Know Your Position on Every Lever
Before working through this checklist, read How to Value an HCIT Business, and What Makes It Different From Enterprise SaaS. It lays out why these levers matter in healthcare technology and how healthcare bends each one differently than a generic SaaS benchmark would suggest.
Understanding that these levers exist is step one. Knowing where you stand on each one, and what to do about it, is the work that moves valuation. Use this checklist to take stock.
1. Recurring Revenue Quality
☐ Is your revenue contracted, or does it depend on renewal decisions you cannot yet predict?
☐ Does your revenue recognition track closely with cash collections, or is there a meaningful gap?
☐ Can you separate recurring revenue from one-time or implementation revenue cleanly in your reporting?
☐ If a buyer asked for your revenue by cohort tomorrow, could you produce it?
2. Revenue Metric: Contracted vs. Recognized
☐ Do you know the difference between your contracted (booked) revenue and your recognized revenue, and can you explain the gap between them?
☐ If a large piece of your contracted revenue depends on one account or a long implementation timeline, have you thought about how a buyer might discount or structure around that risk?
☐ Would a buyer be able to assign full value to your contracted revenue, or would they want to see it convert to recognized revenue first?
3. Revenue Growth
☐ Is your growth rate accelerating, holding steady, or decelerating, and do you know why?
☐ Can you separate organic growth from growth driven by pricing changes, acquisitions, or one-time expansions?
☐ Are you growing in a way that is sustainable at your current margin and cash position, or is growth outrunning the resources funding it?
☐ If a buyer asked you to defend your growth rate for the next 12 months, what would you point to: pipeline, signed contracts, or hope?
4. Retention
☐ Do you track gross revenue retention and net revenue retention separately, and do you know the difference?
☐ Do you know what “good” retention looks like in your specific end market (outpatient, small provider groups, health systems, payers), not the SaaS benchmark, the healthcare one?
☐ If your end market has structurally higher churn, are you tracking retention more closely because of it, or less?
☐ Can you explain why customers churn when they do, not just the rate, but the reason?
5. Contract and Implementation Durability
☐ How long, on average, does it take a new customer to go live?
☐ Is your implementation process repeatable, or does every customer require custom work?
☐ What is your average contract length, and is it moving longer or shorter over time?
☐ Do your contracts include auto-renewal, minimum commitments, or termination-for-convenience clauses that could work against you?
6. Customer Concentration
☐ Does any single customer represent an outsized share of your revenue?
☐ Are your largest contracts long-term, or up for renewal soon?
☐ Is your revenue on your own paper, or routed through a reseller relationship?
☐ If your largest customer left tomorrow, would your growth story still hold?
7. Gross Margin
☐ Do you know your gross margin by revenue stream, software vs. services vs. implementation, or only blended?
☐ Do connectivity fees, integration costs, or data access charges specific to healthcare eat into margin in ways a generalist buyer might not expect?
☐ Is your margin trending in a direction you can explain and defend?
8. Customer Acquisition Cost and LTV
☐ Do you know your fully-loaded CAC, including sales, marketing, and the time cost of a healthcare sales cycle that typically runs longer than enterprise SaaS?
☐ Do you know your customer lifetime value (LTV), and is it calculated using actual retention data rather than an assumed customer lifespan?
☐ What is your LTV/CAC ratio, and do you know what is considered healthy for your specific end market, not the generic SaaS benchmark of 3:1?
☐ How long is your CAC payback period, and is it shortening or lengthening as you scale?
☐ Does your sales cycle length vary significantly by customer type (health system vs. small provider group vs. payer), and are you tracking CAC separately for each?
☐ If your LTV/CAC looks weaker than a typical enterprise SaaS comp, can you explain why (longer implementation, higher-touch sales, regulatory complexity), or does it just look like inefficiency?
9. Profitability and Path to Scale
☐ Do you know your Rule of 40 number (growth rate plus profit margin), and where it stands relative to your stage?
☐ If you are not yet profitable, do you have a credible, specific path to get there, or a general intention to “figure it out later”?
☐ Are your losses funding growth deliberately, or masking inefficiency you have not diagnosed yet?
10. Management Team and Transferability
☐ Does the business depend on you personally for key customer relationships, product decisions, or sales, or could someone else step in?
☐ Do you have a leadership team a buyer would view as capable of running the business post-close, or would continuity be a real risk?
☐ Have you documented institutional knowledge that currently lives only in your head?
11. Scale and Deal Readiness
☐ Do you know roughly where your revenue puts you in the universe of buyers who would seriously consider you: smaller strategics, growth equity, or full buyout funds?
☐ Have you thought about what size or maturity milestone would meaningfully expand your buyer pool?
☐ Is your reporting (financials, metrics, customer data) clean enough today that you could produce it credibly on short notice?
Where You Are Matters
Early-stage growth: Your story is ARR growth and retention. If you do not know your net retention number cold, that is the first gap to close. Profitability and management-team depth matter less right now, but do not ignore them entirely.
Mid-stage growth: Growth alone stops carrying the conversation. Gross margin, customer diversification, and transferability start mattering more: buyers are asking whether the business is durable, not just fast, and whether it can run without you.
Later-stage, pre-process: Every lever is in play at once. This is when profitability, management depth, and clean reporting stop being “nice to have” and start being underwritten directly.
If you are not sure which stage you are being evaluated at, that is worth a conversation before it is worth a process.
This checklist is a starting point, not a diagnosis. Turning any of these into an actual KPI, with a target, a timeline, and an owner, is where the real work happens. We can help you see the board clearly. Reach out to Bridgewell Advisory to talk through where you stand or to receive a downloadable copy.
