ARPU is $40
LTV $2,055,
Less than 100 companies that could generate $500 in MRR
Almost 3 million potential users
A business plan will give you a better idea. Map out revenues, costs, and margins for varying realistic range of business volumes and sales models. Do a 'what if' with than model. Analyze yourself and competitors deeply. An substantial scalable sustainable business margin is attainable even in low ARPUs if you get the business strategy right. Do give me a call if you want to flesh this out. All the best.
One of the main things to note here is that, when the ARPU is low, any abrupt decision is not advisable. Low ARPU might be a sign that you are not adequately extracting value from certain buyer personas for the service that you are providing to them. Here a serious sales planning is required. Why is sales planning essential? If you look at the role of a typical salesperson it involves lots of different activities. These include managing their time, prospecting, booking appointments, selling to customers, making presentations and negotiations. All these activities need careful preparation if we are going to be successful and hit our targets. The problem most salespeople have, at least those who sell face to face, is that they spend such a large proportion of their time on their own. There is no direct supervision, and they do not have a manager nearby, looking over their shoulder to see if they are doing things right.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Not sure, if you're looking for managerial advice or financial; here is some managerial advice. When I ran my startups we focused being lean, specially if the ARPU is low or adoption/growth is slow but steady. You need to have a lean team who wears multiple hats. Also, train early on using CRMs to scale your efforts and make everyone replaceable. If anyone leaves you don't lose on those potential sales since another can easily pick up where the other has left. Don't worry too much about lifetime value. Your focus as a young startup is to delight your end users and or the gate keepers for your end users. Be lean but be committed to double down as needed to ensure that you have done your best to delight this target. If you focus too much on numbers you'll lose sight of what's important at each stage of your company and may act on wasted efforts.
Don't worry too much about what other companies are doing or their numbers, unless you are literally cloned identical efforts and teams and service - their numbers mean absolutely nothing to you. Focus on your efforts only which focus on delighting your end users, invest in automation, crm and less on people. Keep a small staff happy by investing in tools that help your sales staff's bottom line - closing deals.
