4 ms·

Depends on where you are located. If its a US Based company, obviously not enough revenue to sustain 7 employees. The company is based in Belarus where salarie

• beberlei 8y ago
  obviously? Not every employee must be a high paid engineer. And there are certainly non SV based engineers that are totally fine with less than 100k $ per year? Being based in Germany, I calculate around 100k€ revenue per employee myself, maybe a bit more.
  • debacle 8y ago
    It's likely that at least two of the people at this SaaS have put in an average of 60+ hours a week from its inception.
  • PacifyFish 8y ago
    1mm is their revenue. It will be reduced by cost of goods sold, rent/electricity, taxes, payment for services like AWS, etc. before employees are paid.
    • charlesdm 8y ago
      Margins in software businesses are high. All those things combined (especially in Belarus) aren't going to run higher than say 20% of revenue.
      • PacifyFish 8y ago
        Parent comment was disputing the “obviously” claimed for US-based engineers.
    • beberlei 8y ago
      Yes. They are a belarus company, selling to mostly US companies, so probably pay little sales taxes. other taxes are paid on profit, so explicitly after employee salaries are paid. Salaries are usually the largest expense in many IT companies. They don't collect monitoring data or otherwise huge ingest of data from users, their server costs are probably low. Their main channel of acquisition is partners, I believe Basecamp+Asana doen't take money for being on their partners page. Both just link out to the websites of partners without any means of "tracking", so that seems a right assumption. If renting an office is more expensive than one monthly salary for one employee you have got yourself a palace, or you strategically choose the wrong city like SF or NY. 65% of my costs are salaries in my company. Looking at Buffers transparent cost report they are similar. From my experience talking to other business owners it is about the same, sometimes higher. Now depending on what profit margin you are targeting, lets say 20% pre-taxes for a bootstrapped business in growth mode (it is "low" because you are re-investing money into the company by hiring people) that leaves 800.000$ * 70% => 560000$ for salaries. More than enough for 7 people.
      • PacifyFish 8y ago
        You were disputing the “obviously” claimed for US-based engineers. Most of those are based in SF/Seattle/NY. Move the goalposts as you please.
• brianwawok 8y ago
  What? That is plenty to pay 7 employees in the US. Not in SF and not all senior developers.
  • djrogers 8y ago
    No, it’s really not - you’re either forgetting or are unaware of payroll taxes, insurance, etc. not to mention rent, electricity, capital expenses, and every other expense needed to run a business come out of that $1m.
    • brianwawok 8y ago
      No. In fact I run a bootstrapped SaaS business and am able to pay more than 7 employees on 1m. Do you have a source for your claims? My accountant can verify mine. Some of your list is silly. My electricity bill is $25 per month. My rent is $800 per month. I choose a smart place to open a startup, not SF.
• jiveturkey 8y ago
  > obviously not enough revenue to sustain 7 employees. it's completely unknowable. ARR is not enough data.