Software As A Service (SaaS) entails being a host on your server to software that your clients access as a web-based application or via their online browser. Thus, SaaS is also called a hosted or web-based solution. Here are ten tips to build a successful SaaS business.
Find a Solution to a Problem
You need to have a solution to a problem that you can help users with. Check this list to get an idea of the types of SaaS businesses. Your solution must be cheaper, faster, or better. If you have experienced the problem yourself, you are in a good position to find a solution.
Create a Lean Business Plan
Aim for a sales pitch that can be contained on a page, one per idea. More than this initially is not necessary as you are still working through different solutions. The sales pitch should begin with a sentence describing the business, the problem, the solution (service or product), who your competitors are and what you offer that they don’t, the sales channels you will use, and the employees/positions required. Next, it should explain what you plan to do and how you will action it, your financial business model, and a schedule assigning tasks and dates.
Test Your Ideas
Consider each idea for if it will bring in a viable income. Test it ‘live’ by asking potential customers if they would use your product or service if they have experienced the problem you have a solution for, and how much they would pay for it. Find out if they are using an alternate solution. See how your idea measures up and how you can improve on their solution. You may need to create a minimum viable product for this testing phase.
Choose a Pricing Model
Many SaaS businesses prefer recurring revenue models for pricing. Customers nowadays exhibit a preference to use a product or service rather than to buy it outright. This provides you with a recurring income revenue that could be a monthly debit, a quarterly subscription, or an annual fee. It increases customer retention.
You need to position your company with a brand that customers will instantly recognize and respond to. It must clearly distinguish you from competitors and express the tone of your company. Branding should be accompanied by a domain name that is easily remembered.
Comply with Legalities
Align yourself to the regulations and standards of the industry you are in. Choose a business structure and name for your business. Register your business.
If you have the capital to invest, this is better than taking loans with costly interest repayments. Tap into friends, family, and your network. A venture capitalist is another option. Balance this against any loss of control it would incur. You will need a forecast of your financials to get funding. But make sure your idea will float before going this route.
Construct Your Product/Platform/Software
SaaS companies tend to use an agile development method to build their product. During development, you may come up with additional ideas to improve it. This method will help you to incorporate them into the final design. Protect your intellectual property by designing your product in-house.
Prepare and send out press releases to journalists writing about your industry. Get active on social media. Create a website and a blog; post good content often. Be informed on SEO (search engine optimization) and use it.
You won’t be able to track your performance unless you measure it. Metrics will inform your decision-making and help you stay on track for success or highlight a deviation that needs correction. Choose a few key metrics and link them to milestones (a date in the future/monthly/annually). Almost a third of new companies crashed because they ignored metrics.
These tips will keep you focused on the most important aspects of starting a SaaS business.