It is a fact that the SaaS- Software as a service industry that began a technological innovation, has not turned into a crucial factor for every business. Utilized to automate and optimize the different processes and faster operations, most of the companies are using SaaS tools due to their amazing versatility and accessibility. It has also been predicted that in the coming years, there will be a huge demand for SaaS products. So, this is the right time to start a SaaS business. But how to do that? Keep reading to explore more.
What do you mean by a SaaS company?
SaaS includes a software program that can serve the users with a service. A SaaS business builds, hosts, develops, updates, and maintains the services from a central location. The best part is that a SaaS tool offers immediate access to the entire market across the world without charging any cost of delivery. The SaaS market is now rapidly evolving, and every year, the industry witnessed a lot of new players.
However, the opportunities are more. All you need to follow the right approach to start your new SaaS business. If you are planning to start a new business in this industry, then here are some important steps that you can follow. However, it is advisable to work with a popular and experienced software development company to develop a high-quality SaaS solution that can take your new business to a whole new level.
5 Steps to start a SaaS business:
1. Don’t forget to conduct customer and market research
As per the experts, the B2B model, where you sell your unique software as a service to other companies, can be very promising. The SaaS product that you want to offer should be able to offer solutions to several issues in the cheapest and better ways. Before launching the product, you should carry out comprehensive market research and interview some potential users to get the answers to some important questions, like:
- What are the requirements of the potential customers?
- Are there any solutions that match your solution? If yes, what are the cons?
- Will your potential customers be willing to pay for the subscription?
If you don’t have enough time to carry out the market research, you can take the help of a software company who can handle it for you.
2. Begin with an MVP
Well, the modern approach to start a SaaS business generally includes an MVP- Minimum Viable Product stage. You can hire a reliable software development company to make a basic mobile app or a web app within a few days. Using that, you can carry out the experiment, and you can show that to your potential investors. Talking about the MVP’s features, it may cover some basic features, or you can also add a lot of features to perfectly validate your unique idea.
However, you should remember that those features should meet the requirements of the potential customers. It is advisable to hire an experienced Software company or SaaS developer for this. They can assist you in some important decisions related to the MVP features. Besides, they will help you in choosing the right solutions and technologies and keep your project cost low.
3. Obtain funding for your SaaS business
Most of the new businesses fail due to cash-flow issues. Well, you can establish a business unit using your savings, but once your product is on the market, you will need more capital to keep running the unit. So, create a perfect business plan, and using that plan, you can easily obtain a loan to keep running the business.
While creating your business plan, make sure to perfectly explain what you will be doing as a SaaS business. And also outline the strategy for the next 4 to 6 years. To understand how much capital you will need, you need to carry out a detailed research and forecast realistic financial requirements. Besides, it will also depend on the complexity of the project. Don’t forget to consider the maintenance expenses of the.
4. Explore the pricing models
SaaS products generally utilize a subscription-based model for pricing. So, here your customers will pay for your product annually or monthly. This is a popular model as this can increase the lifetime value of potential customers. Instead of charging a flat lifetime amount, for example, USD 200 for the product, you can charge USD 16 per month per user as long as they are using the product. Remember that the longer they will use the product, the higher their lifetime value will be.
Furthermore, you need to find the right price. A SaaS company always tests the pricing models. Sometimes you may need to shift the price of the product to fit into the customers’ budget. And as the industry is very crowded, you need to be a little flexible in this. If you don’t know what your pricing should be, then you can start analyzing your competitors.
5. Analyze the success and enhance your SaaS product
After getting your business off the ground, you should work harder to keep it running and generating a decent revenue. Some of the important factors that you need to consider here are; implementation of rapid changes, active sales efforts, user testing, monitoring the metrics, flexibility with the SaaS product subscription cost, and more.
For instance, this is a stage where the direct feedback from the customers will help you to understand the requirements and that can suggest new features. Besides, you can come up with some new development strategies. Your software testing experts have to update, optimize and refresh the product frequently to ensure 24x7 availability of the software. On the other hand, your marketers need to enhance and experiment with digital marketing methods and correctly allocate the advertising budget.
It is always good to have a solid business plan. However, it is challenging to predict the possible obstacles along the way. But don’t feel discouraged. Always work with a reliable Software company like Enozom to give a perfect start to your SaaS business. Besides, before launching the product, carry out software testing. Move wisely.