How much does it cost to build a SaaS product?

An MVP SaaS costs $30,000-80,000 and takes 3-4 months to build. A production-ready v1 with billing, onboarding, and core features costs $80,000-200,000. Ongoing development and maintenance adds $5,000-20,000/month. The most significant costs are not building the product but acquiring and retaining customers, which typically exceeds development costs within 12-18 months.

SaaS - Glossary | Verbsz Technologies

SaaS

Software as a Service. Cloud-hosted software delivered to users via subscription over the internet.

SaaS revenue is recurring and predictable, making it the most attractive business model for investors (5-15x ARR valuations).
The Rule of 40 benchmarks SaaS health: growth rate + profit margin should exceed 40%.
Successful SaaS requires product-led growth (free trials, freemium) combined with sales-assisted conversion for enterprise.

Essential SaaS Metrics

SaaS businesses live and die by their metrics. The key indicators to track:

MRR/ARR: Monthly/Annual Recurring Revenue. The foundation metric for all SaaS businesses.
Churn Rate: Percentage of customers lost per month. Healthy SaaS churn is under 2% monthly.
CAC (Customer Acquisition Cost): Total sales/marketing spend per new customer. Should recover in 12-18 months.
LTV (Lifetime Value): Total revenue from a customer over their lifetime. LTV/CAC ratio should exceed 3:1.
Net Revenue Retention: Revenue from existing customers including expansion and churn. Above 110% means growth without new customers.

Frequently Asked Questions

Related Services

Custom Software Development Web & Mobile Development

Related Terms

MRR

Monthly Recurring Revenue. The predictable revenue a subscription business earns each month.

MVP

Minimum Viable Product. The simplest version of a product that delivers value and validates the core hypothesis.

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