Starting your own Software as a Service company can be a great business opportunity, as this type of business model still gains traction in the business world.
Affordable prices this kind of technology offers, easy-to-use software solutions and better connectivity options are the main reasons businesses opt for cloud-based solutions, instead of traditional software. Stats claim that 80% of US end-users prefer cloud hosted and SaaS apps for communication and organization purposes, compared to 51% just several years ago. Still, succeeding on the market takes more than a high demand for SaaS solutions.
Here are a few more things you should consider before giving your SaaS business a go.
Research the market
The first thing for you to do is to test your business idea, the one you will try out in the market.
To do this, you will have to do thorough research of your target customers, and find out if the solution you are offering is going to address some relevant pain points. Secondary market research is not enough when you are starting from scratch. You need to have a face-to-face conversation with people who could likely benefit from your service and see if your solution fits their needs and how much they are willing to pay for it.
Getting to know your competition and the solutions they are providing would be a part of your research too. You will find relevant info when doing the competition research, such as what it is they do to solve the problem of your target customer, and at what price. Try to determine what makes your competitors solution inadequate, and try to improve it. Search for the one thing that will make you differ from your competitors, but make it a relevant one.
Make a good plan
It is a good idea to start with a lean business plan, which can easily fit one page and which will focus on your strategy and your unique market value, and then develop it with all the details you will need.
Your business plan will usually contain:
- Executive Summary – the overview of your plan.
- Opportunity – description of the problem and a solution, your target customers and competition.
- Execution – how you will turn the opportunity into business (marketing and sales plans, metrics…)
- Company and management summary – members of your team, legal structure, history.
- Financial plan – sales forecast, personnel plan, income statement, cash flow statement etc.
It is of vital importance to think about planning as a vital part and a frame of your business process, and not just a piece of document you will need for formal reasons.
Make sure you’ve made testing of your service/product, as well as developing great customer support a part of your plan.
Consider funding options
One of the key points of opening your SaaS business comes down to your finances, and what funding options are available for your start-up.
Once you have a realistic picture of your start-up costs, as well as your exit strategy, you can consider options such as angel investors and venture capital to bootstrapping and crowdfunding. You need to analyze all of these options thoroughly and determine benefits and drawbacks for each so that you can have a clear picture of what you are getting into. Sometimes low rate personal loans may be just the solution you need to get your business going, without having to secure it with deposit or depend on anyone else.
But, if you are not an expert when it comes to finances and funding, and balancing available options seems like a difficult task, hiring a professional to support you when making a decision, might be the good option.
Check the regulations
Depending on where your business is located, as well as your prospective customers, you will need to brush up on any regulations which can be applied to your business. As the technology solutions you are offering are new, watch out for the latest changes in laws and rulings for similar products and services, as in the event of a potential incident, your business needs to be covered.
Brand your business
From the very first days of your SaaS business venture, think about how to best position your SaaS business, long before it reaches the market.
Try to think of your brand as your business personality, as the main purpose of a brand is to create a relationship between your company and your customers.
All your marketing efforts, apart from the obvious purpose to increase sales, should share the core values which lie within your brand and which will make your message authentic and coherent, no matter the source it is coming from. Define the ways to differentiate your company and your service from your competitors and use this at your own benefit.
So, if you are thinking about entering the market with your new SaaS solution, it’s essential to make a thorough inquiry of your niche and plan your venture carefully and guided by all the relevant regulations. A wise choice of the service you offer, as well as a fresh and well-tailored marketing strategy, will help your SaaS business thrive.