states that the company can drive new recurring revenue acquisition with affordable investment. Over 1 is the ideal Magic number figure. It means that the business has a capital-efficient growth model.
Magic Number Calculator
Easily assess the efficiency of your sales strategy
Identify if you need to implement changes in your selling model
Evaluate the growth of a business
Open the opportunities for faster growth
