So you want to start a SaaS business? If you are willing to put in the time, research, effort and practice patience, there is no better time than the present to jump into the software as a service industry. With many businesses moving to the digital world and finding new ways to streamline services and communication, there are unlimited ideas in the market to help people do business better.
It is not only expert software developers, techies, or investors that succeed in starting a SaaS business. Anyone with a good idea, determination, and willingness can be successful at running a SaaS startup.
Outlined below are the basic steps to starting a SaaS Company to help get the gears of your mind turning and a stepping block to start from.
Determine Your SaaS Product
It goes without saying, but before you can begin building a program, seeking investors, or filing paperwork, you need a solid Software as a Service idea. Since you are still reading, the odds are pretty high that you may already have an idea or are at least familiar with the industry and know what part of the market you might fit into.
The key with determining what product you will market is finding something that people want or need that you know enough about or are willing to learn enough about to spend the next several years of your life dedicated to. Starting a company simply for the money with no personal interest is often not a recipe for success.
For When You Have an Idea:
If you already have a service idea in mind, great! You are a step ahead of the game. The key now is to make sure that your idea is needed and make sure that the market is open. For instance, trying to develop a ride-share app to compete with giants in the SaaS industry such as Lyft or Uber is not your best bet.
If your idea is geared toward fixing a pain point that you know is experienced and you can’t find a fix for it, you are on the right track!
For When You Need an Idea:
The best ideas are developed when you personally have dealt with a pain point or issue in an industry and know that a new app or add-on would be a welcome help. For instance, developing an app that is geared towards a particular industry such as food service tabs or office communication. When you know that the addition of a SaaS application would enhance the lives of it’s users and isn’t already available, you are ready to begin.
Assemble Your Team
You may be a superhero able to take on starting and running a business all on your own, but many are not. This is when having a co-founder comes in handy. This does not mean asking a friend who you get along with to help run a company, but finding a business partner who you can work well with that will bring different skills to the table. If you are more creative, finding a co-founder who is more analytical and business oriented may benefit you, and vice versa.
You will also need to assemble a team of experts to do the work. Even if you are tech savvy or involved in the software business, no man is an island and can be everywhere at once. Having a team composed of developers, designers, project managers, content marketers and more will ensure that every base is covered and nothing falls through the cracks. Assembling a team that is trustworthy, dependable, and dedicated can make all the difference in your companies’ success.
Build Your Design
It seems counterintuitive, but it is not important to have every aspect of the product worked out and in perfect condition before developing or launching the service. In many cases, it is after a launch that errors or gaps are found and tweaks need to be made periodically, it is likely that your service will never be perfectly complete.
Even if you think you’ve developed the perfect product, new information can change things quickly therefore it is better to launch a prototype to ensure that your time and efforts will be welcomed and pay off.
A prototype or minimum viable product is essentially a draft. This includes creating a landing page for your brand with the basic functions necessary to begin use of your service. This is a helpful tool when seeking investors because it allows for them to see a clear picture of what you are pitching, rather than complicated or technical jargon.
The first users or early adopters of this product will help give feedback by testing the product and allowing you to assess the overall user experience and how they interact with specific aspects of your service. Employing a prototype or MVP helps you to publicly and officially launch an already tested and efficient product.
Once you have a product to work with, it is time to develop your Go-To-Market Strategy. Before advertising your product, it is wise to conduct plenty of market research to find out where you fit in and who your target audience is. You must decide what size of business will be your target market, how high the relationship touchpoint between your staff and potential customers will be, what type of plans you offer, and what advertising resources you will use.
Many of these decisions will be determined by the number of users you acquire and may change as your business grows. Most mistakes or failures in the SaaS world are due to lack of forethought and research so it is always smart to be a step ahead and thorough in your marketing plans.
It’s obvious that your pricing model is important to the success of your company but the process involves much more thought than picking a number and running with it. You must first decide what type of model you will launch with and then reassess and adjust as necessary.
A few Pricing Models and Strategies to choose from are: Flat Rate, Tiered, Per Feature, Free with Ads, or Free Trials. The option you choose will depend on the type of service you offer and amount of users you wish to support.
The timing of this step is actually very subjective depending on your situation. If you are investing into the company yourself or bankrolling the first few phases you may be able to postpone searching for investors and financing. But if all you have is an idea and shallow pockets, you may need to seek out investors before making any real moves like hiring a team of developers.
There are many different approaches to financing your business, each with it’s pros and cons. Because every scenario is different, we recommend familiarizing yourself with the options and seeking out professionals to help guide you.
At RevTek Capital, we specialize in Revenue Based Financing that allows you to retain complete ownership and control of your company at low monthly costs. Contact us at (480) 332-0399 to discuss if a partnership with RevTek Capital is the best way for you to gain financing for Starting a SaaS Business.