Churn rate is the single most important health metric when buying a SaaS business, because it tells you how fast customers are leaving and how much new growth you need just to stand still.

There are two kinds of churn to check: customer churn, which counts lost accounts, and revenue churn, which counts lost dollars, and revenue churn matters more when a few big customers dominate.

Benchmarks vary by market, but as a rough guide, monthly customer churn under 3 percent is strong for small SaaS, while anything above 8 to 10 percent means you are buying a leaky bucket.

Before you buy, ask the seller for churn by cohort and by plan, and find out why customers actually cancel, because the answers reveal whether churn is fixable or structural.

This additional check rounds out the picture and helps you act with confidence rather than guesswork.