Why steady-state MRR matters more than this month's number
New MRR is the inflow. Steady-state MRR is where the business actually settles when the bathtub fills up — new cohorts coming in equal old cohorts churning out. If steady-state is below your cost base, more leads won't fix it: retention is the leak.
Pipeline coverage: how many leads you actually need
If you need 20 new customers a month and you close 1 in 5, you need 100 SQLs entering the pipeline every month — not 100 form fills, 100 actually-qualified leads. Run this calculator against your number target, not your input target.
- • Self-serve SMB: 8–12× coverage typical (low close, low touch).
- • PLG + sales-assist: 4–6× coverage on trials → paid.
- • Mid-market AE-led: 4–5× coverage on qualified opps.
- • Enterprise: 3–4× coverage on stage-2+ opportunities.
Sales effort is the silent cost
An AE realistically sells ~120 hours a month (the rest is admin, internal meetings, pipeline hygiene). If the calculator says you need 600 sales hours, you need five AEs — or the close rate has to go up, the cycle has to compress, or hours-per-deal has to fall through better collateral and qualification.
What to do when the numbers don't work
The four levers — leads, close rate, deal size, retention — are not equal.
- • Raising close rate 5 points is usually cheaper than doubling leads.
- • Extending retention from 12 → 18 months adds 50% to LTV without touching acquisition.
- • Deal-size leverage (packaging, annual prepay) compounds with retention.
- • More leads at the same close rate just means more wasted sales hours.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
How is this different from an MRR or LTV/CAC calculator?
MRR calculators model existing recurring revenue and churn. LTV/CAC compares unit economics. This calculator works backward from raw lead volume and close rate to forecast how much MRR a sales motion will actually produce and how many AE hours it requires — useful for sales planning and headcount.
Should deal size be MRR or ACV?
Monthly contract value. If you sell annual contracts of $5,400, enter $450. The retention input handles the rest — a 12-month annual contract that auto-renews twice is effectively 36 months of retention.
What's a realistic close rate?
15–25% on qualified SMB leads. 20–35% on enterprise opportunities that reached stage 2+. Below 10% across qualified leads usually means the lead bar is too low or the ICP isn't tight enough — fix qualification before adding leads.
Why is steady-state MRR lower than I expected?
Steady state = new MRR × retention months. If new MRR is $20K and retention is 12 months, steady-state caps at $240K — and that's only when inflow equals churn. Most teams overestimate how long retention actually is; recheck against billing data, not the forecast.
How do I use this for hiring planning?
Take your MRR target, back out new customers needed, then back out leads. The sales-hours and AE-FTE rows tell you headcount required at current productivity. If FTE > current team, you need either more AEs or higher productivity (close rate, hours-per-deal) before adding leads.