saas product business plan

SaaS Business Plan Template

Written by Dave Lavinsky

SaaS Business Plan

Over the past 20 years, we’ve helped over 10,000 entrepreneurs create successful SaaS (Software as a Service) business plans. This step-by-step guide will show you how to start and grow your SaaS business. You’ll learn how to make a plan that outlines your business goals and how to achieve them. Let’s get started on building your SaaS company today!

Download our Ultimate SaaS Business Plan Template here >

What Is a SaaS Business Plan?

A business plan provides a snapshot of your SaaS business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your business plans.

Why You Need a SaaS Business Plan

If you’re looking to start an SaaS business, or grow your existing SaaS business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your SaaS business in order to improve your chances of success. Your SaaS business plan is a living document that should be updated annually as your company grows and changes.

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How to write a business plan for a saas company.

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of SaaS business you are operating and the status; for example, are you a startup, or do you have an SaaS business that you would like to grow?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the SaaS industry. Discuss the type of SaaS you are offering. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of SaaS you are offering.

For example, you might offer the following options:

• Horizontal SaaS – this business model allows big SaaS businesses to serve a varied customer base from a multitude of industries. Services can be expanded to incorporate a variety of software categories.
• Vertical SaaS – this business model includes solutions that are created for a specific customer type of industry. This software focuses solely on that industry’s needs.

In addition to explaining the type of SaaS you provide, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include usability goals you’ve reached, number of new subscriptions, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the SaaS industry. While this may seem unnecessary, it serves multiple purposes.

First, researching the SaaS industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your SaaS business plan:

• How big is the SaaS industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your SaaS service. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your SaaS business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: businesses, households, government entities, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of SaaS you offer. Clearly, households would want different products and services, and would respond to different marketing promotions than government entities.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other SaaS services.

Indirect competitors are other options customers may use that aren’t direct competitors. This includes customized software solutions and open source software. You need to mention such competition to show you understand that not everyone who needs software will subscribe with an SaaS company.

With regards to direct competition, you want to detail the other SaaS providers with which you compete. Most likely, your direct competitors will be SaaS providers offering similar solutions.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of software do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior products?
• Will you provide services that your competitors don’t offer?
• Will you make it easier or faster for customers to use your products?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion.

For a SaaS business plan, your marketing plan should include the following:

Product : in the product section, you should reiterate the type of SaaS business that you documented in your Company Analysis. Then, detail the specific solutions you will be offering. For example, in addition to Customer Relationship Management solutions, will you also offer Email Marketing solutions?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your SaaS company. Document your location and mention how the location will impact your success. For example, is your SaaS production or support office located in the US or in India, etc. Discuss how your location might impact customer attraction or retention.

Promotions : the final part of your SaaS marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in trade magazines
• Reaching out to associations that correspond with the industry or industries you are targeting
• Publishing articles or writing guest posts on relevant blogs
• Social media marketing
• Radio and/or TV advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your SaaS business, such as attracting customers, running the customer helpdesk, processing paperwork, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect your 100 th subscription, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth programmer, or when you expect to launch a new solution.  

Management Team

To demonstrate your SaaS business’ ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in SaaS. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in software development or deployment, and/or successfully running small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you have 10 enterprise subscribers or 500 individual subscribers? And will subscriptions grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $200,000 on building out your SaaS solution, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $200,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a $100,000 customization contract, that would cost you $75,000 to fulfill. Well, in most cases, you would have to pay that $75,000 now for employee salaries, hosting, utilities, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an SaaS business:

• Location build-out including design fees, construction, etc.
• Cost of equipment like computers, design and project management software, etc.
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office design blueprint or location lease.  

Putting together a business plan for your SaaS company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the SaaS industry, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful SaaS business.  

Sources of Funding for SaaS Businesses

With regards to funding, the main sources of funding for an SaaS business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for an SaaS business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

SaaS Business Plan FAQs

What is the easiest way to complete my saas business plan.

Growthink's Ultimate SaaS Business Plan Template  allows you to quickly and easily complete your Saas Business Plan.

How Big is the SaaS Industry?

The Software as a Service (SaaS) industry in the United States is a significant and rapidly growing sector. As of 2023, the market value of the SaaS industry in the U.S. is approximately $108.4 billion . This industry is expected to continue its growth trajectory, with projections indicating that it could reach a market value of $225 billion by 2025, solidifying the U.S. as the world's largest SaaS market

The SaaS industry in the U.S. has seen remarkable growth over the past decade, driven by the increasing adoption of cloud-based solutions across various sectors. This growth is attributed to the flexibility, scalability, and cost-effectiveness that SaaS solutions offer businesses, ranging from small startups to large enterprises. The U.S. market, being a global leader in technology innovation, plays a pivotal role in the development and proliferation of SaaS products.

Key trends shaping the industry include the integration of artificial intelligence and machine learning, which are enhancing the capabilities and efficiency of SaaS applications. There's also a significant push towards vertical SaaS, providing tailored solutions for specific industries like healthcare, finance, or retail, which require specialized software.

The competitive landscape in the U.S. is robust, with both established players and emerging startups vying for market share. There's a continuous emphasis on innovation, customer experience, and service integration. Security and compliance, especially with regulations like GDPR and HIPAA, are also critical concerns for SaaS providers in the U.S., given the sensitivity of data handled by these applications.

The market is also witnessing a shift in revenue models, with many companies moving away from traditional subscription models to usage-based pricing to cater to a broader range of customers. This shift is a response to the growing demand for more flexible and customer-centric pricing structures.

In terms of challenges, the industry faces issues such as market saturation in some segments, rising customer acquisition costs, and the need for constant technological upgrades. Despite these challenges, the U.S. SaaS industry's outlook remains positive, with continued growth expected, driven by ongoing digital transformation in various sectors and the increasing reliance on cloud-based solutions.

Overall, the U.S. SaaS industry represents a dynamic and vital segment of the tech sector, characterized by rapid innovation, a strong focus on customer needs, and a significant impact on how businesses operate and grow in the digital age.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of Saas business you are operating and the status; for example, are you a startup, do you have a Saas business that you would like to grow, or are you operating multiple Saas businesses.

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How To Create A SaaS Business Plan In 11 Steps: Full Guide

• November 17, 2023
• Fundraising

Software as a service (SaaS) is the fastest-growing market segment of the past 5 years: the overall spend per company on SaaS products was up +50% in 2021 compared to 2018!

Yet, SaaS do require significant upfront investment before they can turn out a profit. Whether you are raising capital or applying for a grant, you will need a solid business plan for your SaaS startup.

Whilst every business is unique, we strongly recommend to follow a clear structure vetted by dozens of high-profile VC firms globally. Having a powerful and clear business plan will maximise your chances of raising capital from potential investors.

In this article we walk you through the 14 sections you must have in your SaaS business plan.

No te: If you are looking for a pitch deck instead, read our guide here . Although business plans and pitch decks are similar, they are also very different in their format. If you aren’t sure what is best for you, we recommend to read our article on the key differences between business plans and pitch decks .

SaaS Business Plan: The Template

If you are creating a business plan for your SaaS startup, we recommend you follow the following structure:

• Executive Summary
• The Problem
• The Solution
• Market Opportunity
• Competitive Landscape
• Business Model
• Intellectual Property
• Marketing Strategy
• Financial Plan

1. Executive Summary

The executive summary is the introduction of your SaaS business plan. This is a section you should spend a lot of time on as it’s the first impression investors will have when looking at your business plan.

The executive summary should fit in 2 pages maximum . Make it to the point, concise, and make sure to answer the following questions:

• What is the problem you want to solve?
• What is your solution?
• Who are the co-founders behind the project?
• Do you have early traction?
• What are you asking for (capital from investors, government grant application, etc.)?

Expert-built financial model templates for tech startups

2. The Problem

This is the “why” of your business. Explain in this section what is the problem you are trying to solve.

The greatest businesses are solving big problems, yet they aren’t necessarily obvious . For instance, if your SaaS startup aims to solve the pain points of HR administrative tasks (human errors, low digitalisation, time-consuming, etc.) make it clear here. Not everyone is knowledgeable about companies’ support functions processes, let alone HR.

Ideally you would list the 2/3 friction points you aim to fix. For instance, digitalisation usually fixes multiple problems at once: it is fast, seamless and accessible (vs. slow, prone to errors and non-readily available / accessible solutions).

3. The Solution

Your startup builds and commercialises a product and/or a service which solves the problem explained earlier.

This section should not explain in detail your product nor how it works. Instead, it should focus on the benefits for your customers .

Ideally, you should compare the pain points explained on section 2 (the Problem) to the benefits your solution brings to your customers. That way,  it is crystal clear to investors your solution really adds value to potential customers .

4. Market Opportunity

Here, you need to clearly identify 2 very important metrics:

• Market size :  how big is your market?
• Market growth:  how fast does your market grow?

If you are operating in a niche market, chances are that you will face some challenges: the information might not be publicly available. In any case, you should be able to make a high-level estimation of your market.  Read our article on market sizing and how to estimate TAM, SAM and SOM for your startup .

When looking for these metrics, you have multiple sources of information: public reports, specialised press, etc. Even public companies publish press releases and annual reports including some of their proprietary market estimates so be sure to look there too.

5. Competitive Landscape

How fragmented is your market.

Are there 3 big players sharing 90% market share or thousands of small players? Here, refer to public market reports and your own understanding of the competitive landscape.

A few questions you could ask yourself, among others:

• Who are your competitors?
• Are they local, regional, national or global?
• Do they have mobile and/or desktop applications?

Where do you position yourself vs. competition?

Is your solution a game changer other competitors don’t have (yet)? Do you have competitors with similar products/services?

Ideally, you would create a small table with, for each type of competitors (e.g. global diversified companies, small pure players, etc.) the main characteristics they share or not. For instance, do they all a global presence? Do they have a on-premise or a SaaS solution? Do they offer both a desktop and mobile app, or just desktop? What is their relative price positioning (expensive vs. accessible)?

6. Business Model

This section is very important. Now that we have clearly identified the problem you are solving and the benefits of your solution, let’s have a closer look at your product.

This is where you clearly explain 2 key things:

How does your product work?

Explain what your product is and how it works. For instance, is it a desktop and/or a mobile SaaS application? Who is it for exactly (is this a FP&A application only for CFOs or a Slack-like collaboration tool for any type of user)?

Pricing model

SaaS businesses have different types of pricing models: per-user, per-usage, flat-tiered, etc. For a full list of the different pricing models, refer to this great article here .

7. Intellectual Property

This section is optional: only include it if you already have a MVP. If so, you have a strong argument for product-driven investors which will give a lot of credit to your tech.

Be careful not to go into too many specifics though: investors aren’t always engineer by training. Do not put things like the programming language you have chosen (e.g. React, Python) or the database provider (PostgreSQL, MongoDB).

Instead, include things such as:

• whether you have a white-labelled solution or a proprietary back-end / database
• how many full time front/back-end engineers you have
• how much you invested already in your tech

8. Marketing Strategy

This section explains how you acquire customers .

Are you selling a SaaS solution to B2B customers? Or is this a B2C product? This will determine whether you have an inbound or outbound acquisition strategy, or both:

• Inbound acquisition : fully digital acquisition. It can be either paid (paid ads e.g. Google Ads) or organic (content, SEO). Essentially, you convert customers from leads who land on your landing page. This strategy is most common for B2C SaaS businesses
• Outbound acquisition : you acquire customers thanks to your sales team who contact potential customers via phone, emailing or in-person sales efforts. This strategy is very common for B2B SaaS businesses

Once you have clearly explained your acquisition strategy and what tools you are using (e.g. Google Ads for paid search, Instagram and/or newsletter for content), ideally you can show, among others:

• Your average Customer Acquisition Cost (only if you have early traction)
• The number of sales people you have today
• How many customers your sales people close per month in average
• Your monthly paid ads budget
• The number of followers you have on social media
• Your newsletter count

The roadmap tells investors where you are going and how is product going to evolve in the future. You can either keep it high-level (e.g. your long-term strategy) or more detailed (e.g. the pipeline of the near-future product features).

Investors do not just invest in your product as it is today. For example, you might only have developed a MVP with limited features for  early-adopters  while your product could be tweaked and serve a much larger customer base in the future.

Note: if you choose to include your product pipeline, keep it very simple. Your SaaS business plan isn’t your product manager’s presentation to engineers.  Instead of features, focus on the additional benefits and customer segments you might target  as such. For instance, if you plan to launch a messaging feature, focus on the fact it will open new growth opportunities (e.g. network effects).

In this section you should focus on the people behind the company. Unlike in the executive summary, the team section of your SaaS business plan should not be limited to the cofounding or management team.

Instead, you should explain the current organisational structure of your company, the different teams, who they report to and their relative size.

For the people, keep it short. Keep biography to a minimum and only to key people (cofounders and management team). As rule of thumb, 5 lines per team member are enough, 10 a maximum.

When it comes to biographies, only include what is relevant: name, position, years of experience and/or previous companies is more than enough.

What about advisors?

Do you have angel investors with significant experience who advise you on strategy? Do you have a PhD who acts as advisor to your SaaS startup (on regulation and market access matters for instance)?

Any advisor should also be included here, with the same level of detail as for the management team.

Demonstrating in your SaaS business plan that not only team members but also experts are advising and/or sitting on your board is a strong selling point.

Note: add a clickable link to the respective Linkedin profiles so investors can refer to a more exhaustive resume for your team members (if relevant)

11. Financial Plan

Along with your product and the team, this section is highly important. Unfortunately, many startups overlook the importance of financial projections in their SaaS business plan.

Think about your audience: investors (venture capital firms or angel investors) are financially literate individuals . As such, they invest in your business to generate returns. Logically, they care a lot about your financials and more especially, the expected financial performance of your business .

Do not expect investors to make up their own plan for your startup if you haven’t. As CEO, founder or entrepreneur alike, you should have a clear idea of where you are going .

As rule of thumb, the more advanced your startup is, the more granularity you should include here. Pre-seed startups might keep it short (1 slide) yet we recommend seed and Series A+ startups to include 2 slides instead.

Common SaaS metrics you should include in your financial plan slide are:

• Monthly Recurring Revenue (MRR)
• ARPU and ARPPU
• LTV and CAC

For a complete list of the 8 most important metrics for SaaS businesses, refer to our article here .

SaaS Financial Model

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The Ultimate Guide to Writing a SaaS Business Plan with Examples and Templates

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Whether you’re an aspiring entrepreneur or a seasoned veteran, there’s no denying that writing a SaaS business plan is a critical step in launching your SaaS startup . In this article, we’ll give you the lowdown on what goes into writing the ultimate SaaS business plan.

Introduction

Did you know that 70 percent of businesses that follow a strategic business plan manage to survive for five years? 

But here’s the deal — the way you write your SaaS business plan differs a little from the way you might write plans for a more traditional “lifestyle” business. There are unique considerations that can help your business succeed or fail.

It’s necessary to validate your business idea and build a compelling case for investors. If you’re starting a SaaS business, there is an even greater need to create a solid business plan because the resources required to fund growth are often higher relative to other types of online businesses. 

An excellent SaaS business plan lays out essential aspects of your business, from mission and values to marketing strategy and financial projections. It also helps you consider any potential risks and create contingency plans.

If you are considering developing your own SaaS business, this guide discusses what a SaaS business plan should include and how to create an outstanding one. 

We’ll cover areas like your business model examination, marketing, financials, and how to make sure your plan doesn’t include any holes.

What is a SaaS Business Plan?

A SaaS business plan is the roadmap for your software-as-a-service (SaaS) business. With this plan, you can specify steps you need to take to make your business succeed. It basically helps you stay organized and keep track of your progress.

When creating a SaaS business plan, you must consider many factors, including customer segmentation, customer acquisition strategy, pricing structure, marketing, and operational costs. It’s also essential to set short-term and long-term goals to stay on track. 

Moreover, the plan is vital for communicating with potential investors and customers, giving them a clearer insight into the product and its value.

Why Do You Need a SaaS Business Plan?

1. increased clarity.

A SaaS business plan creates clarity around your goals and objectives by articulating them in an understandable format. This plan gives you the foundation for making decisions moving forward, helping you identify potential challenges or opportunities down the road. Whether it’s for yourself, investors or shareholders, having a well-thought-out business plan can be invaluable when it comes to mapping out your trajectory for success.

2. Assign Responsibility

A SaaS business plan focuses on the project and keeps it organized, on track, and ultimately profitable. If your organization lacks a plan, you may find that progress is slow. Projects may get sidetracked or confused, and you may have trouble communicating goals to the team.

With a plan in place, your management team can see who’s responsible for what tasks, when those tasks need to be completed, and how their efforts are contributing to the overall project. It makes it easier to measure performance and set up rewards. 

And at the same time, if someone falls behind or is underperforming, it’s also easier to identify which area needs improvement—all thanks to having a well-defined SaaS business plan.

3. Manage Change

When running a SaaS business, you must always be ready for a pivot. Having a detailed plan helps you prepare for any curve balls that may come your way. A plan is also helpful when expanding or trimming staff or services—it ensures that everyone is on the same page and understands your ultimate goals.

4. Secure Funding

Having a business plan is critical if you’re trying to secure funding for your SaaS project. Investors want to know that you have accounted for all aspects of your project. 

Most are particularly interested in seeing your business model and product, competitive edge, customer acquisition strategy and financial projections. These insights help them to determine the potential profitability of your venture. 

Your business plan typically shows investors how much money they will need to invest in getting the project off the ground.

Pro tip! Discover the techniques and best practices of price anchoring , a pricing strategy you can use in your business plan.

Crafting a Winning SaaS Business Plan Outline

We’ve mentioned earlier that a SaaS business plan is the roadmap you need to create a successful software as a service company. With the right plan, you can identify your target market, outline your strategy, and secure the resources you need to get started. 

Here are the ‘must-haves’ in your outline to get started on the right foot.

1. Executive Summary

The executive summary is a “30-second pitch” that encapsulates the key elements and essential information about your business in a few short paragraphs. It’s the first chapter of your SaaS business plan, setting the tone for the rest of your document. 

The executive summary should be clear and concise while providing enough detail to paint a vivid picture of your business concept and goals.

Potential investors or partners should be able to quickly understand your business goals and concept, as well as your competitive advantages and mission. Hence it’s best to keep your text concise.

You should;

• Include all the essential points and briefly explain how you plan to reach your objectives. 
• Communicate why your company will succeed in this space relative to competitors in the market at large. 
• Finally, don’t forget about visual aids—add charts and other visuals that can help illustrate your points throughout your executive summary to strengthen its impact and clearly present information.

                                                                        Image source 

You can see that this very brief executive summary includes an overview of the product, market, and mission. 

Describing your product and market are particularly essential because they provide a framework for writing about your business model in a way that is focused on your target audience and clear to potential investors.

2. Identifying the Problem

The problem statement clarifies why you create your product or service and why customers need it. It should be succinct and designed to establish your company’s unique purpose and value proposition in the marketplace. 

To write a comprehensive problem statement, you need to research and analyze industry trends to identify the unique problems that your product will solve.

Tools such as the Google Trends search engine or the Pew Research Center are excellent resources for conducting industry research. You can use Google Trends to view the relative popularity of search terms over time, while the Pew Research Center provides access to industry-specific survey data. 

Tools like these can help you identify gaps in the current marketplace to help you create a compelling problem statement.

After your research, use straightforward language to articulate the primary issue your product or service addresses. Remember to keep it Simple. Refrain from overloading readers with too much information; keep it straightforward and easy to understand.

3. Asserting Your Solution

Once you’ve detailed the problem, you need to create a case study for why your solution is the ideal one. Solutions in a SaaS business plan typically refer to the product or service your company provides. 

In this section of the business plan, you must clearly articulate how your solution will be better, faster, or cheaper than the competition. 

As you explain the advantages of your solution, provide concrete data, such as customer testimonials, to back up your claims. It is also important to emphasize the value proposition and the differentiating characteristics that set your solution apart from the competition.

Ultimately, convincing potential customers that your product is better than any alternative will be a key part of gaining their trust. The more information you provide in this section, the more likely potential customers are to understand the value of your product and choose your solution over the competition.

4. Market Opportunity

Market opportunity refers to the potential size and growth of the available market for a business’s services or products. It is an important consideration in the business plan as an essential part of determining the potential success of the business concept. To assess and identify market opportunities, you must first understand your target market.

Check out this graph to find out the approximate global SaaS market growth:

Understanding your target market involves researching the product or service, the target customer demographic, and the market situation for similar products or services. Websites like US Census Bureau , Answer The Public , and Statista can help you uncover actionable insights to identify opportunities, such as untapped markets or customer subsegments that may be more receptive to your SaaS product. 

It is also essential to consider any potential trends or changes in the market, such as new laws and regulations, technology, or changes in customer behavior, that could impact the market. Trend research can help inform pricing and marketing strategy for better long-term success.

You can see that this outlines the potential trend and growth of the cybersecurity market following an analysis by IBISWorld. 

5. Competitive Analysis

The next section of your SaaS business plan should be a competitive analysis. In this part, you look at—and compare yourself to—your competition. This survey helps you understand the current market, identify areas of advantage and disadvantage, and develop strategies to help you stand out from the competition.

Writing a good competitor analysis begins with identifying who your competitors are. Tools like Similarweb can help you find direct and indirect competitors who offer similar services or products differently. For each competitor, you listed, describe the services they provide and their strengths and weaknesses.

Next, spell out the differences between your offer and your competitor’s. Analyze their pricing structures too. Are customers willing to pay more for specific product features? How often do copycats come along? Is there a demand for cheaper alternatives? Understanding these dynamics can help you create better pricing strategies for your SaaS business plan. Popular SaaS pricing strategies include penetration pricing , trial pricing , and psychological pricing .

You can also conduct an SEO competitor analysis   to get a better understanding of your competitors’ strategies. This, in turn, will help you craft a more strategic marketing plan to outperform your competitors’.

6. Business Model Examination

Business model examination in a SaaS business plan involves analyzing and defining how the company plans to generate revenue and create value for its customers. This section includes an in-depth study of key elements of the company’s revenue model, such as pricing strategy, target market, cost structure, sales and marketing channels, and customer acquisition strategy.

The business model examination allows you to ensure that your assumptions are solid and strengthen weak areas. It also validates ideas and visualizes how they stand up compared to competitors in the market. Here, you’ll typically answer important questions such as:

• What value does the SaaS offering provide to its customers?
• How will the company monetize its SaaS offering?
• Who are the target customers, and what are their needs?
• What are the key costs associated with delivering the SaaS offering, and how will these costs be managed?
• How will the company acquire and retain customers, and what is the customer acquisition cost?

7. Marketing Plan and Strategy

This section details a comprehensive strategy for attracting and retaining customers by communicating the value of the company’s offering. It outlines the steps the company will take to build awareness and demand for its product and how it will retain its existing customer base.

A typical marketing plan in a SaaS business plan includes the following components:

• Target market analysis : Identify the target customer segments, their needs, and how the SaaS offering addresses those needs.
• Competitive analysis : Identify the competition and assess the company’s competitive advantage.
• Value proposition: Define the unique value the SaaS offering provides customers and how it differentiates from the competition.
• Positioning strategy : Determine how the SaaS offering will be positioned in the market and how the company will communicate its value proposition to its target customers.
• Marketing mix : Define the marketing mix, including product, price, place, and promotion, and how they will be used to achieve the marketing objectives.
• Marketing budget : Establish the marketing budget, including the cost of marketing campaigns and tactics and how the budget will be allocated to different marketing channels.
• Marketing KPIs : Define key performance indicators (KPIs) to measure the marketing plan’s effectiveness and track progress.

To learn more about measuring your marketing KPIs, read our comprehensive guide on essential SaaS metrics to track and improve growth.

8. Timeline and Map

A timeline is a visual representation of the key milestones and events the company intends to achieve in a specified period. 

The timeline should outline the significant events such as;

• product development
• marketing campaigns
• key hires, as well as the expected completion dates for each event. 

The timeline provides a roadmap for the company, ensuring that the business stays on track and meets its goals.

To create a comprehensive timeline in your business plan, determine what you want to achieve with your SaaS business. Next, identify the key events that need to happen for your business to achieve its goals. These events can include product development, launch, marketing campaigns, and key hires.

After identifying key events, assign a realistic time frame for each milestone, considering any dependencies or constraints. This step will help you to determine the expected completion dates for each event. 

Finally, choose a format for your timeline that is easy to understand and visually appealing. A Gantt chart is a popular choice for creating a timeline, as it provides a clear and visual representation of the timing of each event. You can use a tool like TeamGantt to create Gantt charts.

9. Your Team

Your management team, composed of founders, executives, and everyone in between, are responsible for turning your brilliant idea into a reality. That’s why exploring how your team and plan mesh together is essential to create something truly unique.

In this section, you’ll want to talk about the experience and qualifications that your team brings to the table — including relevant work history and industry knowledge. You’ll also want to talk about how roles are divided among team members and how those roles might evolve.

If the company has a board of directors and advisors, this section should describe their background and experience and how they will contribute to the business’s success. The team section should also outline the company’s plans for future hiring and how the new hires will fit into the company’s overall strategy.

10. Financial Plan

A financial plan is one of the essential parts of your SaaS business plan. It lays out your current and future financial needs so that investors know where you are now and understand where you intend to be in the near and distant future. Here are some key elements to include when writing the financial plan section.

• Projected income statement: Provide a detailed projection of the company’s revenue and expenses over a period, usually 3-5 years.
• Projected cash flow statement: Show the company’s expected cash inflows and outflows over the same period as the projected income statement.
• Projected balance sheet: This section should show the company’s projected assets, liabilities, and equity at the end of each year. 
• Break-even analysis: Show the point at which the company’s revenue will equal its expenses and how long it will take to reach that point.
• Assumptions and risks: Outline the assumptions and risks underlying the financial projections, such as changes in the economy, competition, and customer behavior.
• Capitalization table: This section should show how the company will be funded, including equity investments, debt financing, and other funding sources.

In today’s world, the process of creating a business plan has become much easier. You can find freelancers online who can help handle time intensive parts of the process like research and formatting, making it possible for you to focus on what matters most — your business strategy. 

You can also find templates online that allow you to plug in your own information and print out pages with everything you need.

For example, SCORE provides fillable worksheets to help you cover these key pages in your business plan. The US Small Business Administration (SBA) also offers sample templates for both modern lean startup and traditional business plans. Additionally, you can find free templates on PandaDoc . 

Pro tip! Trial pricing method is another pricing approach you can use when writing a winning SaaS business plan.

Final Thoughts

Now you see, you don’t have to be an excellent wordsmith or planner to craft a winning SaaS business plan. The steps in this guide will help you to organize your thoughts and create a comprehensive plan for your business.

Adaline Lefe Mary John

A great researcher and creator, Adaline is responsible for planning and managing content for all our websites. She has over 10 years of experience in creating and managing content.

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Methodology

• Who? We are SaaS experts: Our specialists constantly seek the most relevant information to help support your SaaS business.
• Why? We are passionate about users accessing fair SaaS pricing: We offer up-to-date pricing data, reviews, new tools, blogs and research to help you make informed SaaS pricing decisions.
• How? With accurate information: Our website manager tests each software to add a Genius Score using our rating methodology to each product. Our editorial team fact-check every piece of content we publish, and we use first-hand testing, value metrics and leading market data.

SaaS Business Plan Template

Written by Dave Lavinsky

SaaS Business Plan

You’ve come to the right place to create your SaaS business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their SaaS companies.

Saas Business Plan Example

Below is a saas business plan template to help you create each section of your own business plan.

Executive Summary

Business overview.

All In One is a startup B2B SaaS company located in Los Angeles, California. The company is founded by Melissa Johnson, a business strategist with more than fifteen years of experience helping other businesses develop their operations and processes to optimize customer management, sales and marketing, and project flow. Melissa has garnered a positive reputation of helping companies become more profitable by using SaaS technologies to improve their efficiency. Now, Melissa is ready to venture out with her own SaaS platform. As the name implies, All In One will be a one-stop-shop SaaS platform to help enterprises of all sizes to streamline their saas business operations.

Melissa has enlisted the services of a software developer, Paul Smith, to be the Chief Technology Officer of the company and manage the technical aspects of the SaaS platform. Melissa plans on recruiting a small team of highly qualified professionals to help manage the day to day tasks of running a SaaS company including sales and marketing, customer support, financial reporting, and technology maintenance and optimization.

All In One will provide a comprehensive array of SaaS services beneficial to any business owner who wants to improve their efficiency. All In One will allow each client to ensure that every aspect of their enterprise is being managed seamlessly. All In One will be the ultimate choice for B2B SaaS services while being the most user-friendly platform around.

Product Offering

The following are the solutions that All In One will provide:

• Customer Relationship Management (CRM)
• Project Management (PM)
• Enterprise Resource Planning (ERP)
• Sales Funnel Management
• Financial Management
• Human Resources Management (HRM)
• Communication Solutions
• Automated Marketing Solutions

Customer Focus

All In One will target all small-to-medium (SMEs) and corporate businesses in the United States. They will target businesses in every industry and sector. They will also target companies that already use other SaaS platforms as well as companies brand new to SaaS solutions. No matter the client, All In One will deliver the best interface, customer support, and net profit.

Management Team

All In One will be owned and operated by Melissa Johnson. She has recruited an experienced software developer, Paul Smith, to be her Chief Technology Officer and help manage the SaaS technology.

Melissa Johnson is a graduate of the University of California with a Bachelor’s degree in Strategic Management. She has been helping other businesses develop their operations and processes to optimize customer management, sales and marketing, and project flow for over fifteen years. Melissa has garnered a positive reputation of helping companies become more profitable by using SaaS technologies to improve their efficiency. Melissa’s strategic skills and diligence have allowed her to develop a network of loyal clients.

Paul Smith has been a software developer for over a decade. He has a Software Development degree from New York University and has created a dozen successful software applications for B2B purposes. Melissa relies on Paul’s technical expertise and ability to transform her vision into an easy-to-use platform.

Success Factors

All In One will be able to achieve success by offering the following competitive advantages:

• Helpful, knowledgeable, and efficient sales and customer support team that will be available 24/7 to answer customer questions, help troubleshoot any issues that arise, and record feedback to improve the platform.
• Full suite of solutions to manage all aspects of business operations in one user-friendly, streamlined platform.
• All In One is an intuitive smart SaaS platform that learns the more it’s utilized, so each user can have a personalized experience that works best for them.

Financial Highlights

All In One is seeking $250,000 in debt financing to launch its SaaS business. The funding will be dedicated towards UX design and other software development. Funding will also be dedicated towards office equipment, supplies, and materials. Additional funding will go towards three months of overhead costs to include payroll of the staff, rent of an office space, and outbound marketing costs. The breakout of the funding is below:

• UX design and software development: $100,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $120,000
• Marketing and Customer Acquisition Costs: $10,000
• Working capital: $10,000

The following graph below outlines the pro forma financial projections for All In One.

Company Overview

Who is all in one.

All In One is a newly established B2B SaaS company dedicated to helping businesses of all sizes achieve optimal efficiency in their operations through technology. All In One is based in Los Angeles, California, but will be available to companies across the United States. All In One will be the most reliable, user-friendly, and efficient choice for business owners of small-to-medium enterprises (SMEs) and large corporations in any industry. All In One will provide a comprehensive menu of SaaS solutions for any business owner to utilize. Their full-service approach includes a comprehensive set of sales and marketing, project management, human resources management, and customer relationship management solutions all in one easy-to-use platform.

All In One History

All In One is owned and operated by Melissa Johnson, a business strategist with more than fifteen years of experience helping other businesses develop their operations and processes to optimize customer management, sales and marketing, and project flow. Melissa has garnered a positive reputation of helping companies become more profitable by using SaaS technologies to improve their efficiency. Melissa’s strategic skills and diligence have allowed her to develop a loyal client base.

Since incorporation, All In One has achieved the following milestones:

• Registered All In One, LLC to transact business in the state of California.
• Has a contract in place to lease a small office space.
• Reached out to numerous contacts to include former clients and business owners to begin getting beta users for the new platform.
• Began recruiting a small team of sales and marketing associates, customer support associates, an accountant/bookkeeper, and a technology officer.

All In One Services

Industry analysis.

The global SaaS industry is valued at an estimated $152B (USD). The market is expected to grow to $208B by the year 2023. According to Statista, there are over 15,000 SaaS companies in the U.S. The largest industry players include Adobe, Microsoft, and Salesforce.

SaaS is a major component of cloud computing. Businesses rely on SaaS for everything from video conferencing to sales and marketing automation and customer relationship management. As more companies grow to depend on these services, demand for SaaS offerings will continue to increase. Industry trends include an increased use of artificial intelligence, big data, and integrated cloud services.

The market is highly fragmented with many companies offering similar services. Industry operators can achieve a competitive advantage by developing recognizable and memorable branding and marketing campaigns, providing exceptional customer support, and offering value-add services in addition to the SaaS platform itself.

Customer Analysis

Demographic profile of target market, customer segmentation.

All In One will primarily target the following customer profiles:

• Small-to-medium enterprise (SME) business owners in any industry/sector.
• Corporate/enterprise businesses in any industry/sector.
• Business owners who are looking for a better SaaS platform than what they are currently using.
• Business owners who have never used Saas, but would like to get started to improve their operational performance.

Competitive Analysis

Direct and indirect competitors.

All In One will face competition from other saas businesses with similar business profiles. A description of each competitor company is below.

Get Customers: Sales and Marketing SaaS

Get Customers provides a SaaS platform catering to businesses of any size. The company’s main offering is for automated sales and marketing solutions, but they have recently branched out to offer more comprehensive services including human resource, customer relationship, and financial management tools. Based in Seattle, Washington, Get Customers offers its solutions to businesses and organizations across the United States.

Get Customers’ promise is to deliver a reliable SaaS solution, effective communication, honesty and integrity, and 24/7 availability of the customer support team. Get Customers’ team of experienced SaaS developers and business professionals assures the platform will allow the business operations of its clients to be run smoothly, freeing the business owners from day-to-day operational hassles.

Competitive SaaS Solutions

Competitive SaaS Solutions is a Los Angeles-based B2B SaaS company that provides outstanding business solutions for small business owners. Competitive SaaS Solutions takes the headache out of dealing with multiple SaaS platforms that are not always compatible. They provide comprehensive SaaS services in one place. SaaS solutions included in the platform are CRM, HR, PM, ERP, automated marketing, financial reporting, and video conferencing. The owners of Competitive SaaS Solutions are seasoned business owners and technology professionals so they understand how SaaS is best built, implemented, and managed.

Better Built SaaS

Better Built SaaS is a trusted B2B SaaS company that provides superior service to businesses of all sizes. They are able to provide a one-stop shop for business owners who are interested in optimizing their operational processes through automation. Better Built SaaS is able to serve new businesses and startups from the beginning and established corporations looking to improve their profit margins. They are also able to ease the stress of managers who are overwhelmed by the day to day hassles and complexities that come with running a business.

Their pricing structure is simple and straightforward. Better Built SaaS offers three pricing tiers for their services – the Basic Plan, the Premium Plan, and the Comprehensive Plan. Business owners can choose the plan that best suits their needs and change their plan at any time.

Competitive Advantage

All In One will be able to offer the following advantages over their competition:

• Helpful, knowledgeable, and efficient customer support team that will be available 24/7 to answer customer questions and troubleshoot any issues that arise.
• An intuitive platform that works for any business size in any industry.
• Comprehensive solutions that can be customized to best fit each client’s needs.

Marketing Plan

Brand & value proposition.

All In One will offer the unique value proposition to its clientele:

Promotions Strategy

The promotions strategy for All In One is as follows:

Word of Mouth/Referrals

Melissa Johnson has built up an extensive list of contacts over the years by providing exceptional service and expertise to her clients. Many former clients have communicated to Melissa that they are interested in signing up for the new SaaS and are happy to help spread the word of All In One to their network. Additionally, All In One will use a customer referral program and provide existing clients with discounts for referring new clients.

Website/SEO Marketing

All In One will recruit an in-house marketing director to design and maintain its website. The website will be well organized, informative, and list all their services that All In One is able to provide. The website will also list customer support contact information, pricing plans, and demo videos.

The marketing director will also manage All In One’s website presence with SEO marketing tactics so that any time someone types in the Google or Bing search engine “B2B SaaS company” or “SaaS business solutions”, All In One will be listed at the top of the search results.

Social Media Marketing

All In One will use social media platforms including TikTok, YouTube, Twitter, Instagram, LinkedIn, and Facebook to promote the brand and attract customers. The company’s in-house marketing director will oversee the social media implementation.

Content Marketing

The company will use content marketing on its website and social media to help drive traffic and convert customers. Content will be high quality, informative, and keyword optimized.

The pricing of All In One will be moderate and on par with competitors so customers feel they receive value when purchasing their services.

Operations Plan

The following will be the operations plan for All In One.

Operation Functions:

• Melissa Johnson will be the Owner and CEO of the company. She will oversee all customer support staff and manage client relations. Melissa has spent the past year recruiting the following staff:
• Paul Smith – Chief Technology Officer who will provide all technical support for the platform.
• Bill Brown – Accountant/Bookkeeper who will provide all client accounting, tax payments, and monthly financial reporting.
• Kelly Jones – Marketing Manager who will work on all sales and marketing initiatives for All In One, including customer acquisition.

Milestones:

All In One will have the following milestones complete in the next six months.

8/1/2022 – Finalize contract to lease the office space.

8/15/2022 – Finalize personnel and staff employment contracts.

9/1/2022 – Complete software development of the platform.

9/15/2022 – Begin networking and outbound marketing efforts.

9/22/2022 – Begin moving into the office.

10/1/2022 – All In One opens for business and launches the beta platform.

Financial Plan

Key revenue & costs.

The revenue drivers for All In One are the SaaS subscription fees that will be charged to the clients for use of the SaaS platform and services. All In One will have a tiered subscription model with a basic, standard, and premium subscription options. In addition, the company will have customized service options for an additional fee.

The cost drivers will be the overhead costs required to maintain a SaaS platform and staff the office. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

All In One is seeking $250,000 in debt financing to launch its SaaS business. The funding will be dedicated towards UX design and other software development. Funding will also be dedicated towards office equipment, supplies, and materials. Additional funding will go towards three months of overhead costs to include payroll of the staff, rent of an office space, and marketing costs. The breakout of the funding is below:

• Marketing and customer acquisition costs: $10,000

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Average number of monthly subscriptions: 15
• Average fees per month: $50,000
• Office lease per year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, saas business plan faqs, what is a saas business plan.

A SaaS business plan is a plan to start and/or grow your SaaS business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your SaaS business plan using our SaaS Business Plan Template here .

What is the Main Type of Saas Business?

There are a number of different kinds of SaaS, some examples include: Horizontal SaaS and Vertical SaaS.

How Do You Get Funding for Your SaaS Business Plan?

SaaS are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.  This is true for a business plan for any Saas company, including a B2B Saas business plan.

A well crafted Saas business plan is essential for securing funding from any type of potential investor.

What are the Steps To Start a SaaS Business?

Starting a SaaS business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Write A Saas Business Plan - The first step in starting a business is to create a detailed Saas business plan that outlines all aspects of the venture. The business plan should include market research on the Saas industry and potential target market size, information on the services or products you will offer, marketing strategies, pricing details and a solid financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your Saas business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your Saas business is in compliance with local laws.

3. Register Your SaaS Business - Once you have chosen a legal structure, the next step is to register your Saas business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your SaaS business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where your saas business will be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary SaaS Equipment & Supplies - In order to start your SaaS business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your SaaS business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

• Digital Marketing

Starting a SaaS Business? Plans, Templates, & Models [Guide]

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Table of Contents

SaaS Marketing

SaaS is a hectic industry. It’s an ever-growing, straight-talking, constantly innovating world of solutions that help people and businesses do better, every day. That’s why we love it.

And if you’re an entrepreneur, you’ll also love the fact that it’s a market worth billions of dollars that is literally taking over the world.

Perhaps you have an idea for a SaaS product, and you’re looking for resources to help you put your ideas into action and get the wheels turning. It’s been a crazy year, but technology is still moving and you don’t want to get left behind.

We’ve put together some helpful SaaS business strategies, plans, and advice to help you with setting up your business and planning the scale-up journey.

Let’s get started.

Define: SaaS Business

SaaS (software as a service) products play an important role in our personal and professional lives.

It’s a market worth $105 billion in the US alone and it grows by 30% each year . If you’re an ambitious entrepreneur, that’s all you need to hear.

SaaS businesses stretch across all industries, from music to team management to healthcare, so you’ll find innovative software solutions in every specialized sector and niche.

So, how do we know something can be classed as software as a service?

SaaS is a software product that…

• Is accessed via an online platform or app
• Solves a particular problem
• Targets a particular group of people
• Uses a subscription model

We have cloud computing to thank for the evolution of SaaS businesses.

It’s a simple concept nowadays – software is stored and maintained in the cloud, and businesses pay for access to this software.

But it’s taken some serious technological advancement to get here, a point where high-performance software is readily available to anyone with an internet connection.

I’ve got a simple (maybe too simple) analogy for explaining SaaS businesses compared to other, older, methods of software use. You can use it when your parents ask you why you’re moving out of their cup noodle-littered basement and into your super yacht.

Let’s say you want a pizza. Because let’s be honest, everyone wants a pizza, all of the time. I’m so hungry, man.

You have two options:

• Planting some wheat
• Picking up the phone

You could buy a farm. You plant all your crops and take care of all your livestock. You harvest the grains, store them, and grind them to make flour. Etcetera. You now have all the ingredients required to make a pizza – all from your own premises. This is like “On-Premise” software. It’s installed, stored, maintained, and run on-premises.

You could also call your local pizza place, order your favourite – Hawaiian, obviously – and enjoy a delicious pizza within half an hour. The quality is always good, you don’t have to know anything about yeast, and it’s pretty cheap.

This is SaaS. Fresh, hot, Hawaiian pizza, delivered to your device.

SaaS Vs. Legacy Systems

Businesses in every industry, if they weren’t already built with cloud-based software, are making the switch to SaaS from traditional legacy systems.

To your average business owner, particularly if they’re a boomer, legacy systems are what they’ve always known.

It’s a scary thing to learn that all data is now stored in ‘the cloud’, but they’re starting to realize that competitors are moving faster because they’re using more modern tools.

Take wealth management, for example. It’s an old industry and it’s often run by older people (who are very good at what they do and have decades of experience).

The thing is, a shocking amount of wealth management takes place using clunky, ancient legacy systems (I’m talking about the software, not the people).

Heck, billions of dollars in assets might be tracked using a mission-critical spreadsheet. Let’s say old wealth manager Joe presses the wrong button in Excel – beep boop, he’s lost his client’s data.

This is where SaaS businesses save the day. When presented with the pros and cons, it’s a no-brainer:

In every industry – banking, beauty, education, finance, music, travel – SaaS businesses are riding the wave of cloud computing to offer businesses (and consumers) a far more advanced tool that is much simpler to use and, critically, far cheaper to run.

So, Mr/Ms. Entrepreneur, what kind of SaaS are you going to sell?

What Is Your SaaS Business Going To Look Like?

When mapping out a SaaS strategy for your startup, there are some fundamental parameters that should be in place.

• Solving a specific problem
• Catering to an audience you know and respect
• Pricing that demonstrates value

Your SaaS product is only going to be valuable if it solves a real, tangible problem for people. A problem that is so crucial that the solution is an urgent requirement.

At the most basic level, your SaaS business should be selling a product that helps other businesses make money.

Then there’s the audience for your SaaS business. You’ll get the best results from targeting a group of people that you know very well and, most importantly, that you respect.

Why? Because, if you want to succeed, you’re going to have to talk to them. A lot.

Now, price is obviously an essential factor because that’s how you make a seamless transition from your current clunker to a golden lamborghini. But it’s also how people perceive the value of your product.

If your product is valuable enough, if it truly solves a problem and helps businesses make money, they’ll be willing to pay for it.

Creating Your SaaS Business Plan

Okay, so you’ve got the concept for your SaaS business, you might have even started to dabble in development.

But you’ve got to get investors on board. To do that, you need a clear SaaS business plan that’ll persuade even the meanest dragon in the den that your product is the one.

SaaS Startup Business Plan: Traditional Vs. Lean

When you approach creating a business plan, you’ve got two options:

• Traditional Business Plan
• Lean Business Plan

A traditional business plan is a full-scale, 40-odd page manifesto that covers the following essential aspects of your SaaS business.

By the end of it, you’ll have a very serious-looking document that’ll have you feeling like a very serious business person.

The thing is, this is quite an old school method of business planning that doesn’t suit the environment where SaaS thrives.

In this industry, the entire market will shift, new competitors will emerge, new technologies will be invented, all in the time it takes you to write a 50-page document to send to Peter Jones.

So how do SaaS businesses plan their growth strategy without pinning themselves down? A Lean business plan.

Why A Lean Business Plan Suits SaaS Businesses

You’ll still need to cover the essentials, but there’s more wiggle room around areas that are constantly changing in the SaaS world.

Lean SaaS Business Plan Template

As well as your SaaS business plan, you need to provide two things:

• Clear vision and goals
• Assurance of profitability

Showing clarity and decisiveness around your business goals not only gives your business direction and momentum but impresses potential investors who will share your confidence in your SaaS business.

Of course, confidence is all hot air without proof of profitability. Make sure you’ve defined a clear path to profit and know your numbers because that’s what it boils down to when gaining investors.

Understanding The SaaS Business Model

So, we’ve established that SaaS is not like other girls because it sits on the cloud and, instead of investing a ridiculous amount into on-premise tech, businesses pay a small fee to access the data on a subscription.

All the major hallmarks of selling a tech product go out the window with SaaS – no physical product, no end-user license, no infrastructure needed to host the software – just log in on a web browser and maybe an app download.

Therefore, the core business model of any SaaS business is recurring subscription fees.

One-off sales are no longer the goal, instead, the focus is on the lifetime value of a customer. There are a number of ways a SaaS business can grow to maximize revenue, such as up-selling, partnerships, and affiliate marketing, but the core moneymaker is the subscription.

This is where the value of your product is everything, and I’ll circle back to the essential ingredient – helping businesses make money.

Think of the top SaaS businesses out there right now: Salesforce, Monday, Zendesk

If your software product is valuable enough, a business will:

• Use it for vital business activity – from task management to CRM organization to selling products
• Start building processes around the program – so even if a competitor comes along, they’ll stick to what they’ve been using
• Become reliant on the service it provides
• Pay just about anything to continue using and benefitting from it

SaaS leaders have cracked this code – and you can too, but there are many challenges to overcome (and that’s if your product is decent).

The SaaS business model sounds relatively straightforward, but it comes with many challenges. Let’s go over them:

Yikes. No wonder 92% of SaaS startups fail . That super yacht looks so far away when you’re deep in the Valley of Death, running through the last of your capital, and desperately pitching to investors while sleeping on your friend’s couch.

Knowing Your SaaS Business Has Made It (Key Metrics)

So, how do you know if you’ve made it? What are the SaaS marketing metrics for success if you’re running a SaaS business?

Let’s run through them. You should know these figures off the top of your head when you’re approaching investors.

• Customer acquisition cost
• Monthly recurring revenue
• Average revenue per account
• Customer lifetime value
• Customer retention rate

Churn is the most powerful metric for measuring SaaS success.

Customers will inevitably unsubscribe, whether it’s because they’ve found a better solution, they can’t afford the subscription, or they simply no longer need your product.

To calculate churn for a specific period, simply divide the number of unsubscribed customers by the total number of customers.

If your churn rate is increasing each month, you know you’ve got a problem.

Customer Acquisition Cost (CAC)

This is a great indicator for profit.

Divide the total cost in marketing and sales by the number of acquired customers.

Monthly Recurring Revenue (MRR)

A simple way to predict incoming revenue so you know how you’re tracking, without taking into account fluctuations in churn and customer acquisition. Multiply the number of customers by the average revenue each month.

Average Revenue Per Account (ARPA)

The average revenue acquired from one client each month or year. Calculated by dividing the total MRR by the number of customers.

Customer Lifetime Value (CLV)

This one’s a bit more complicated, but it’s one of the most important SaaS business metrics to track. It represents the average amount of revenue you can squeeze out of customers for the amount of time they stay with your company. Multiply the average revenue per account by the percentage gross margin, then divide it by the average churn rate.

Customer Retention Rate (CRR)

This just shows how many customers have stuck to using your software over time, proving the success of your marketing efforts and the value of your product. Divide the number of customers currently using the software by the total number of customers at the start of the specific time period, then multiple by one hundred to get the percentage.

The Marketing Approach To SaaS

You’ve developed your SaaS business plan, you know it like Chewbacca knows the Millennium Falcon, and you’re ready to send that sh*t into hyperspace.

SaaS growth is serious business. Every SaaS company navigates it differently, but it tends to look like the following stages:

When it comes to growing your SaaS business, you need a killer SaaS go-to marketing strategy.

This is obviously our area of expertise, so we’ll share our top SaaS marketing strategies and show you how to tackle the challenge of attracting customers with marketing.

Build Your Audience First

To truly master SaaS marketing, you should be thinking about it right at the start of your startup journey.

Before you start perfecting and developing your MVP, we highly recommend you start investing in your marketing essentials, including:

• Social media profiles
• Email marketing campaigns
• Product demonstrations

We’re not suggesting you invest in an inbound marketing agency right at the start, that wouldn’t be wise at all, you need that early capital.

But simply investing time and some resource into your marketing essentials, particularly your website, helps you build your audience alongside product development.

This helps you achieve a number of things:

• Test your USP
• Increase awareness of audience pain points
• Establish a relationship with your ideal customers
• Develop your brand voice
• Build anticipation for your product launch

By keeping marketing in mind from day dot, you save yourself from crafting an entire brand personality at a time where your product is ready and marketing should just plug and play to get the results you want.

It might mean doing a fair amount yourself, from writing the odd blog to posting on LinkedIn and setting up a mailing list.

For example, this fintech startup has been publishing high-quality blog content on its beautiful website since way before they started scaling up this year.

This means that, by the time they hit the hyper-growth phase and customer acquisition skyrockets, they’ve got a goldmine of epic content ready to make sure none of that organic traffic goes to waste.

Outbound vs. Inbound SaaS Marketing

Okay, so you’ve figured out how to start a SaaS business. You’ve got your MVP ready to go, some investors on board, and it’s time to start building an online presence to attract customers.

You know this means marketing, and you know that costs money, but you’re unsure how to best use allocate your funds to maximize results. The last thing you want to do is throw all your marketing spend at an ineffective campaign.

When it comes to B2B SaaS marketing, you’ve got two methods:

• Outbound marketing
• Inbound marketing

Outbound marketing uses tactics that directly target your audience, reaches into their day to day world, and initiates a conversation.

Traditional forms of outbound marketing involve radio ads, infomercials and those insidious cold calls at dinner time that provoked your Dad to swear in your presence for the first time.

Today, outbound marketing is all about social media and Google Ads. Companies pay to have their content displayed in front of users who Google, Instagram, LinkedIn, or Facebook recognize as belonging to their target audience.

Outbound marketing had a bad reputation for being manipulative and too in-your-face, which says a lot about a society that is sick to death of looking at advertisements. I mean, 81% of people will close their browser due to a pop-up ad.

But outbound marketing can be useful for businesses, particularly startups who need some traction with their online presence. It’s a useful way to track ROI – you pay a certain fee and get a certain amount of engagements.

Then there’s inbound marketing. Inbound marketing tactics are subtle – where outbound deals in flashy fonts, inbound provides education, subtlety, and value.

Rather than selling your SaaS product outright, inbound marketing educates your audience about the product and topics relating to it – how it works, how it solves a problem they face, what they can achieve with it, why it’s better than other products, why they should care about it.

Rather than persuading people to ‘buy now’, inbound marketing methods seek to gently steer your audience towards your product and showcase it’s value – with the goal that they’ll know where to find you when they need the product.

The most powerful form of inbound marketing is SaaS content marketing – words that work wonders for your business.

Inbound marketing is highly valuable to B2B SaaS for numerous reasons:

• SaaS products require more explanation for people to understand their value
• B2B customers take longer to make decisions so need more to read
• B2B decisions require discussion so need well-researched content
• SaaS relies on recurring revenue so customers need consistent value from content

There are many SaaS inbound marketing examples out there, all of which demonstrate the long term ROI that comes from building a goldmine of valuable content for your audience.

What’s more, SaaS inbound marketing is far more strategic. Different tactics and types of content can be engaged to guide leads down the marketing funnel to the point where they make the decision to purchase.

The SaaS Marketing Funnel

In every B2B SaaS marketing and lead generation guide , you’ll learn about the marketing funnel.

Basically, the funnel maps out every stage in a buyer’s journey from just noticing your product, to buying it and raving about it.

At its most basic level, the B2B SaaS marketing funnel has three stages:

• Consideration

By taking the time and using your knowledge of your customer persona, buyer journey, and your product, you can create an inbound marketing strategy that leverages the right content to attract customers at each stage of the marketing funnel.

With a future-proof inbound marketing strategy and a team of SaaS marketing experts by your side, your scale-up journey can be supported by high-value content that takes care of new leads and turns them into sales.

Conclusion: Let’s Get Down To Business

Let’s face it, inbound marketing is a serious long-term investment. To build a goldmine of content to nurture your leads, you’re gonna need a serious amount of high-quality blogs, case studies, landing pages, and videos.

If you’re an entrepreneur who’s just figuring out how to start a SaaS business, you likely won’t be able to hire an inbound marketing agency for a little while.

But that doesn’t mean we can’t help out. We want to support entrepreneurs looking to take SaaS further with solutions that’ll shape the world we live in tomorrow.

That sounded pretty cheesy, but we mean it. If you’re putting together inbound marketing strategies for your SaaS startup, let’s talk .

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Chris Onyett

Chris is one of the managing partners at Roketto. His area of expertise is digital marketing and loves sharing and educating on topics like Google Ads, CPC bidding tactics, Google Analytics, and marketing automation. When Chris isn't in the office, he enjoys playing volleyball, mountain biking, and hiking with his American Eskimo.

6 Proven Content Marketing Services for Rapid Organic Growth

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Creating a Foolproof SaaS Business Plan w/ Examples

Did you know that having a business plan creates a 30% greater chance of growth ?

A strong business plan is the foundation of success for businesses. But if you have a SaaS, a business plan is even more crucial to attract potential investors that you’ll need for growth. 

Here at FounderPath , we know the importance of a robust business plan for SaaS companies. Keep reading below to find out why a business plan is crucial, what you need to consider and how to put one together.  

What is a SaaS business plan?

A business plan gives an overview of your business. It covers where your business is currently, where it’s projected to go and how you’re going to get there. A business plan details your business strategy, marketing plans, customer acquisition tactics and more.

If you’re venturing into SaaS, your business plan needs to be specific to the industry you are tackling and it must cover the sections featured in this article. SaaS is continuously online, which may affect how you plan your business. You need to consider how the online landscape changes in a way that other businesses don’t. 

Why a SaaS business plan is important

There are plenty of reasons why a business plan is crucial for your business and potential investors down the line.. Let’s take a look at some of them now. 

A business plan stops you from floundering and keeps you focused and on track. It helps you make confident decisions in line with your goals, identify any potential weaknesses and have a strong reference when you talk to potential stakeholders. A good SaaS business plan will provide: 

• A roadmap for the success of your business, including your financial and marketing processes
• Evaluation of your company’s status and growth over a specific timeframe
• Details on what customer problem you’re trying to solve
• Solutions to SaaS specific problems, such as scaling growth, data capacity, storage and customer support

For investors

SaaS investors or quick cash lenders, like FounderPath , need to know what they’re putting their money behind and when they’ll see a sizable return. A business plan shows them that their money is in safe hands. It does this by: 

• Explaining why your SaaS business will succeed
• Highlighting your businesses’ advantages over your competitors
• Giving an overview of your financial plans and records
• Demonstrating how you’ll attract new customers with your marketing strategies

Some things to consider in your SaaS business plan

Target audience.

You need to know who your target audience is in order to reach them properly. Your product is trying to solve a problem that your target audience has. Without understanding what their problem is, you won’t be 100% sure that your company can aid them.

Competitor research

To understand how your product stands out, look at where your competitors are failing. What are their customers saying about them? Look at websites like Capterra to find your competitor’s weak points and how you can do it better .

Your USP and positioning

With 73% of organizations using SaaS products, you need to know what gives your product the edge over its competitors. This is how you’ll position yourself in the market. 

For example, there are plenty of video editing platforms out there, but VEED’s focus on ease of use and simplicity helped them target users who were looking for a simpler alternative to the overly complex video editing platforms such as Adobe Premiere Pro. This eventually led to a $35 million investment from Sequoia .

Acquisition and retention

The success of a SaaS business largely depends on how well you can scale your customer acquisition and retention process. 

Assessing product-market fit

You need to provide a way to indicate that you will be actively assessing your product-market fit, or, in other words, the viability of your platform to exist and grow as a business. 

This includes measuring key metrics that show a clear indication of your trajectory, finding ways to collect user feedback, and developing a roadmap based on what your (potential) users want.

The financial side

With most startups, you’ll need a sizable chunk of change to start you off. You need to consider whether you’re going to try and attract investors or use a short-term lender like FounderPath . FounderPath looks at your current business performance, scores it and lends you money with terms related to this performance. It’s a great option for those looking for a quick cash injection. 

In your plan, you’ll need to break down how much you’re projected to make and how you’re going to reach that goal, so investors have no doubts about backing your project. 

How to write your SaaS business plan

Executive summary.

The executive summary shouldn’t be longer than 2 pages. Keep it concise and to the point by answering the following questions.

• What problem do you aim to solve?
• How are you going to do that?
• Who makes up your team?
• Do you have any current interests?
• What are you asking for? Is it investments, a government grant, or something else?

The Problem

Why did you start your business? Some of the best businesses are solving problems customers didn’t even know they had. Here, you need to cover 2-3 main problems your ideal customer is facing and why it’s a major problem for them. 

For example, in AirBnb’s pitch deck, the problem it was trying to solve is clear : to provide a more affordable and authentic alternative to booking hotels . 

The Solution

This section should focus on the benefits for the customers. Continuing the Airbnb example, their users would no longer have to pay ridiculous hotel prices or settle for somewhere that wasn’t up to standard. And homeowners or those with an extra room could make extra money on the side. 

Cancel out the pain points listed in your “problem” section and really highlight those customer benefits. 

Market Opportunity

Here, you need to state how big the market you can address and how fast the market is growing. It’s important to cite facts and figures, so investors can clearly see a revenue projection over time. 

Competitive Landscape

This section is where you define your market and how it’s made up. Do 2 or 3 large companies dominate nearly 85% of the market? If so, how are you going to position yourself to take over?

Try creating a product comparison table to show what you do differently. Clearly highlight the differences and similarities based on features and show how you solve a problem the others don’t. You can even demonstrate problems your competitors are causing for customers and how you’ll solve them. Here is an example from Cheddar on enterprise-targeted marketing automation SaaS platforms:

Business model

What will your business model look like? There are three main business models for SaaS companies that you can follow. 

• Subscriptions . With this model, companies charge their users a regular monthly or annual fee to use their service. Companies like Canva, Spotify or Grammarly use this model. Each month or year, you’ll have guaranteed income from recurring customers and the chance to grow with new ones .
• Ads and featured listings. Online marketplaces like Etsy, eBay and Amazon use this model. Think about the last time you scrolled through social media or searched for a particular product online. Chances are you’ll have seen a paid ad placement for one of these sites featuring something you’re looking for. 
• Commission model . This is when the SaaS company splits its revenue with its partners. For example, Uber offers a 75% cut to its drivers while the company keeps 25%. If a company’s users are doing well, so will they. And it gives users incentives to use the platforms as they’ll be getting a cut of the profits. 

Marketing Strategy

How are you going to get your customers to notice you? When devising the marketing strategy, do keep in mind to include:

• Your distribution channels. SEO, email, social media, cold emailing, etc.
• How you will get your first clients . Examples include offering your product for free to get user feedback, trial and demos, etc.
• The timeline . How long would you need to get things running?
• Budget . How much would you need to execute your strategy?
• Your key performance indicators . Focus on essential ones, such as recurring revenue, churn and retention rate, month-on-month growth.
• Marketing tools you’ll use (optional). Obvious ones include Stripe, Mailchimp, etc.

Measuring your marketing strategy and its effectiveness is crucial to the success of your business. With Founderpath’s customer metrics tool, you’ll be able to calculate whether your strategies are pulling in new customers.You can even see how much you’re spending in order to acquire new customers. 

This section explains where you’re going and how your product is going to evolve. Investors are interested in your product’s future, and more importantly, whether or not it has one. How are you going to stay relevant to customers? How will you adapt to changes in the market?

You can be as detailed and forward-thinking as you like in this section. 

Financial Plan

Some common figures you can include in this section are:

• Monthly recurring revenue
• Average customer value
• Customer lifetime value
• Customer acquisition costs

Your financial plan is one of your most crucial sections and should include a lot of detail. Include here what type of funding you’re looking for. 

FouderPath raised over $145 million for SaaS companies to use to grow their businesses in 2022. Borrowers retain 100% of their company and can track everything through their FounderPath dashboard. 

The takeaway

A SaaS business plan is crucial for your development as a company. It keeps you on track and focused and drives out wasteful activities. 

There are several things to consider in your business plan, including marketing strategies, research and a financial plan.  For more help with finances, consider a SaaS-specified lender, like FounderPath. Contact them today to find out how they can help your business grow.

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Advice for SaaS founders heading into 2023

Starting A SaaS Business: A Guide to Plans, Templates, and Models

• RocketHub Team
• November 12, 2021

Are you starting a SaaS Business? Did you know that people in the SaaS industry are the only ones who are always looking for new innovative ideas? They strive and pour their hearts out to make a good product into the best. Lucky for them, the road to success is paved with lots of money! It makes all the blood, sweat, and tears are 100% worth it at the end of the day.

If you’re just testing the water in the SaaS industry or planning to launch SaaS in the near future, then you are landing on the right page! We will be tackling all the nitty-gritty things anyone should know when starting a SaaS business. Take this as your trusted guide and let’s get started!

Creating Your SaaS Business Plan

SaaS is still a relatively niched industry where a lot of money can be made. The SaaS market is growing rapidly and we can just see how advanced and ambitious it can be. You might think that it’s a saturated market because there are plenty of SaaS products out there. However, most of them still need improvements in the healthy competition inside the niche. That is why you need to have an innovative idea and go ahead with it! There’s still enough fish in the water for you too!

Nowadays, if you have a good product, the market size you can jump into can be huge. Due to the high level of digitalization, the entire world is experiencing a strong need for SaaS products. There are various sectors such as education, marketing, or healthcare that use SaaS products to be more efficient and discoverable.

But wait , getting into the SaaS business isn’t as easy as opening a coffee shop!

Zero is your business plan. While it sounds very fancy and pretentious, this step is vital and shouldn’t be missed. A business plan is basically a business strategy. A guide with goals and processes that will help your product become successful over a certain period of time. You can actually browse to find a business plan template or tutorial in seconds – thanks to the almighty internet! However, if that doesn’t work for you, hiring someone with experience would be a great help.

Why a Lean Business Plan Suits SaaS Business

While you’re trying to realistically map out your business plan, make sure to include several essential things below:

• What problem your product is solving?
• Who will buy your product?
• What type of pricing will work best?

Those three questions above will help you to set up a clear goal for your SaaS to survive the startup phase as well as be profitable at the same time and make your business grow. Make sure that you really understand these things before you embark on the journey.

The question about your target customers is highly important because it will help you find the right pricing for your product. Decide how you’re going to start selling the product to – will it be regular customers (B2C) or will it be other businesses (B2B)? When you’re selling to a regular customer, the price will definitely be different than when you’re selling to a business or company.

A lean business plan will outline the functions and main benefits of your product, the USP, the pricing model, and even your estimated revenue. This is why your business plan should clearly state the visions, goals, and profits you are estimating to make over a certain period of time.

A business plan will help you to stay on track and also attract investors and partners that would be translated as… MONEY! While some investors will demand to see more than just a plan and some numbers, having the confidence and the right process beforehand will significantly help you to achieve your goals.

Understanding The SaaS Business Model

By now you’ve probably figured out the difference between the SaaS industry and any other business you’ve ever seen before. The product, infrastructure, pricing, and even the business model for SaaS are different. It’s a different world with different rules.

Everyone knows that in this industry the core of any business model is recurring users aka subscribers. That is the main strategy all SaaS products go by because it’s highly effective. One-off sales are not sustainable, because, for each product, there is a limited amount of people that will buy, therefore you want them to keep buying the subscription for months on end as you expand your audience.

Another thing worth mentioning is the fact that your product needs to be at least decent if not great in order to have monthly subscribers and grow. Whether it’s used by other businesses regularly, or simply filling a need in the market, the product has to entice the user to pay almost any fee just to use it.

The giants in the SaaS industry can give some good advice about how to succeed, and it sounds a little like this:

• Invest in developers and marketing from the beginning – if you want customer retention
• Early profits should be reinvested in the company in order to scale it
• Explain the value of your product with the help of your USP

Given this advice, no wonder that so many startups fail in their first year of existence – it’s definitely not an easy job!

SaaS Business Key Metrics

Metrics are a key part of any successful story just like in any other business. It’s a kind of data that has a lot of insights to help you make the right decision in reaching your goals. If you don’t know what metrics to follow, no worries – we got you covered! Here are the main key metrics that you and your team should focus on.

Have you ever heard about churn? It’s a valuable and powerful metric that everyone in the SaaS industry religiously follows. Churn rate is the rate at which customers stop doing business with you. In a way, it’s the rate at which people unsubscribe or stop using your SaaS product or service.

We all know that customer loyalty is hard on everyone no matter what you do – they just won’t stay with you forever. Sadly, you have very limited actions to take in order to stop the customer to go away.

Calculate your churn rate by dividing the number of subscribers in a month by the total number of customers. Keeping track of your churn rate each month can help you make certain business decisions or detect fluctuations in the rate.

Customer Acquisition Cost (CAC)

CAC is a great indicator of your profit because most of these metrics go hand in hand with your marketing efforts and costs. We are all aware that you need to spend money to acquire new customers and ideally the costs get lower and lower with time.

In order to find out what your CAC is, do this simple math: divide the total cost you spend on marketing and sales by the number of acquired customers over a certain period of time which is usually by month.

Monthly Recurring Revenue (MRR)

Most metrics give you financial insights, but nothing like your MRR. This metric is telling precisely how much money you’re making each month, and that is something any business manager should know by heart. This metric can be calculated by multiplying the number of customers by the average revenue each month. 

Of course, like anything in this world, this metric can fluctuate due to churn rates and customer acquisition costs. Following MRR you can predict growth rates and persuade investors to join you.

Average Revenue Per Account (ARPA)

Another key insight into your financial status is ARPA or average revenue per account. It’s a long name but you’ll want to monitor this one closely each month.

What ARPA does is tell you the average revenue acquired from one client each month or the year. You can see the amount by dividing the total MRR by the number of customers. Easy as that!

Customer Lifetime Value (CLV)

All metrics are important, but some are more crucial and relevant than others. For instance, CLV or customer lifetime value gives you precious information about just how much revenue one single customer can bring you. In SaaS, users come and go on the regular, so by following this metric and CAC you’ll know how much money you’re spending to get new customers and how much money each of those customers brings you. 

If CLV is lower than CAC, then you have a big problem. CLV is calculated by multiplying the average revenue per account by the percentage gross margin, then you divide it by the average churn rate. It’s easy math you can do in Excel or use a 3rd party app.

Customer Retention Rate (CRR)

This one is about those loyal customers that have stuck with you over time, those who pay the subscription every month. If this metric is stable or increasing each month, you can pat yourself and your marketing team over the back for doing a great job. It’s important to know how many new customers come and go each month, but also how many stay with you. 

Since it’s a percentage you can calculate it by dividing the number of customers currently using your product or service by the total number of customers at the start of the specific time period. Then, multiply by one hundred to get the percentage.

The Marketing Approach to SaaS

Navigating the waters of SaaS growth can be tough and oftentimes overwhelming, but if it wasn’t also fun and exciting nobody would do it, right? From the startup stage to the stable one it can take some long years, but if you have a good marketing strategy and a steady business plan you can do it. 

Since we live in such a digital area, marketing is really something you don’t want to be frugal about. It might seem like a big investment, but with any business, you need to have a long-term vision. Needless to say that since you sell a product that will be used on a digital device, such as a smartphone or computer, you cannot miss out on online marketing and ads. People spend a lot of time on their devices, and if you target them with smart ads and good copy they will come and check you out.

If you’re wondering what marketing efforts to include in your strategy try building your audience, decide if you need to invest in inbound or outbound marketing, and invest in your marketing funnel. We’ll elaborate on each one of these elements, so you can better understand why they’re so important. 

Build Your Audience First

No matter what type of business you run, but especially the SaaS ones, you need to focus a lot on building the audience. To do this you’ll need to invest some time and money into your website and blog, your social media channels, your product demos, and email marketing campaigns. 

It might seem like a lot, but all these elements will draw your ideal client and convert them into customers. And the best part is that you can build your audience without damaging your budget or hiring a marketing agency. 

Out of the things we mentioned, a good website is one of the most important, because it’s the final step of each conversion. Whether you’re advertising on social media, sending emails, or posting a blog article, everyone will end up there, and it needs to be perfect. Steady daily efforts, along with data will help you get there.

Most SaaS companies spend a lot of time creating content for their blogs. Optimized blog articles can bring in thousands if not millions of users, and some of those users will be curious to know more about your product. It’s a very common SaaS growth strategy .

Spend Your Money Wisely

You want to grow and scale your business, but you don’t really know or you’re not sure how to get the best bang for your buck. A 5:1 ratio is usually a good ROI, but the question still stands, what marketing efforts are suited for you?

Inbound marketing or outbound marketing? Let’s see. 

Traditional outbound marketing includes radio ads, commercials, and whatever way of interrupting someone’s activity in order to start a conversation about your product you can think of. Nowadays outbound marketing includes paid and organic social media content, in the form of Google Ads, Facebook Ads, or feed posts. 

The goal with outbound marketing is to grab people’s attention, make them curious and make brand awareness. For any business, these tools are very useful and can help you better understand your audience.

There is also inbound marketing which includes blog articles, other forms of content, and email marketing. They help you educate your audience and showcase just how much they need your product in their lives because it solves a problem. It’s a less aggressive approach that needs more time to show results. People who buy SaaS products need more time to finalize the purchase, and in that time you have to provide them with all the resources to convince them. Only after they’ve done some serious research and thinking will they be ready to buy.

The SaaS Marketing Funnel

As you make your way into the SaaS world of marketing and lead generation, you’ll hear people talk about the marketing funnel. To make it easier for you to understand, a marketing funnel is a process that maps out every step of a customer’s journey from getting to know your brand to purchasing the product. It’s theoretically shaped like a funnel because you start with a broad audience that gets acquiesced with your product, but only a few of those end up purchasing it. 

You don’t need to be an expert to create a marketing funnel but it sure helps to know what you’re doing. One of the most important things everyone needs to know about funnels is that you need to know who your customers are, what they like, and what their problems are. Only then you can create a good funnel and attract them.

The basic structure of any funnel has 3 stages: Awareness, Consideration, and Decision. And if you create the right strategy and content for each stage of the funnel you can significantly increase your revenue over time.

Hopefully, this article gave you a little insight into how it’s like and what it takes to start a SaaS business these days. It’s not an easy job, but someone’s gotta do it. Remember that the hardest part of any project or business is to start.

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How to Start a Successful SaaS Company

Candice Landau

33 min. read

Updated March 19, 2024

Free Download:  Sample SaaS Business Plan Template

If you’re interested in starting a software as a service (SaaS) business, you’ll want to start by outlining your needs. If you’re unsure of what you’ll need to launch and want an idea of what entrepreneurs in this industry do, then you’re in the right place.

I interviewed SaaS entrepreneurs from all over the world, including our own COO Noah Parsons, who has been a key figure in the making of LivePlan, our own SaaS product. With these insights we’ll dive into 10 steps you’ll need to take to plan, launch, and grow a successful SaaS company. 

• What is a software as a service company?

Let’s start by defining what exactly a SaaS company is. SaaS (software as a service) means that users access the software through their internet browser or a web-based app. The software maker hosts their product on their own servers, which is why SaaS products are sometimes referred to as a “hosted solution” or “web-based solution.”

It’s also common to hear SaaS products talked about as “cloud-based” solutions. In contrast, a desktop-based model is where an individual or company would install software on their computers and run it on their own servers. For your own business, you’ll need to be able to quickly explain this general benefit and elevate it with the value proposition of your specific solution.

• Can you start a SaaS company without technical expertise?

If you have an idea for a software as a service business, but you don’t have the technical expertise to build your app yourself, it’s still possible to run a successful business. In his book “ Lost and Founder ,” Rand Fishkin talks about his journey as a non-technical CEO of Moz, a service company he founded and transformed into a SaaS company.

He emphasizes how important it was for him to learn (and keep learning) enough about the technical aspects of his business so that he was able to make good hires and understand technical roadblocks when they surfaced. And it’s not completely impossible to learn to code yourself — but it does take time.

Be mindful of your intellectual property — the code — whether you bring on an employee or outsource the technical work. A good contract can go a long way.

• 10 steps to start a software as a service company

1. Develop a solution for a problem

Before diving into pricing, branding, or building a team, it’s important to make sure you have a clear problem to address and a solution that alleviates it. After all, if you’re not solving a problem, you don’t have a business. 

There are different ways to go about finding a problem worth solving. Here’s what others have to say:

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“If you can fix a problem for someone and do it better, quicker, and/or cheaper than your competitor, you’re off to a good start.” — Gabriel Kuperman, founder, and CEO of CuePin.

Solve a problem you can relate to

“The number one rule for any SaaS business should be to solve your own, real problems and not someone else’s problems. Only by solving a problem, you have struggled with yourself will you fully appreciate how to solve the problem in the best possible way.” — Uwe Dreissigacker, founder and CEO of InvoiceBerry.

Use your knowledge of an industry to solve a problem

“I had industry experience and knew that there was a big void to be filled for small and medium-sized businesses that could not afford to pay for local servers and an IT team. We created UpKeep to fill this void—a cloud-based solution that was affordable for any size business.” — Ryan Chan, founder of UpKeep.

2. Write up a lean plan

There’s no way to get around it, you’ll need a business plan. But instead of sitting down to write a 40-page plan, start with a one-page pitch.

It’s the fastest way to get your idea onto paper, and it’s the very first step in the lean planning process, which is much easier and more iterative than traditional planning methods. It’s also more suitable for SaaS businesses that are constantly testing new ideas.

Your pitch is going to roughly cover your strategy (what you’re going to do), your tactics (how you’re going to do it), your business model (how you will make money), and your schedule (who is doing what and when).

If you’d prefer to work through the lean plan on your own, you can either use our free business pitch template or read our guide on how to build your pitch. Regardless of the method you choose, here’s what you’ll want to cover:

In the strategy section you will want to include:

• A one or two-line description of your business— your unique value proposition.
• A description of the problem you’re solving for your customers, and your solution to the problem, which is usually your product or service.
• A description of your target market or the different market segments you’re targeting.
• Your competition, and a brief description of how you differ from them.

In the tactics section, list your sales channels and describe how you will be selling your products. You’ll also want to list out marketing activities that will drive customers to your door. List key partners and resources you will need, and then list your core team as well as their roles. If you don’t yet have a team yet, list the roles you need to hire for.

The business model

While it’s useful to be able to have a sales forecast and expense budget early on, it’s not something you need until you’ve validated your idea. At this stage, simply list what you think your primary revenue streams and your key expenses are. Later you will want to come back and create a proper sales forecast, cash flow forecast, and expense budget. In this section, you really just want to document how your business will make money.

In this section, you’re going to outline your action plan for moving forward with building your business. Your action plan will include a schedule of tasks or milestones . These will be mapped onto dates, responsibilities, and budgets so that you hold yourself accountable. Given the iterative nature of planning a business, you will likely come back to your action plan and add more steps as you go.

Once you’ve got your ideas in one place and a clearly defined problem and solution, you’re ready to move on to phase three—validating your idea.

3. Validate your SaaS idea

Now you’ve spent some time creating your lean plan, which is essentially a list of assumptions. In this step, you’re going to find out whether those assumptions are true or false. And then adjust your plan so that it addresses what you’ve learned. 

You’ll do this by attempting to answer the following question — Can my idea make money?

Instead of rushing headlong into your first and favorite idea, this step acts as a check. It will help you determine whether or not you have a good idea that can be turned into a viable business.

Talk to your customers

The best way to do this is to get out and talk to your potential customers.

One of the biggest mistakes companies make is doing mostly secondary market research, instead of primary research (getting out of the building to talk to people face-to-face). But here’s the thing, you can also do this digitally and get similar feedback. It can be as easy as launching a coming soon website , running search ads or even launching a kickstarter to see if you gain any traction.

The important thing is that you are getting real-world feedback and setting parameters for success to determine if your idea has merit.

Gene Caballero, co-founder of GreenPal, validated his idea by getting out and speaking with random people. “We went door to door and even rented a kiosk in the mall to get feedback to see if people would use a product like ours. It’s a very humbling process.”

Through talking to people in real life, you want to learn:

• Have I identified a problem they actually have?
• Do I have a solution that solves their problem, whatever it is?
• What is the best way to sell to them, and what’s the worst way to sell to them?
• What would they pay for my product or service? Have I priced it too low or too high?
• What products do they currently use to solve their problem?

Based on what you learn, you may find you need to go back to your lean plan and revise it or refine it. You may even need to consider another idea if you find there’s no real market for your initial idea.

Conduct a competitive analysis

Beyond knowing your customers really well, it’s also important to know your competitors. The presence of competitors in your market is actually a good thing. It means a problem has in fact been identified. The trick then is figuring out what part of your competitors’ solution is inadequate. What do customers want that they don’t currently get?

Noah Parsons, COO of Palo Alto Software, says, “LivePlan’s competition is often Word and Excel. We know that Word and Excel are time-consuming, error-prone, and offer no help and resources. Our solution, an automated business planning tool, helps eliminate those pains for customers.”

Keep in mind that your competitors may not be immediately obvious. The industry your entering may simply have very disparate companies currently providing services. Be sure that you take the time to explore and understand how customers and competitors solve the problem you’re addressing and look for a way in from there.

Create your minimum viable product

Another great, and somewhat necessary testing method in the SaaS space, is creating a minimum viable product or MVP. This is the simplest version of your product.

It’s a particularly popular strategy in the world of product development and is used to quickly and quantitatively test a product or a product feature. Eric Ries, a Silicon Valley entrepreneur and author of The Lean Startup, popularized this strategy for web applications.

Eric says, “The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

If you can get an early prototype built, all the better. If you don’t yet have the resources to do so, you can still create an MVP.

Noah Parsons says, “Start with cheap mockups, wireframes, or even sketches on paper to make sure that your customers are going to want what you build.”

Besides software prototypes, MVPs come in many flavors, including:

• Explainer videos
• Landing pages

An MVP is a great way to save time and money before you go ahead and build anything, so take the time to make one and run it by your potential customers.

4. Explore pricing models and initial customer acquisition

SaaS products often use a subscription-based pricing model. So instead of paying once for a lifetime of use, your customer pays on an ongoing basis — usually monthly or annually. You can think of it as a software license.

It’s a popular model because of the increased potential lifetime value of each customer. Instead of a flat lifetime value — like $120 for the single sale opportunity you have with each customer or user, you might charge $10 a month per user for as long as your customer uses your service. The longer they stick around, the higher their lifetime value.

You likely spent some time modeling different subscription-based sales forecast scenarios during the creation of your lean plan. It hopefully gave you a rough idea of how reducing churn (the number of canceled subscribers) and other variables can affect your path to profitability. But now it’s time to officially establish a pricing model.

Test to find the right price

Growing SaaS companies are always testing their pricing models. You need to be willing to shift your pricing to fit what your customers are willing to pay. And in a crowded industry, you’ll likely need to be ok with offering your services, even if they’re better, for far less when starting out.

If you’re not sure where to start with your pricing, start with your competition. For Uwe Dreissigacker, founder and CEO of InvoiceBerry, looking into the competition was a good way to figure out how to price the company’s services. “Once you identified your competitors you can determine the lowest, highest, and average price your competitors charge for their services in order to determine a good starting point for your pricing.”

Your pricing model should be something you’re considering and testing during the validation phase, but you may need to treat that element of testing separately. A separate strategy, separate customer acquisition funnel, and separate goals you’re hoping to accomplish. Now there are a lot of different ways to get customers in the door to kick the tires, from offering free trials, to freemium services with upgrade options. You can check out the Bplans guide to SaaS pricing models for more on how to get started.

5. Establish your brand

If you’re looking to stand out in an already-crowded marketplace or simply be a memorable company, figuring out how to brand and differentiate yourself is key. You may want to pull from the competitor research you did above to help position yourself.

This isn’t a process you have to outsource to a brand agency — it’s one that can begin in-house. In fact, we’ve got a hands-on guide to building a brand right here on Bplans. You can also leverage tools like Canva to workshop designs, brand colors, and logos with little to no design knowledge. But before you start putting together mockups, here are a few branding elements you’ll need to consider. 

Brand to stand out

For UpKeep founder Ryan Chan, spending some time on the branding process helped set his company apart from the competition. “There are a lot of competitors in this space, many with much more money than us. However, we have been able to differentiate [ourselves] and also excel by making enterprise software fun and enjoyable. Our biggest differentiator has really been our design, from the ease of use to our playful tone.”

If you want to learn more about how to develop your own unique tone of voice, check out this article by branding expert Elicia Putnam.

Brand to clarify your vision

Branding isn’t only a design-oriented initiative. In fact, it can be used to get everyone on board and ensure messaging is consistent. GreenPal co-founder Gene Caballero says it’s a great way to get buy-in from partners, “In our case, we had to make sure that our vendors knew our vision and that we had a plan to execute.”

If you’re working closely with partners who are helping you distribute your product, it’s especially important to make sure they understand who you are, how you speak, and who you serve. If you don’t have a brand guide , it may be worth putting one together. This will make mixed messaging much less likely, and make it that much easier for your partners to help you spread your message.

The importance of a domain name

For Gabriel Kuperman, founder and CEO of CuePin, finding a good domain name was a key part of his branding strategy. Gabriel says, “With an online SaaS business, it starts with a powerful domain. I recommend sticking with a short .com domain that’s easy to spell and [that is] memorable.”

If you find the domain name you want is taken, Gabriel suggests turning to a domain marketplace that sells premium domains. He says, “Spending a few thousand on a domain could make a big difference long term, and give you the credibility and advantage over the competition, especially in the very beginning and early stages of the business.”

6. Make it legal

While you don’t need any qualifications to build software, you may need to comply with the industry you’re looking to serve. Be sure to look into that industry’s specific rules and regulations, as well as legally set up your company including the following elements.

Choose your business structure

One of the only things you’ll need to do in order to be legally in business is to choose and register your business structure.

In terms of the best business structure, it really depends on your needs. For GreenPal, Gene Caballero says, “We knew that if we ever wanted to be looked at seriously by venture capitalists, we would need to be a C-Corp in Delaware.”

In fact, GreenPal wasn’t the only one that figured it was best to go for a Delaware-based C-Corp. Ryan Chan, founder at UpKeep said, “We created an LLC at first, but after realizing that we wanted to take on venture capital, we decided to move to a Delaware C corp.”

You can read more about setting up a C-Corp in Delaware here; it’s a particular favorite for technology startups, and there are plenty of reasons why:

• The ability to incorporate without needing to reside in the U.S., or even be a U.S. resident. Establishing a U.S. presence via a Delaware-based C-Corp also gives non-U.S. residents access to U.S. resources such as U.S. venture capital.
• Delaware’s corporation law is known to be favorable to owners and is considered more flexible and certain than in most other states.
• Delaware permits a single-member board of directors.
• Delaware does not require the Secretary of State to review and approve filings before they are effective.
• Delaware law gives preferred stock investors of a corporation certain voting rights and control over the corporation.

Pick a name for your business

You can’t register your business until you’ve given it a name. This is a part of the startup process you may actually enjoy. Ideally, you would have run your ideas by your potential target market first, but if not, there’s still time to figure out what will resonate with them.

Noah Parsons and the team at Palo Alto Software chose “LivePlan” as the name for their business planning product because they wanted the name to reinforce the nature of the product. Noah says, “We wanted a name that would resonate with our customers, help explain what we do, and reinforce the nature of ongoing use.”

If you’re no good at coming up with names on your own, try a business name brainstorming tool. There are plenty to choose from!

Also, be sure to read our guide on how to register your business name . You need to be sure it’s not already taken, close to another company name, or even just confirm that the website and social channel handles are still available.

7. Financing and funding

How do you get the funds to start your business? There are multiple solutions to this problem. You could bootstrap your startup and do most of the tough legwork on your own . You could also go for a larger sum of capital right from the start by pitching an angel investor or a venture capitalist for funding. And, if all else fails, what about asking friends and family to help out?

On the one hand, bootstrapping your business gives you much more control over it. You get to call all the shots, including how you want to operate the business and who you want to be involved with. On the other hand, it’s a slow process.

On the flip side, getting the right investors on board from the beginning can expedite both your learning and your go-to-market strategy. You might also get immediate access to channels that might have otherwise taken years to break into. But, you’ll give up some control of your company the moment you bring on outside investors.

Circle back and create a more detailed forecast

Before deciding on which funding and investment routes you’ll pursue, the best thing you can do is develop a more detailed financial forecast. The reason we advised holding off on creating a detailed forecast until now was that you hadn’t yet validated your pricing or your market and hadn’t fully explored startup costs.

What if you’d found out your customers wouldn’t be open to paying your initial price? Or, what if you’d learned you were charging much less than people were willing to pay? Your forecast would have been for nothing.

But if you’re planning on seeking out a loan, pitching your company to investors, or even self-fund, a detailed forecast is necessary. For investors and funding organizations, having a thorough and well-thought-out forecast can improve your chances of actually getting funded. For your own use, it acts as a management tool that can help you better understand the health of your business, set milestones, and guide decision making.

A few resources you may want to check out include:

• How to Forecast Your Sales
• A Complete Guide to Forecasting Sales for Your Monthly Subscription Business

According to Noah Parsons, “Without a real sales forecast and budget, you have no idea how much money you’re going to need to get your business off the ground. After all, with a subscription business, you’re only going to get a small payment every month from each customer, and you don’t know how long customers are going to subscribe, so you have to constantly update your forecast as you learn more about your customers. This forecast will help you predict how much cash you’re going to need to fund your growth.”

Sales forecasting isn’t impossible, or even all that difficult. Anyone can do it so long as they know their customers and their market. The great thing about the sales forecast is that it will really help you, and investors, answer that central question — Can my business really be a business?

Once you’ve done your forecast, don’t forget to go back and update your lean plan. You will do this throughout the life of your business, so get used to it and enjoy it.

Do it yourself

If you have the ability and the passion to do the work yourself, you can save yourself a lot of money. Joe Kindness, co-founder at Agency Analytics, says, 

“Since Blake and I were both developers (and still are), we were able to create this company without any funding or additional resources. We set a goal to be profitable within one year and if that did not happen, we would move on. After about a six-month development cycle, we launched a beta version in July 2010, and three months later, started earning revenue that grew each month. The real motivation in all this was passion. Sure it was great (and essential) to be validated with revenue, but ultimately we enjoyed what we were creating so much that it resulted in a very nice product.”

If you can use your own savings or get a small bank loan, or even fund yourself via a third-party platform, you can avoid taking on too much risk. Gabriel Kuperman, CEO of CuePin, says, “Try testing an idea with a small budget that you can obtain through your own savings, a small bank loan, or even a Kickstarter campaign. Bringing in investors too early, before proof of concept is hard and may be unnecessary. You might also be giving investors too much equity early on, as the risk is extremely high for them in the beginning stages of growing a SaaS company.”

Taking the slow and careful approach can also save you from making some costly mistakes, says David Batchelor, President, and co-founder of DialMyCalls. “[Doing this] helps you really learn and get a feel for your industry, and lets you make mistakes on a smaller scale. It’s not as sexy as getting a big VC investment upfront and takes a bit longer, but at the end of the day, it has been much more rewarding for us to build it with our own capital.”

Seek out venture capital funding

In the event that you’re seriously thinking about pitching for VC funding (scary statistics aside), it’s useful to know a bit more about what venture capitalists are looking for. You can start by reading a few (or all) of these 17 venture capital blogs, reading Tim Berry’s thoughts on what venture capital firms want, and his advice on finding venture funding.

Even though Konstantinos Bratanis, co-founder and CTO of Goodvidio, and his partner started the business with their own hard-earned money, they were able to eventually raise VC funding. The great thing about raising money after they’d already started was that they’d had time to validate their idea and start building a team of good employees.

Konstantinos says, “As we were validating the value of our solution and recruiting early adopters, we started talking to a few VC firms. At the time, we didn’t have a sales pipeline yet or revenues coming into the firm. What encouraged us, was learning that at such an early stage VCs are more interested in the people behind the new company and their potential to build a viable business. They have modest expectations when it comes to cold hard sales and revenue numbers, so they want to see that there is a healthy team spirit behind the wheel that has the potential to reach growth. They want to see commitment, drive, vision, and hard work. Thanks to a combination of these traits we were able to secure a first-round of six-figure VC funding, which gave us a jump-start to start developing our sales and marketing channels.”

Just be sure that when you approach investors that you have your updated business plan, financial documents , and a refined pitch deck ready to go. These will help you prepare and give investors more holistic documentation to reference as you pitch your business.

8. Build your product

In this section, we’re briefly going to cover some of the things that are worth keeping in mind as you build your product.

Start as soon as possible

Noah Parsons says, “Start collecting contact information for interested, prospective customers. Develop a landing page, do some lightweight advertising, and generally reach out to as many potential customers as you can.”

In fact, you can even set up the landing page before you’ve finished building the product. Gleam.io has some great growth hacking strategies on their site; use these to give you that early boost.

Start small

Gabriel Kuperman, CEO of CuePin, also stresses the importance of starting small. 

“When starting our SaaS company, we set out to create and develop the most important features for our launch. As we went through development, we began to accumulate many other ideas for features—both internally and through users who were testing our app. When you’re working with a shoestring budget, you want to release your app, get some real feedback from your targeted audience, and have some funds left over for marketing.”

Use a development methodology

Noah says, “Agile is what most software companies use. Estimate what it’s going to take to get to a working alpha or MVP.” You can learn more about the agile development methodology on Version One’s site.

Keep core development in-house

According to Dharmesh Shah, outsourcing core product development is something most startups shouldn’t try doing as there are many risks involved. And Buffer’s CEO Joel Gascoigne believes much the same thing; according to him, a freelancer’s goals are entirely different to your own. They’re not invested in the product like you are, or perhaps like someone with a stake in the business might be. Plus, they’ll be more likely to think about limiting the scope of the project to the allotted time or budget. I highly recommending checking out Joel’s article as he also gives some actionable tips on what to do instead of outsourcing the development process.

However, if you have the option of working and hiring remotely (not necessarily freelancing or outsourcing), do it. Noah Parsons says, “Skip the expense of an office if you can, but invest in great collaboration tools. For example, Buffer, a successful social media company, just closed their only office. There are benefits to in-person collaboration, but unless you can get space very inexpensively, focus on developing your product first. Offices can be very expensive and add little value.”

At Palo Alto Software, we rely on tools like Slack, Trello, Basecamp, and Jira to keep us all abreast of what is going on in the company.

9. Develop your go-to-market strategy

There are many ways to market a SaaS product — from paid advertising and affiliate partnerships, through active outreach to media outlets, and content marketing. Experimenting with a combination of these methods is a good idea. Pay attention to what works and be aware that it may change over time.

Do your own PR

Whether or not you’ve got the budget, doing your own PR to start with is a good idea. After all, who knows your business better than you?

“The media is always looking for new content to write about,” says Gene Caballero. “Just ask. We sent press releases to all of the cities that we launched in and easily got press in all of them.” Start building up a list of writers and journalists interested in news you may have to share, that you can reach out to. Use Twitter’s advanced search feature, and sites like Contently to find people who may be a good fit.

Participate in online communities

You can also spend some time participating in relevant online communities. Noah Parsons says, “Become an expert. Start participating in relevant discussion groups, comment on relevant blog posts, and start your own blog. You can get a little initial lift through sites like ProductHunt. Otherwise, it really depends on your industry. Figure out where your prospective customers hang out online and work to get coverage in those locations.”

Konstantinos Bratanis, co-founder of Goodvidio, offers much the same advice. He says, “When you start your SaaS business, you’re hit with a cold hard truth that you’re just a spec of dust in the universe of fast-paced tech and innovative ideas. Nobody knows your company’s name or what you do, especially if you’re providing a solution that is very new for your market. So, your first task is to get your name out there.”

For Goodvidio, this meant starting with a local community. Konstantinos says, “Since our market is online retailers, we approached our local eCommerce association and started interacting with the community. We asked for feedback about our software and our growth ideas and took part in the conversation. Taking part in the daily life of the community and learning how the ecosystem worked paid off because we started getting referrals, word-of-mouth, and endorsement from community leaders. That’s a good approach to meet early adopters and people who will be willing to work with you. This helped us get traction in the first year of business.”

Go the content route

Today, it’s particularly important for SaaS companies to do content marketing, and it’s even relatively affordable. Content marketing, as defined by the Content Marketing Institute, is “the marketing and business process for creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience — with the objective of driving profitable customer action.” It’s a marketing strategy that has seen immense growth over the past decade.

Noah says, “Find your prospects and work to help solve their problems. Use content marketing to share your knowledge on a topic and attract prospects that way.”

It’s relatively easy to get started doing content marketing by simply maintaining a company blog your target audience will find useful and interesting.

CEO Uwe Dreissigacker says, “SaaS companies should definitely operate their own blog. We blog at https://blog.invoiceberry.com, in case you want to pop by and read about small business and freelancing. It is also useful to get listed on all the big SaaS directories early on in order to get websites linking to your product and to receive initial product feedback. Producthunt.com is a great resource for viral marketing for the product launch as well as community feedback.”

That’s two votes for Product Hunt from two separate entrepreneurs. It’s not hard to see why, especially as it surfaces cool new products on a daily basis. Be sure to check it out.

Do a bit of everything

How will you know what works for you, unless you try it? Online, there are so many different ways to do your marketing and it’s simply not feasible, especially when you’re just getting started, to do them all. You have to try them, see how they go, and then pick the best performing of the lot.

“In terms of marketing, you should try to stretch your budget to a few different advertising channels. Putting all your eggs in one basket is not ideal,” says Gabriel Kuperman, CEO at CuePin. “This way, you can see which marketing channel gives you the most value. Make sure you’re tracking ‘conversions’ so you can see which marketing channel has the best conversion rate. A good online campaign should include paid search engine advertising, social media advertising, email marketing, and a PR campaign.”

Don’t forget real-life products

Don’t forget the value of using real-life products to market your business. Yes, even for a SaaS company. Many SaaS companies send stickers, or small “thank you” present to their best or most loyal customers, and many if not most founders and key team members have business cards. 

Start with beta testing

Yet another great way to get started doing marketing is to launch a beta product. It’s also a good way to learn before the real thing is out there. Gabriel says, “Create a beta version of your app or software and get it released when it’s fully-functioning and bug-free. I’ve seen too many SaaS companies delay their launch because they continuously add features that they ‘want’ before they can release the first version. My advice is to get it to market when it’s in a usable and respectable form and let your beta users give you feedback and help shape the future of the software.”

10. Establish metrics for success

Whether or not you consider yourself a fan of numbers, if you run a business, you’re going to have to get used to looking at them.

For many people, tracking metrics can seem scary, boring, or time-consuming. But the truth is, these numbers are going to become your best friends. They’re going to help you make informed decisions, which will in turn take a lot of the weight of guesswork off your shoulders. Tracking your key metrics will also help you figure out how to grow, and whether or not it’s a good time to do so.

We use LivePlan’s Dashboard feature to keep track of our own metrics.

The benefits of tracking key metrics

In order to monitor your business’s health, it’s essential to understand what these metrics can tell you about your business. It’s also imperative that you monitor how these metrics are performing on a regular basis so that you can make better decisions and plan proactively for the future.

A few of the benefits of tracking your metrics include:

• Improving your current performance
• Improving future performance
• Catching things before they become problems
• Getting real feedback related to your goals and milestones
• Making decisions with more confidence

For those business owners who don’t keep an eye on the numbers, the statistics are not pretty. According to the SBA, 28 percent of businesses fail due to problems with the financial structure of their company, including keeping poor accounting records. If you don’t keep these records, or have a system in place that allows you to monitor them, you could run into problems.

The benefits of regular plan review meetings

At Palo Alto Software, we review our metrics in monthly plan review meetings. These meetings don’t take more than an hour, but they do provide insight into what is going on in the company. We use these meetings to ensure that we’re on track and in line to meet our goals. If we’re not, or something else has come up, we adjust our plan.

Here’s a brief summary:

1. We take some time to review the overarching numbers. How did we do compared to our forecast? How did we do compared to last month? Last year?

2. Review major milestones. Did you meet them? If not, how should they be adjusted?

3. Review long-range goals and strategy. Are you still on track to meet these goals? You may need to revise your long-term strategy based on the trends you notice in your numbers.

In order for your monthly plan review meeting to be successful, make sure to put it on your calendar, follow a repeatable agenda (so that everyone knows what is up for discussion), and be prepared to change your plan. These meetings aren’t about sticking to the plan if it no longer works, but rather about adjust the plan based on what the numbers reveal.

• Starting a SaaS business takes time

While the startup process for a SaaS business can be condensed down to these 10 steps, each component will take time, testing, and refinement. You may even find consistent overlap between steps that have you complete specific elements in a completely different order. Funding, for example, may be something your startup doesn’t seek out until years after you’ve launched, and developing your business plan will be a constant process you revisit throughout the life of your business.

If you take away anything from this guide, just know that the most important thing for a SaaS startup is to get your product out there. As long as you have a working plan, metrics to track success, and a willingness to iterate, the more likely your business will survive and stand a chance against the competition.

Clarify your ideas and understand how to start your business with LivePlan

Candice Landau is a marketing consultant with a background in web design and copywriting. She specializes in content strategy, copywriting, website design, and digital marketing for a wide-range of clients including digital marketing agencies and nonprofits.

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How to Start a SaaS Company: 6 Ingredients for Success

Lea LeBlanc on June 27, 2023

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More founders journey articles.

Projections indicate that the SaaS industry will be worth $700 billion by 2030 , and 99% of companies will have at least one SaaS solution installed by late 2023. These numbers prove that now is as good a time as any to launch a SaaS company.

Are you working on launching a successful SaaS business ? If so, you’re in the right place. In this guide, we’ll share the best tips for how to start a SaaS company. We’ll also reveal what makes a good SaaS product, so you can hit the market with a solution your target users won’t hesitate to pay for.

Why Start a SaaS Business?

The SaaS industry is already highly profitable, and its profitability is still growing. This is due to the increased adoption of SaaS solutions among small, medium, and large businesses. For instance, companies used an average of 12 SaaS solutions in 2016. By 2021, the average number of SaaS apps used in businesses rose to 110 .

More businesses using SaaS products means a bigger market, which you can get a slice of by introducing a SaaS solution that solves a pressing problem. Fortunately, unlike most industries, the SaaS industry has low barriers to entry. You can start a SaaS company with minimal upfront investment because you don’t need much physical infrastructure or a big team.

Combine SaaS’ recurring revenue model with low overhead costs, and you can expect potentially high-profit margins. The winning mix has contributed to projections of continued SaaS industry growth.

Let’s now dive into the secret sauce for starting a successful SaaS company.

How to Start a SaaS Company: The Idea

The first and most vital step to creating a successful SaaS company is coming up with a solution idea . Your idea must solve at least one existing problem, and an effective way to get such an idea is to look inward.

What pressing issue have you experienced at work or in your personal life, and what would solve it? Your answer to this question will be your idea that you can turn into a SaaS product.

If you can’t think up a problem to solve, you can look outward by actively listening to those around you to identify the problems they want to solve. For example, what recurring issue do your friends, families, colleagues, or seniors mention, and do you have a solution idea for it?

However, note that you can’t pick just any problem to solve. The problem you want to create a solution (SaaS product) for must be relevant and specific. Otherwise, you may have trouble finding a market for it.

The problem must also be long-term and recurring. Otherwise, people could eventually have no use for your solution, leading to negative results.

Product Development: What Makes a Good SaaS Product?

The next step in starting a SaaS company is developing your SaaS product. As we’ve mentioned, you need an idea first. The product must solve an existing and recurring problem. The more widespread or popular the problem is, the more potential users you’ll have, meaning a bigger target market.

But there’s more to what makes a good SaaS product. Besides providing a valuable solution to user problems, a good SaaS product must be:

Unique: It’s rare to find a SaaS product with zero competitors. Differentiate yourself from the competition by offering a quality product that delivers value and something unique. The unique element could be cost-effectiveness, customer support, or something equally attractive.

User-friendly: Regardless of how much value a SaaS product delivers, users will avoid it if it’s difficult to use. Create a SaaS product that the average user can quickly understand and navigate to experience value without assistance or extensive training.

Scalable: Users should have no trouble scaling your product to match their growing or shrinking needs. From your end, your product should also be able to scale to accommodate your user base and traffic as it grows. Lack of scalability will lead to users experiencing performance issues.

Reliable: Your SaaS product should be reliable with consistent uptime and speed. SaaS products with excessive downtime and service disruptions are untrustworthy, leading to high customer churn.

Validating Your Idea

Once you have a product idea, you should test its viability. Doing so ensures that you build a product that users want and will be willing to buy.

You can test your product’s viability by performing product validation. While there are several ways to validate a product , in our experience, the best way to do it is to build a product and have target users test-drive it. However, building a fully functional prototype of your product only to have users go, “No, thank you” is expensive.

A much more cost-effective strategy is to build a prototype that showcases your minimum viable product (MVP). If users show interest and positively interact with your MVP, it means people care about your product, validating your product idea.

Developing Your SaaS Product

After confirming that your target users love your product idea, you can start building your SaaS product . Start with a rough sketch that showcases how your product’s interface will look.

Your rough sketch will help you identify and eliminate unnecessary elements, plot user flows, and map how your product will work. Next, turn your rough sketch into a prototype: a product mockup with clickable elements.

This prototype will closely simulate the look and functionality of your finished product. With this prototype, you can iron out bugs and get user and stakeholder feedback regarding what to improve, add, or remove.

The prototype can then be used to develop the MVP (as discussed above). With the launch of an MVP, you can then gather user input and develop version one of your product.

Should You Develop Your SaaS Product Yourself?

You can hire in-house developers, freelancers, or a development agency to build your SaaS product. Hiring freelancers costs less, while in-house teams are more convenient due to their accessibility.

On the other hand, hiring a development agency is pricey, but you get expertise and a full-service team to handle all aspects of product development on your behalf. The right option for you will depend on your budget, how much expertise you need, and how hands-off you want to be.

Now that you know how to develop your SaaS product, let’s dive into how to start a SaaS company, including the six special ingredients you need to successfully build a SaaS company.

#1. Financial Plan

Starting a SaaS company costs money, and getting your return on investment can take a while. So, how will you get the money for your SaaS startup, how will you spend the money, and what will you do with your earnings? Your financial plan will answer these questions and more.

A financial plan is a written document that states your company’s financial goals and how you will achieve them. It’s basically a comprehensive roadmap for your company’s finances, and you can use it to track your progress toward achieving your financial goals.

Financial plans for SaaS startups typically detail revenue projections, cash flow, and expenses for specific periods. Without a financial plan, you may struggle with managing finances to ensure your business’s long-term viability.

Build a financial plan for your SaaS company by following this process:

Outline your financial goals: Specify the financial targets you want to hit and the timeframe to achieve each one.

Identify revenue streams: Revenue streams are sources of capital for your company. Since you’re a new company, you can generate revenue through pre-orders, loans, angel investments, and other sources.

Forecast future finances: Your financial plan should contain a forecast of your sales and revenue generation for the upcoming year. Effective financial forecasting requires identifying relevant data, such as target market size. With the data, you can estimate how many customers you’ll acquire and how much revenue each customer will generate.

Estimate operating expenses: Your business will incur operating expenses as part of its daily operations. Such expenses include salaries, utilities, marketing costs, and so on. Your financial plan must list these expenses because they will eat into your revenue and profit. Listing these expenses will help with budgeting and identifying areas for cost-cutting.

Determine cash flow: Create a cash flow statement that shows your cash inflow and outflow for a specific period. The statement can help you identify cash flow gaps or surpluses. It can also help you estimate how much funding you need and when your company will become profitable.

Create a budget: Analyze your revenue, gross profit margin, customer acquisition costs, churn rate, and other relevant data. Use insights from the analysis to create a realistic budget that will cover your expenses for the next six months to a year. The budget should align with your financial goals and help prevent overspending.

Use our financial model template to build a financial plan for achieving your goals.

#2. SaaS Pricing Strategy

Your SaaS pricing strategy determines your product price and how you’ll charge users to access your product. Charging very low ( penetration pricing ) to attract customers to your product may seem tactical, but it has its downsides. For instance, low prices can negatively affect your long-term profitability.

However, if you charge too high (far higher than competitors), you could put off potential customers and lose them to more affordable competitors. You need to find the pricing sweet spot that attracts customers, profits your company, and minimizes the risk of churning. Identify the right price for your SaaS product with these steps:

Analyze your product to verify its value

Research competitors to identify how much they offer similar products

Identify what potential customers are willing to pay for a product like yours

Based on your research, you can use a value-based pricing model, a cost-based (cost plus) pricing model, or a competitor-based pricing model. Value-based pricing involves charging a price that matches your target user’s perceived value of your product.

On the other hand, cost-based pricing involves identifying the cost of building, marketing, and distributing your product. You then add a premium to that amount to create your product’s price. Lastly, competitor-based pricing involves charging a price similar to your closest competitors.

Next, you need to pick how to charge. Will you charge monthly? Will you offer annual subscriptions? Or, maybe you’ll charge per feature or have a usage-based pricing model. How you charge is crucial as it will affect your product’s ease of adoption. It will also impact forecasting for your SaaS financial model .

#3. Customer Acquisition Strategy

After starting your SaaS company, it needs to start making money, and it can’t do that without customers. How do you get customers? With a customer acquisition strategy. This is a plan that lays out multiple tactics for attracting and converting new customers .

Since SaaS companies are different from other business types, it requires a unique customer acquisition strategy. A SaaS customer acquisition plan must be purpose-driven and build long-term customer relationships. Create such a strategy with these steps:

Define your target audience: Identify the people you want to target with your customer acquisition strategy. Ideally, your target audience will consist of people who need and can afford your product.

Select acquisition channels: Your acquisition channels are the platforms for connecting with your target audience to market your product. Popularly used acquisition channels include social media, email, and business websites. Get the best results by connecting with your target audience via channels they already use. For instance, if most of your target audience frequently congregates on LinkedIn, then you should market on LinkedIn.

Build a marketing budget: Your budget will dictate how much to spend to reach and convert potential customers. Create a marketing budget that isn’t so large that it puts your company in the red but not so small that it yields insignificant ROI.

Have a well-optimized landing page: Your brand’s landing page is essential. It determines the first impressions of potential users led to your website by your marketing campaign. Make the landing page attractive, show social proof, add valuable content, and strategically place calls to action to convert visitors.

Share positive reviews: User-generated content, such as testimonials and reviews, is known to influence customer purchasing decisions. Showcase customer success stories by inserting the brand logos of satisfied customers on your homepage and sharing case studies and reviews.

Create valuable content: Your acquisition strategy should include content marketing, which involves sharing valuable, insightful, and engaging content. Share such content on acquisition channels to engage, educate, and convert your target audience.

Monitor performance: Lastly, frequently check the performance of your customer acquisition strategy and make adjustments to improve results. Skip this step, and you could blow your marketing budget without getting the desired return on investment.

With Baremetrics, you can view MRR, conversion rate, and other metrics within your dashboard to judge your customer acquisition strategy’s performance.

#4. Business Plan

Like every other business, companies using a SaaS business model need a written business plan. The plan for your new SaaS company will outline its marketing and sales strategies, financial projections, organizational structure, and operational details.

Your startup needs such a business plan because it will help clarify and communicate your vision and strategy to potential investors and customers. It can also help articulate your value proposition and build credibility by showing your roadmap to achieve growth and success.

Create a comprehensive business plan for your SaaS startup by adding these details:

Mission/vision statement: The mission statement will distinguish you from competitors by clearly stating your company’s core values, purpose, and overall mission. Your vision statement, on the other hand, will describe your company’s direction, long-term goals, and aspirations.

Executive summary: The executive summary is a concise and persuasive overview of your business plan. It gives readers a quick and clear understanding of your company’s value proposition, market opportunity, and growth potential.

The product: Your business plan should clearly describe your SaaS product or service. The description should cover your product’s unique value proposition and competitive advantage over existing products.

Target market: The plan should contain a detailed analysis of your target market. It should clearly state customer segments, demographics, and buying behavior so investors have a clear picture of your target audience.

Marketing and sales strategy: The business plan should specify your customer acquisition, retention, and growth strategies. It should also contain financial projections for your first and second years to paint a picture of your anticipated profitability.

Organizational structure: Your SaaS company can’t run itself. Specify your company structure and management strategy in the business plan. You should also add details regarding roles and who will be responsible for specific duties.

Note that the most successful SaaS businesses have business plans that prioritize customer retention. That’s because happy, long-term customers ensure uninterrupted recurring revenue, which is essential for a SaaS company to succeed.

Legal Considerations

Our how to start a SaaS company guide would be incomplete if it didn’t mention business formation . You must incorporate your SaaS company, but first, you must pick a legal structure. The legal structure may be an LLC, C corp, or S corp.

A Limited Liability Company (LLC) is a flexible and relatively simple business structure ideal for small businesses and startups. C corporations (C corps) have shareholders as owners, and you can raise capital through stock sales. On the other hand, S corps have certain tax advantages, such as not paying federal income tax on profits.

Before picking between an LLC, S corp, and C corp, talk to a corporate lawyer who can help you make a well-informed decision in line with your business plan. Other important legal considerations you shouldn’t ignore are:

Intellectual property protection

Data privacy and security

Contractual agreements

Compliance with relevant state and federal laws and regulations

#5. Launch Strategy

After creating your SaaS product, how do you bring it to the attention of your target customers so they buy it? That’s where a product launch strategy comes into play.

A launch strategy outlines the steps to introduce your new product to your target market. It involves:

Identifying target customers

Determining product pricing

Developing and executing marketing and communication tactics

The goal of the strategy is to generate excitement, awareness, and interest in your product. The more aware and excited people are, the more sales you can expect once your product launches, ensuring a strong start for your company.

On the other hand, generating insufficient awareness and excitement for your product can lead to slow sales and trouble raising sufficient revenue to keep your startup afloat.

Use the below tips to launch your SaaS product :

Conduct market research: Your research should help you identify and understand your target audience. Insights from the research will also help pinpoint the best communication channels for connecting with your audience. Lastly, it will reveal the most effective content and language for engaging your audience to get them excited about your product.

Create a product launch plan: Your launch plan should include the timeline and budget for your product launch. It should also list your strategy for generating buzz and key performance indicators (KPIs) to measure your launch’s effectiveness.

Announce your product: Let the world know your product is coming and target your messaging at prospective customers. Share your announcement via multiple marketing channels, but focus more on your target audience’s preferred channels.

Launch an MVP: The MVP is a base version of your product with only core features and functionalities. Release this prototype so people can test drive your product before it launches. Besides generating awareness of your SaaS product, you can use the MVP to collect feedback on ways to improve your product before release.

Perfect user onboarding: Create a simple and intuitive onboarding process that ensures new users can easily access your product and experience value. The sooner new users can try your product and experience value, the more excitement it will create, leading to free word-of-mouth advertising.

Engage users: Maintain excitement levels by engaging users via social media and communication channels. Also, provide ongoing support and updates to deliver the best user experience.

#6. Metrics & Results

Congratulations! You’ve launched your SaaS company, but your journey’s not over. You have to measure your startup’s growth and performance to confirm you’re on track to achieve your business goals. Tracking your results will also reveal underperforming strategies and operations you can improve to get better results and protect your ROI.

Some of the most important metrics SaaS startups track include:

Active Customers: This reveals how many users your product has.

Customer Acquisition Costs (CAC): This is the amount you pay to acquire each new customer, including the cost of marketing, onboarding, and so on.

Churn Rate: This is the percentage of customers lost within a specific period.

Average Revenue Per User: This is the average amount of revenue you earn from each active customer monthly.

Customer Lifetime Value: This is how much you can earn from a customer during their relationship with your company.

Monthly Recurring Revenue (MRR): This is how much you expect to earn from your users each month.

Conversion Rate: This shows the percentage of users who take your desired actions, such as signing up, booking a demo, or paying for a plan.

Baremetrics is the easiest way to track the above metrics and understand the data. With the Control Center of our user-friendly SaaS reporting solution, you can see and react to real-time events and insights. Track events and transactions, such as cancellations , signups, payments, and downgrades, and make well-informed decisions.

Baremetrics facilitates quick and accurate analysis of SaaS and subscription KPIs via its Smart Dashboard . The visual and interactive dashboard turns complex data into simple information so you can dive deep into relevant metrics. Even better, the segmentation feature allows you to filter insights by segmenting customer data into specific categories. That way, you get to see only the data you need.

Other valuable features include the Benchmarks and Forecasting tools. With Benchmarks , you can compare your metrics with competitors. The insights from the comparison will help you identify how to improve and compete more effectively in your market.

The Forecasting tool is excellent for predicting and planning your company’s future. The tool uses relevant data to forecast MRR, customer churn, cash flow, and more. With this information, you can make data-driven decisions to scale your business and minimize churn.

Reach SaaS Success With the Help of Baremetrics

Baremetrics is the only tool you need to view and understand your company’s customer and growth data. With our tool, your SaaS startup can track and measure various KPIs to understand how close you are to reach your goals. Insights from measuring your SaaS metrics will also reveal performance areas you can improve to stay on track and achieve better results.

Know what’s going on with your revenue and customers in real time by taking a test drive of Baremetrics today!

• Startup costs: $50,000-$150,000
• Industry trend: Growing
• Difficulty: Moderately difficult
• Profitability: 68-75%
• Time to build: 6–18 months
• Commitment: Full-time

From an era where it took hours at length to install software to an era where it takes a few minutes to avail of software services – the technology generation has come a long way.

As of 2023, the SaaS space is worth 195 billion dollars and it is expected to grow tremendously over the next few years. There is no better time than today to start your own SaaS business.

Whether you are a software developer with a solid technical foundation or a smart-witted entrepreneur wanting to capture their share in this thriving market, SaaS is perfect for you.

However, starting a SaaS business is not an easy task. It’s complicated and requires a series of trials, testing, and reiterations to get it right.

Well, we have your back. This step-by-step guide answers all your questions regarding how to start a SaaS company in great detail.

So simply, let’s dive right in.

What is a software as a service (SaaS) company?

SaaS companies are typically software-based companies offering their services through web-based applications or Internet browsers. Most SaaS companies charge a monthly or yearly subscription from their customers while there are other ways to generate revenue as well.

Unlike traditional software companies that have a slightly restrictive structure, SaaS business models offer a plentitude of opportunities with their flexible structure. These softwares are hosted over individual cloud servers making it easy to scale and deploy changes.

Wondering how much money will it cost you to set up a SaaS business? Well, read along.

How much money do you need to start a SaaS business?

The average cost to start a SaaS (software as a service) business in the US is anywhere between $50,500- $150,500 . Depending on the complexity of your SaaS business model, the costs can extend up to $500,000 .

These costs are highly influenced by factors such as development, legal, branding, and marketing costs.

Now before you start looking out for funds, let’s have a look at detailed steps that will help you start a SaaS company systematically.

Step-by-Step Guide to Start a SaaS Company

Table of contents.

• Develop a Solution for a Customer Problem
• Write a Lean Business Plan
• Validate Your SaaS Idea
• Select Your Revenue Generation Model
• Brainstorm a Name for Your SaaS Product
• Register Your Business
• Build Your Product
• Consider Your Funding Options
• Establish Your SaaS Brand
• Develop a Marketing Strategy
• Measuring Success with Metrics

1. Develop a Solution for a Customer Problem

“You don’t need a brilliant idea to start a business . You just need a customer with a problem and a solution to offer.”

To build a successful SaaS business, begin by identifying the problems around you. Pay attention to the personal and professional communication in your everyday life. Look at your own struggles with different products and services and see if there is an untapped market opportunity.

Another brilliant idea is to explore the ideas on Reddit and Quora channels to skim different sorts of problems. The overall idea is to find a problem worthy enough to get a SaaS solution built around it.

Now, while exploring potential solutions for the problem, you have one of these 3 ways to go around:

• Identify the gap in existing solutions and find a way to fix it.
• Talk with potential customers and identify their pain points.
• Leverage your understanding of the industry to devise a solution.

Don’t try to solve multiple problems all at once. Stick to a specific niche and develop a market around it.

2. Write a Lean Business Plan

Start by quickly translating your idea onto a paper by writing a lean business plan. Unlike traditional detailed plans, let’s keep it short for now.

Lean planning is an effective and easier way to get around when your SaaS idea is yet to be validated. This one-page pitch includes a quick overview of strategy, tactics, business model as well your SaaS business proposition.

Create a checklist and ensure that you answer the following questions in your SaaS lean plan.

• What problems will you solve with your SaaS product?
• What are the USPs of your SaaS company?
• What will be the cost of building and deploying a minimum viable product?
• Who is your target market or what different market segments will you target?
• Who are your competitors and what is your competitive edge?
• Who will be there on your SaaS team?
• What is the value proposition of your saas business and what are the milestones you plan to achieve?
• What will be your revenue model?

Write a lean business plan in no time

Get Upmetrics’ lean plan template, import data directly into the editor, and start editing using Upmetrics AI Assistant.

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3. Validate Your SaaS Idea

After identifying the problem and devising a solution for it, it is now time to validate your SaaS idea. Take that lean plan and check if the assumptions you made are viable or not.

This step is important to understand if your idea has enough potential to make you money. Be realistic instead of diving right into the first idea that you consider to be best and pragmatic.

Here’s how you will validate your SaaS product idea:

Get to know your target customer

Getting to know your potential customer is perhaps the most important part of starting a SaaS company.

Gather a ton of primary data by talking to your potential customers directly. An easier way would be to design surveys and interviews in your target market. Run a search ad and launch a Kickstarter to collect realistic data for your SaaS company.

This step will help you understand whether or not the problem identified by you resonates with your potential customers and if your proposed solution is perfect for them. Moreover, this step will help evaluate the range within which you can price your SaaS products.

Conduct a competitive analysis

“To compete effectively, you must know your competition better than they know themselves.”

Competition is nothing to be afraid of. It’s in fact an indication that the problem you are attempting to solve is actually a realistic problem that demands a solution.

Conduct market research and identify the SaaS providers that will pose your SaaS business as a competition. Evaluate their SaaS products and identify where they fall short in fulfilling the customers’ wants.

Conduct a SWOT analysis and identify these SaaS companies’ strengths, weaknesses, opportunities, and threats. Determine your competitive edge over these businesses and devise your software accordingly.

Create a minimum viable product

Creating an MVP is the easiest and most practical way of validating business ideas . It is the basic and simplest version of your product, focusing on one value proposition.

One huge mistake made by SaaS businesses is delaying the launch till they get their extensive product ready.  Well, let’s break the bubble- your perfect SaaS product will never be ready.

Launching an MVP in the market will allow you to gather real-user feedback and accordingly make iterations to the product features and design. This will help you create a sustainable product that can beat other SaaS products in the market.

Here are a few things to keep in mind while launching your MVP:

• Keep your MVP extremely simple. Include bare minimum features that are extremely crucial for your SaaS application.
• Gather the feedback right from the beginning. Talk with your potential customers to understand what they like and dislike and what they want from your product.
• Don’t ignore the feedback if it’s not to your liking. Take it constructively and be prepared to change the idea if it doesn’t suit your audience.

If you don’t have the resources to create an MVP of your SaaS application, you can get the work done with wireframes, mockups, explainer videos, landing pages, and even paper sketches.

Leverage the data collected using MVP and use it resourcefully to build a product that people will actually pay for.

4. Select Your Revenue Generation Model

In this step, you will determine a way to make money by selling your SaaS software services. In simple terms, a pricing model to charge for your SaaS products.

SaaS businesses typically use one of these revenue generation models depending on their type of offerings and the target market.

Subscription-based pricing model

In the SaaS industry, SaaS subscriptions are the commonly used method of generating revenue. SaaS companies charge monthly or annual fee on their subscriptions and sometimes even quarterly. You can also offer a free trial before taking the commitment from users.

A subscription-based pricing model helps you retain a customer base for a longer time, given that you continue to provide effective solutions to their problem.

Tiered pricing

Tiered pricing is suitable for SaaS companies that can easily segment their users based on available features. In this method, you create different pricing plans ranging from one with the least features and support to the one with maximum features and support.

Customers get to select what level of features and support they require by choosing specific plans.

User-based pricing

Another method used by SaaS companies is to charge their services depending on number of users. For instance, $10 per user/ month.

This method is suited for SaaS companies that are targeting businesses of different sizes, i.e. small, medium, and large scale.

Flat pricing model

In this pricing model, SaaS businesses charge a flat fee in the beginning and offer lifetime access to the services. However, keep in mind, that this model will not give you recurring revenue.

Free pricing

Some SaaS companies offer their services for absolutely free and generate revenue by running ads on their platform. While your prospective customers would love free services, they may not like the invasive nature of ads and interruptions.

Depending on your SaaS business model, you can create a hybrid pricing strategy while keeping your target audience in mind.

It’s important to price your services within a range that is feasible for your potential customers.

5. Brainstorm a Name for Your SaaS Product

In the business world, a great name is a great asset. The success of your SaaS company might not entirely rely on a name, but it definitely plays a crucial role in building your brand image.

Choosing a name may seem like an easy task. But it isn’t. Here are a few things to keep in mind while brainstorming and finalizing your SaaS business name:

• Pick a simple and easy-to-spell name. Don’t go around messing with the spelling just to make it creative.
• Pick something that can be easily remembered and recalled.
• Choose a name that resonates with your SaaS product idea.
• The name should of course be unique. Check the state registry to ensure that there are no other businesses operating with the same name.
• Check the availability of domain names and social media handles before finalizing the name.

Brainstorm different ideas for the name using online name generators. And, don’t forget to get help from friends and family members to help finalize a suitable SaaS company name.

Want a Unique Name for your SaaS Company?

Generate a brandable and catchy business name in seconds with our free business name generator for saas company.

6. Register Your Business

It’s important to legally register your SaaS business by complying with the applicable state and federal rules. Now, the registration process may vary depending on the industry you are planning to enter. So check that with an expert or official pages to ensure complete compliance.

Select a business entity

A business entity is the legal identity of your SaaS company that dictates its liabilities, tax structure, and regulatory compliance. It separates you from the business making it a completely separate entity.

SaaS companies can choose between sole proprietorship, LLC, C.corp, partnership, or LLC partnership business structure models for their business.

Identify the pros and cons of each business structure before determining the ideal structure for your software company.

Also, consider how you want your company to look in front of investors and the public. This will help you pick a business entity that’s suitable for your idea.

While registering a business, consider getting a DBA (doing business as) name if you plan to operate your business with another name.

Apply for tax registration & business EIN

Comply with the state rules and apply for tax registration of your SaaS company. Also, get your EIN number from an Internal Revenue Service (IRS) portal.

Employer’s identification number (EIN) is like the social security number of your business giving it a unique identity. This unique number is essential while applying for a business bank account, filing taxes, officiating payrolls, and filling out an application for a business credit card.

7. Build Your Product

After validating your ideas and gathering feedback from MVP, it is now time for software development of your product. Select a development methodology and get your test models working.

To build your product and work on software development, you will need a team with technical expertise. At this stage, you have one of the following options to consider:

• Hire an in-house team- remote or on-site
• Hire freelancers/ agencies

It is recommended to keep the development process in-house instead of outsourcing it. Having an in-house team will allow you to have complete control over the development and its scope. You can rigorously monitor the quality and speed up the process to meet your requirements.

Instead of renting a commercial place, it is better to hire a remote team and individual software developer. This will help you save unnecessary expenses on lease and monthly rentals. Don’t be afraid to make overseas hires. Invest in collaboration and communication tools to allow a seamless flow of development process in your company.

Also, stop waiting for a perfect time. Start as soon as the MVP of your product is ready. Get your landing pages in line and start with light advertising. It’s recommended to start collecting contact information of your target customers and running targeted ads on them.

8. Consider Your Funding Options

Now comes the funding. You need funds to start software development and work on your SaaS company. The question is how much fund will you require and where will you acquire that funds from?

If you haven’t made the financial projections earlier, it is the perfect time to work on it. Get detailed projections for sales, revenue, startup costs, and overhead expenses to assess the flow of money in and out of the business.

Many SaaS companies venture into the market by bootstrapping their projects. And ideally, it’s the right way to do so. However, if you don’t have enough funds, here are a few options for you to consider:

• Angel investors
• Venture capital firms

It’s also a feasible option to get lending from friends and family instead of relying on angel investors right from the beginning. Doing so will have two advantages. Firstly, you will have complete control over the product and secondly lower liabilities.

However, venture capitalists and angel investors can offer an influx of cash that can prove to be beneficial in development and marketing activities.

Overall, assess your needs and understand the implications of each before pitching your plan to potential investors.

9. Establish Your SaaS Brand

The market is crowded with SaaS businesses trying to capture their share of the market. To stand tall in the competition, you need to create a remarkable brand with a solid competitive edge.

The first step in branding would be to determine the look and feel of your software product and your overall SaaS company. Begin by putting together the logo, colors, and designs that will dominate your SaaS software.

Ensure that the visual elements of your software align with the tone you want to establish in the market. For instance, if you want to come across as a functionally professional but quirky software brand, you need your user interface to align with that image.

Even the domain name is part of your branding strategy. Splurge a little and get a powerful domain name for your SaaS company. A short, simple, easy-to-spell .com extension will help you establish a solid presence right from the beginning.

Lastly, ensure that you have your core values, mission, and purpose clearly aligned. Having clarity in vision will help you create a compelling brand value in the minds of your target customers.

10. Develop a Marketing Strategy

Now, that your software is ready, what are your plans for customer acquisition? Even the most brilliant SaaS software needs to make its presence in the target market to start getting sales.

In this step, you will design your go-to-market strategy to market your SaaS software. Even if you are testing the product on early adopters, you do need a proper marketing plan to reach the target audience.

Wondering what makes a perfect marketing strategy? Well, answer these questions to get your answer:

• What will be your sales strategy and the sales channel?
• How much budget will you spare for marketing activities?
• What marketing tools will you use?
• Will you work on marketing in-house or hire an agency?
• What marketing channels can benefit you?

Now, you can choose a variety of marketing channels to build brand momentum in the market. From content marketing to paid Google adverts, email marketing, influencer marketing, and Social media- your marketing strategies can be as extensive as your budget and resources.

Understand that different marketing activities serve different purposes.

For instance, content marketing by writing educational and informative blogs can help establish your credibility as an expert in the market but not necessarily get you sales. Landing pages and Email adverts on the other hand are a perfect go-to-market strategy for converting your potential clients.

Ideally, you should do a bit of everything initially to figure out what might and might not work for you. Don’t sweat much about the marketing costs. This is an investment you make in increasing your outreach as a SaaS brand.

11. Measuring Success with Metrics

You successfully launched your SaaS company after conducting market research and a series of trials. But hey, this is not it.

In order to run a successful business, you need to consistently monitor and track the performance of your product and marketing activities.

Using the customer data, design customer surveys and understand what these people like and dislike about your product. Get an in-depth analysis

Gather the customer data and run surveys to understand customer satisfaction with apps, products, pricing, websites, and other factors. Dive a little deep to check if the customer is in tune with your value proposition and business offerings.

Now, use this data to measure your KPIs (key performance indicators) and enhance the effectiveness of your product and marketing strategies.

And, that’s pretty much everything to get you started. Now, read along and make sure to not make these mistakes while starting a SaaS company.

Key mistakes to avoid when building a successful SaaS company

Thousands of SaaS startups start every year. However, most software companies lack a solid foundation to withstand the dynamically changing market.

Here are a few mistakes you must avoid to set a strong foothold in the market.

1. Passive marketing

Don’t make a mistake like other SaaS entrepreneurs who skimp on marketing activities. Marketing is a costly affair- accept it.

Building an amazing product won’t bring you customers. Consistent, proactive marketing efforts will. Conduct a detailed market analysis and identify different strategies that might attract customers to your business.

SaaS businesses thrive in a competitive market space. Figure out a way to increase your marketing reach and also measure the performance of each activity to determine what works for you.

2. Focused on too many problems

Instead of solving all the problems in an ineffective way, stick to one customer problem and solve it efficiently.

Only solve one primary concern with your product. Build your SaaS features around that problem and focus on simplicity and ease. Having one core problem will help you market your SaaS solution effectively in the market.

3. Leaving behind security

Invest heavily in the security aspects of your SaaS application. Not only will you establish yourself as a credible business, but having well-built security will save you from major security breaches.

In many cases, negligence on your part can result in heavy fines and penalties from the government.

4. Undermining the importance of maintenance

The customer experience is of utmost importance for the SaaS business model. Maintaining software might not be at the top of your priorities until a significant issue pops up.

However, such untimely chaos will result in prolonged downtime of the SaaS application and extra costs, something that can be avoided by having a proactive maintenance plan in action.

5. Not accepting the change

Most SaaS startups fail because of their inability to change and adapt. If you plan to stay successful for decades, you need to be flexible.

Sometimes the strategies that worked for you initially might not work later on because of certain reasons. In such moments, it’s upon you to nourish your business outlook with a new approach.

Avoid these mistakes and keep yourself abreast with the changing market while starting a new SaaS company.

Related SaaS Business Resources

• SaaS Business Plan Template
• Cost to Build a SaaS Platform

Can you start a SaaS company with no technical background?

Absolutely, you can. Having technical expertise can be an added advantage when starting your own SaaS company. But it is not absolutely crucial.

Partner with the right people with a strong foundation of technical know-how. It’s ideal to have a Chief Technical Officer on board when the owner or the CEO lacks the stronghold on the technical front.

However, to get the right people on board, you must know at least the basics of technical aspects to understand the severity of the situation whenever a technical roadblock arises. It’s easier to acquire knowledge online and learn basic coding if you put your mind to it.

Lastly, consider acquiring a ready SaaS product from the market and getting it white-labeled for your SaaS startup.

Evaluate your options and enter this thriving marketplace with a stellar SaaS business idea.

The process of starting a SaaS company is time-consuming. From filtering the business ideas to developing an MVP to working on its development and marketing it to the right audience- it will take a whole lot of work on your end to set it right.

However, more important than anything, is to get started quickly. Get your product out there in the market- ASAP. Don’t wait to perfect the dreamy ideas while someone else captures the market with your idea.

Once the product is out test it, monitor it, iterate the changes, and keep refining it to sail through the tough waters of a competitive world.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks, AI-assistance, and automatic financials make it easy.

Frequently Asked Questions

How is saas different from traditional software.

SaaS and traditional software differ primarily in their method of delivery and pricing. SaaS is hosted over the cloud whereas traditional software is downloaded over desktop and PC devices. Further, SaaS generates revenue through monthly subscription fees, whereas traditional software companies charge a one-time flat fee to download their software.

How do I identify a target market for my SaaS product?

Begin by conducting thorough market research to understand the needs, pain points, and preferences of your potential customers. Draw a clear persona of your potential buyers to understand who will pay for your SaaS services. Also, dive deep into the market analysis to identify your potential competitors and your competitive edge.

Do I need a business plan for my SaaS startup?

Absolutely, yes. A business plan is essential regardless of whether you are starting a new SaaS startup or scaling the current SaaS model. However, instead of having a traditional 40-page plan, begin by writing a lean plan. Once your SaaS business idea is validated you can add detailed projections for finances and other details to your plan.

How do I create a financial model for my SaaS company?

Before launching your SaaS business, you need to determine the revenue model suitable for your particular target market. Most SaaS companies generate their revenue through subscription-based models by charging flat fees, tiered pricing, or user-based pricing fees.

Identify what pricing model will suit your customer and create a suitable hybrid mix.

What are some common mistakes to avoid when starting a SaaS company?

Here are a few mistakes you must avoid while starting a SaaS company:

• Solving too many problems.
• Not focusing on marketing activities.
• Leaving the aspect of security and maintenance unattended.
• Not identifying the right problem or target market mix.

About the Author

Shyam Dua is a seasoned tax professional with 40+ years of experience & a mentor at SCORE. He stands out due to his exceptional business planning skills. With a keen eye for detail and a strong financial acumen, Shyam crafts compelling business plans that pave the way to success. A CPA with a philanthropic heart, Shyam's strategic expertise, and dedication make him an invaluable asset in shaping thriving business ventures. Read more

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How to Start and Operate a Successful SaaS Company

For those aspiring to venture into the dynamic world of SaaS, we’ve created this guide with a step-by-step roadmap bridging the gap between vision and execution.

From the initial stages of ideation, emphasizing the significance of addressing genuine challenges, to the detailed processes of devising your business plan and selecting an appropriate structure, each step is crucial. We’ll also cover the importance of a user-first approach, effective pricing methodologies, and strategic brand positioning, along with KPI’s and important metrics to track.

What Makes a SaaS Company Successful

Every enterprise, regardless of its niche, thrives on certain foundational pillars. When it comes to SaaS, these pillars not only determine its initial breakthrough but also its long-term viability. So, what makes a SaaS venture stand out?

Prioritizes Customer Success

For SaaS companies, customer success isn’t merely about meeting expectations—it’s about exceeding them. Given the subscription-based model of SaaS businesses, retaining customers is paramount. By ensuring that users derive continuous value from the software, successful SaaS companies bolster loyalty, reduce churn rates, and increase lifetime customer value. They invest in excellent onboarding processes, ongoing customer support, and regular feedback loops to adapt and improve.

The SaaS Company Understands Their Market

A deep understanding of the market is the bedrock of any successful enterprise. For SaaS companies, this translates into recognizing not only who their ideal customers are but also their pain points, desires, and how the product fits into the larger industry ecosystem. By consistently aligning product development with market demand, these businesses ensure that they remain relevant and competitive.

Grows at a Steady Pace

While rapid growth might seem attractive, it can sometimes lead to unsustainable practices or missed opportunities to solidify the product-market fit. The most successful SaaS companies focus on steady, scalable growth. This approach ensures that as the company expands, it remains adaptable, maintains high service quality, and continues to meet its users’ evolving needs.

Is Starting a SaaS Company Without Technical Skills Possible?

Venturing into the realm of SaaS might seem intimidating, especially if you’re not armed with coding skills or a tech background. However, the truth is that while technical know-how is undeniably advantageous, it’s not an absolute requirement. Many successful SaaS founders started with a vision, a clear understanding of their market, and the drive to solve a pressing problem. Partnering with technical experts, outsourcing development, or leveraging no-code platforms are just a few routes one can take. Remember, at the heart of every great SaaS product is a solution to a genuine problem; if you can identify and address that, the technicalities can always be managed.

12 Steps for Building a Succesful SaaS Company

While understanding the core principles behind a successful SaaS venture is vital, actionable steps are what transform that understanding into a thriving business. Here is a 12-step roadmap to establish your very own SaaS company.

1) Build a Product That is a Solution to a Common Problem

The most successful SaaS products are not just software; they are solutions to pervasive problems that users face. Starting with a problem-first approach ensures that there’s a genuine demand for your product. Instead of convincing users to adapt to your software, you’re providing a tool they’ve been actively seeking. This positions your product as essential rather than optional.

Real-Life SaaS Example

For instance, imagine if workplaces had to juggle multiple platforms for every communication need. It would be chaotic and inefficient.

This is precisely the problem Slack aimed to solve. Before its introduction, many teams relied on a patchwork of emails, texts, and various apps for communication. Slack provided a centralized platform where teams could seamlessly chat, share files, and integrate other tools, making team communication coherent and streamlined. Their problem-first approach is a significant reason for their widespread adoption and success.

2) Decide on a Name for Your Company

The name of your SaaS company is not just a label; it’s the first impression, the identifier, and often, the first interaction a potential user has with your brand. A well-chosen name can set the tone for what customers can expect, reflect the essence of your software, and play a role in your brand’s memorability. Conversely, a hastily picked or misaligned name can create confusion or even deter potential users. Given its significance, naming your company is a decision that warrants careful consideration.

Tips for Choosing a Company Name:

• Simplicity is Key: Choose a name that’s easy to spell, pronounce, and remember. Complex names can make it difficult for potential users to search or pronounce when talking about your product.
• Relevance: Ensure the name resonates with the solution your product provides or the problem it addresses. It doesn’t have to be overly descriptive, but some level of relevance helps.
• Check Domain Availability: In the digital age, your online presence is paramount. Before settling on a name, make sure the domain is available. A .com or .io is often seen as the most professional, but with the possibility of other domain extensions, you can also get creative. Visible has chosen .vc and AI companies often use .ai.
• Avoid Copying Competitors: Your company name should stand out and not be easily confused with existing SaaS products. A distinct name can help avoid legal issues and distinguish your brand in the market.-
• Scalability: Think long-term. Choose a name that won’t pigeonhole your company if you decide to expand or pivot your product offerings in the future.
• Solicit Feedback: Once you have a shortlist of potential names, seek opinions from colleagues, potential customers, or mentors. Their perspectives can provide insights you might have overlooked.

Remember, while a name is significant, it’s the value and utility of your software that will ultimately define its success. The name is the hook, but the product is the substance.

3) Create a Business Plan or Write a Lean Plan

Every successful venture starts with a blueprint—a comprehensive strategy that outlines the company’s objectives, methods to achieve those objectives, potential pitfalls, and ways to mitigate them. This blueprint is known as a business plan. However, in the fast-paced world of SaaS, sometimes a traditional business plan can be overly detailed. In such cases, a Lean Plan, which is a distilled version of a business plan, might be more appropriate. Both provide clarity, focus, and a roadmap, but they differ in depth and detail.

How to Write a Business Plan:

A business plan is a detailed document that provides an in-depth analysis and strategy for your SaaS venture. Here’s what it typically includes:

• Executive Summary: A brief overview of your company, including the mission statement, product description, and basic information about your company’s leadership team, employees, and location.
• Market Analysis: Detailed research on the industry, market size, and your competitors. This should outline who your target customers are, what they need, and how your product addresses those needs.
• Organization & Management: A breakdown of your company’s organizational structure, details about the ownership, profiles of your management team, and the qualifications of your board of directors.
• Product Line: Detailed descriptions of your product or service, including information on the product’s lifecycle and intellectual property rights.
• Marketing & Sales: Your strategy to attract and retain customers—this could be through online marketing, partnerships, or traditional advertising.
• Financial Projections: Forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets for the next five years.
• Appendix: Any additional information, graphics, or charts that supplement your business plan.

How to Write a Lean Plan:

A Lean Plan is a concise, dynamic document (typically one page) that highlights the essential components of your business without going into minute details. It’s particularly useful for startups looking to iterate rapidly. Here’s what it covers:

• Value Proposition : A clear statement describing the problem you’re solving, the solution, and the target customers.
• Key Partnerships and Resources: Who will you be working with, and what are the essential tools and resources for your business?
• Channels: How will you deliver your product to your customers?
• Customer Segments and Relationships: Who are your primary customers, and how will you interact with them?
• Revenue Streams: How will you make money? This can include subscription models, licensing, or affiliate partnerships.
• Cost Structure: A breakdown of the major expenses and where resources will be allocated.

The choice between a business plan and a lean plan will depend on your specific needs, the nature of your SaaS product, and the stage of your startup. Both are invaluable tools, but the lean plan’s flexibility makes it more suitable for businesses that anticipate frequent changes and rapid iterations.

Related resource: The SaaS Business Model: How and Why it Works

4) Choose Your Business Structure

Selecting the appropriate business structure is pivotal. This choice influences your day-to-day operations, how much you pay in taxes, your ability to raise funds, the paperwork you need to file, and your personal liability. Each business structure comes with its own advantages and disadvantages, and the ideal choice will depend on your company’s unique needs, your business goals, and your personal preferences.

Should You Form an LLC?

An LLC (Limited Liability Company) is a hybrid business entity that blends elements of partnerships and corporations. Here’s what you should know:

• Liability: One of the primary benefits of an LLC is that it offers limited liability protection to its members. This means personal assets, like your home or car, typically aren’t at risk if the LLC faces debts or lawsuits.
• Flexibility: LLCs offer flexibility in management and don’t require a board of directors or annual meetings.
• Taxes: Profits and losses pass through the business to the members, who report this information on their personal tax returns. This avoids the “double taxation” faced by corporations.
• Decision: If you’re looking for liability protection, taxation flexibility, and less rigid formalities, an LLC might be right for you. It’s especially favored by smaller SaaS startups.

Related resource: Fobes: Best LLC Services Of 2023

Should You Form a Sole Proprietorship?

A Sole Proprietorship is the most straightforward business structure, best suited for solo founders.

• Control: As the sole owner, you have complete control over the business decisions.
• Taxes : Income from the business is treated as personal income, and you’ll be responsible for all the taxes. There’s no distinction between the owner and the business.
• Liability: The major downside is unlimited personal liability. If the company incurs debts or is sued, your personal assets can be at risk.
• Decision: If you’re starting a small SaaS business on your own and are comfortable with the risks, a sole proprietorship might be a good fit. However, due to the liability concerns, many solo founders eventually transition to an LLC or corporation as the business grows.

Related resource: Sole Proprietorship: What It Is, Pros & Cons, Examples, Differences From an LLC

Should You Form a Corporation?

A Corporation is a more complex business structure that treats the business as a distinct entity separate from its owners.

• Liability: Shareholders (the owners) have limited liability. This means their personal assets are protected from company debts or legal actions.
• Taxes: Corporations face “double taxation.” The corporation itself pays taxes on profits, and shareholders also pay taxes on the dividends they receive.
• Raising Capital: Corporations can raise capital more easily by issuing stocks. This is often necessary for large-scale SaaS ventures that require significant investments.
• Formalities: There are more rigid requirements, like having a board of directors, annual general meetings, and more extensive record-keeping.
• Decision: If you plan to scale your SaaS company significantly or anticipate raising a lot of capital through investors, a corporation might be the best choice. It’s a common structure for larger startups aiming for significant growth or an eventual IPO.

The choice of business structure will significantly impact your SaaS company’s operations and growth potential. It’s essential to consult with legal and financial professionals to determine the best fit for your specific situation.

5) Test Your SaaS Idea: Will this Product Disrupt the Market?

Before diving headfirst into development and scaling, it’s imperative to validate your SaaS idea. The last thing you want is to invest time, resources, and money into a product only to realize there isn’t a sizable market demand for it. Engaging potential customers in conversations and conducting a competitive analysis will help you ascertain the potential of your idea and identify any gaps in the market or areas for improvement.

Chatting with Customers: This is your direct channel to understanding the needs, pains, and preferences of your target audience. By engaging with potential customers, you can get feedback on:

• Features they deem essential.
• The price they’re willing to pay.
• The challenges they face with current solutions.

These conversations can guide product development, pricing strategies, and marketing approaches.

Competitive Analysis: This helps you gauge the current market landscape. Who are the major players? What do they offer? Where do they fall short? How can your product fill the gaps or provide a better solution? Understanding your competition can give you a strategic edge and help refine your unique value proposition.

How to Conduct a Competitive Analysis Study:

• List Down Competitors: Start by identifying your direct competitors (those offering a similar solution) and indirect competitors (those solving the same problem but through a different method).
• Analyze Product Features: Break down the features of each competitor. Identify where they excel and where they lack.
• Customer Reviews: Dive into customer reviews on platforms like Capterra or G2 Crowd. These can provide insights into what users love and what frustrates them about existing solutions.
• Pricing Structures: Understand the pricing models of competitors. Are they subscription-based? One-time purchase? Freemium? This can help you position your product competitively.
• Brand Perception: How do competitors market themselves? What’s their messaging? Understanding their brand perception can help you differentiate and position your product.
• SWOT Analysis: Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for each competitor to have a holistic view of the competitive landscape.

Pro Tip: Use tools like SEMrush or Ahrefs to analyze competitors’ online strategies. These tools can reveal keywords they rank for, their content strategy, backlink profiles, and more. Leveraging this information can give you a competitive edge, especially in your digital marketing efforts.

By taking the time to validate your idea and understand the competitive landscape, you set the stage for a product that not only meets market needs but has the potential to disrupt and innovate within its space.

6) Create a Pricing Model for Your Service

The pricing model for your SaaS product isn’t just about determining a number; it’s a strategic decision that can influence your brand’s positioning, perceived value, and revenue streams. Too low, and you might be undervaluing your service or not covering costs, leading to financial strain. Too high, and you might deter potential customers. A well-considered pricing strategy ensures that you’re offering value to your customers while also achieving profitability.

How to Determine Price for Your Service:

• Cost-Based Pricing: At the most fundamental level, you need to cover your costs. Calculate the total cost of delivering your service, including development, hosting, support, marketing, and any other overhead. Ensure that the price you set covers these costs and leaves room for a healthy margin.
• Value-Based Pricing: Understand the value your service provides to your customers. If your software can save a company $50,000 a year in operational costs, they might be more than willing to pay $10,000 a year for it.
• Competitor Analysis: As discussed earlier, knowing what your competitors charge can provide a ballpark figure. If your software offers more features or better support, you might be able to charge a premium. Conversely, if you’re entering a crowded market and want to penetrate quickly, undercutting might be a viable strategy.
• Tiered Pricing: Offer multiple packages with different feature sets. This can cater to a broader range of customers, from small businesses to large enterprises. For instance, a basic package might offer core features, while a premium package might include advanced analytics or priority support.
• Freemium Model: Provide a basic version of your service for free and charge for advanced features or more extensive usage. This can be a way to get users in the door and upsell them later.
• Pilot Testing: Before finalizing your price, consider doing a soft launch or pilot test. Offer your service to a select group at a discounted rate in exchange for feedback. This can provide real-world insights into what customers are willing to pay.
• Feedback and Adjustments: Pricing isn’t static. Periodically gather feedback, monitor how your pricing affects sales, and adjust accordingly. Markets, competitors, and costs change, and your pricing strategy should be flexible enough to evolve.

Your pricing model is more than just a figure—it’s a reflection of the value you provide, the market you operate in, and the strategy you adopt. Approach it thoughtfully, and be prepared to iterate as you gather more data and insights.

7) Gather Customer Feedback & Focus on User Experience

The road to a successful SaaS company is not paved solely by a great product idea. It’s continuously refined by listening to your users and iterating based on their feedback. In the realm of software, a small usability hiccup can be the difference between a delighted customer and a frustrated one who churns. Emphasizing customer feedback and a stellar user experience (UX) is paramount in ensuring that your SaaS product isn’t just functional, but also enjoyable and intuitive.

Why User Experience is Important:

• First Impressions Matter: A user’s initial experience with your software can set the tone for their entire relationship with your product—and by extension, your brand. A well-designed, intuitive user interface can make users feel empowered, while a clunky, confusing one can lead to frustration.
• Reduction in Support Costs: A software that’s easy to use and navigate can significantly reduce the volume of support queries and tickets. This not only reduces operational costs but also leads to happier customers.
• Increased Retention Rates: Retaining customers is often more cost-effective than acquiring new ones. A great UX can lead to increased user satisfaction, resulting in higher retention rates.
• Enhanced Credibility and Trust: A polished, professional user interface can enhance your product’s credibility. Users are more likely to trust and continue using a product that appears well-designed and user-centric.
• Boost in Referrals: Delighted users are more likely to recommend your software to peers. Word-of-mouth referrals, often spurred by an exceptional user experience, can be a potent channel for organic growth.
• Feedback Loop: By actively seeking and implementing user feedback, you demonstrate that you value and listen to your customers. This not only helps improve your product but also fosters a deeper connection between users and your brand.
• Market Differentiation: In a crowded SaaS market, a superior user experience can set you apart from competitors. While features and pricing play a role, the ease and pleasure of using a software can be a significant differentiator.

User experience is the backbone of user satisfaction. By focusing on UX and actively seeking customer feedback, you position your SaaS product to not just meet user needs but to exceed their expectations. This proactive approach can lead to higher loyalty, increased referrals, and a strong market position.

8) Establish Your Brand & Make it Stand Out

In the vast sea of SaaS products, establishing a strong brand identity is crucial for recognition, recall, and emotional connection with your target audience. Your brand is more than just a logo or a catchy tagline; it’s the cumulative experience that customers have with your company, your product, and even your content. A well-crafted brand evokes trust, differentiates you from competitors, and gives potential users a clear sense of what you stand for and what they can expect.

Ways to Differentiate Your Brand from Your Competitors:

• Unique Value Proposition (UVP): Clearly define what sets your SaaS product apart. Is it unmatched customer support? Groundbreaking features? Exceptional affordability? Your UVP should be front and center in your branding and marketing efforts.
• Visual Identity: Consistent use of colors, fonts, and design elements can make your brand instantly recognizable. This consistency should extend across your website, product interface, marketing materials, and social media platforms.
• Brand Voice and Personality: Whether it’s professional, playful, or somewhere in between, the tone and style of your content can give your brand a distinct voice. This includes everything from website copy and blog posts to email campaigns and social media updates.
• Content Leadership: Sharing valuable content that addresses user pain points or industry trends can position your brand as a thought leader. This not only attracts potential users but also establishes trust and credibility.
• Community Engagement: Engaging with your user community through forums, social media, or user groups can help foster loyalty and give users a sense of belonging. This engagement can also provide valuable insights and feedback.
• Customer Success Stories: Showcase testimonials, case studies, and success stories. Real-world examples of how your product has benefitted users can resonate deeply with potential customers.
• Ethical Practices and Values: In an age where consumers are more conscientious about the brands they support, showcasing your company’s commitment to ethical practices, sustainability, or community involvement can make you stand out.
• Exceptional Customer Service: Often, the post-purchase experience is what users remember most. Offering stellar customer service can turn users into brand advocates.
• Continuous Innovation: Regularly updating your software with new features, improvements, or addressing pain points can show users that you’re committed to offering the best product possible.
• Interactive Branding Elements: Tools like quizzes, interactive infographics, or branded games can make your brand memorable and provide value at the same time.

While the SaaS market is crowded, there’s always room for brands that resonate, provide value, and stand out. Differentiating your brand is not about being different for the sake of being different; it’s about genuinely understanding your target audience, what they value, and delivering that in a way that’s uniquely you.

9) Start Your Fundraising Journey

Launching and scaling a SaaS company often requires capital – for product development, hiring talent, marketing, infrastructure, and other operational expenses. While some entrepreneurs manage to bootstrap their startups, many look for external funding to fuel their growth. The fundraising route you choose should align with your company’s goals, the stage of your business, and your personal preferences. Here’s a breakdown of popular fundraising options:

Should You Pitch an Angel Investor?

Angel Investors are affluent individuals who provide capital to startups in exchange for ownership equity or convertible debt. They often invest their own money, unlike venture capitalists who manage pooled funds from many investors, and limited partners (LPs).

• Flexibility: Angel investors, being individuals, might offer more flexible terms compared to institutional investors.
• Mentorship: Many angel investors are former entrepreneurs themselves and can provide valuable advice and connections.
• Speed: The process can be faster than traditional venture capital fundraising.
• Limited Funds: Angel investments are typically smaller than venture capital rounds.
• Due Diligence: As with all investors, angels will scrutinize your business model, which might extend the fundraising timeline.

Should You Pitch Venture Capitalists?

Venture Capitalists (VCs) are professional groups that manage pooled funds from many investors and LPs to invest in startups and small businesses. They typically come in when you have a proven business model and are looking to scale.

• Larger Investments: VCs can invest significant amounts, often millions, allowing for rapid scaling.
• Expertise and Network: Established VCs bring industry connections, mentorship, and expertise.
• Credibility: Securing VC funding can enhance your startup’s credibility in the market.
• Equity Sacrifice: VCs often ask for a considerable stake in your company.
• Loss of Control: With a significant stake, VCs might influence company decisions or direction.
• Pressure: VCs expect a return on their investment, often pressuring companies for rapid growth.

Is Bootstrapping Right for Your Company?

Bootstrapping refers to starting and growing a business without external investment or financing. Entrepreneurs rely on personal savings, revenues, or other organic sources to fund their venture.

• Full Control: Entrepreneurs retain complete control over their business decisions and direction.
• Ownership: No dilution of equity since you’re not bringing in external investors.
• Flexibility: You can pivot or change direction without external pressures.
• Limited Resources: Growth might be slower due to resource constraints.
• Financial Risk: Personal assets might be at risk if the business doesn’t succeed.
• Missed Opportunities: Lack of funds might mean missed market opportunities or being outpaced by funded competitors.

The fundraising path you choose is a strategic decision. It’s essential to weigh the pros and cons of each option, considering both the immediate needs and long-term vision for your SaaS company. Remember, the goal is not just to raise funds but to build a sustainable and successful business.

10) Develop or Start Building Your Service

While a solid idea and funding are foundational, they’re just the beginning. The heart of your SaaS venture is the service itself. At this step, you bring your vision to life, transforming concepts and wireframes into functional, user-friendly software. This stage requires meticulous attention to detail, continuous collaboration between teams, and an unwavering commitment to user needs.

Best Practices for Building Your Service:

• Start with MVP (Minimum Viable Product): Begin with a simplified version of your service that incorporates the core features. This allows you to test the market, gather feedback, and iterate before investing more time and resources.
• Prioritize User-Centered Design: Ensure your service is designed with the end-user in mind. Prioritize intuitive navigation, clear call-to-actions, and an aesthetically pleasing interface.
• Continuous Testing: Regularly test your software for bugs, performance issues, and usability hiccups. This includes unit testing, integration testing, and user acceptance testing.
• Adopt Agile Development: Using agile methodologies allows for iterative development, regular feedback loops, and the flexibility to pivot when needed.
• Invest in Security: Ensure that your software is secure and compliant with relevant regulations. Regularly update and patch your systems, and consider third-party security audits.
• Cloud Integration: Consider building your service to be cloud-compatible, ensuring scalability, and reducing the need for significant infrastructure investments.
• Feedback Loop: Keep channels open for user feedback even during development. This ensures that any design or functional misalignments are caught early.
• Documentation: Maintain thorough documentation for your service, both for internal use (for developers and support teams) and external use (for users). This aids in training, troubleshooting, and user onboarding.
• Stay Updated with Tech Trends: The tech landscape is ever-evolving. Be open to adopting new tools, technologies, or methodologies that can improve your service’s functionality or user experience.
• Collaborative Approach: Foster a collaborative environment where designers, developers, marketers, and other stakeholders frequently communicate and align on objectives.

Building your SaaS service is an exciting, dynamic process. It’s where vision meets reality. By following best practices and maintaining a user-centric focus, you can ensure that your service not only meets but exceeds market expectations. As you roll out your service, remember that continuous improvement, based on real-world feedback and technological advancements, will be key to long-term success.

11) Create a Go-To-Market Strategy

The culmination of your ideation, development, and preparation efforts rests heavily on the effectiveness of your go-to-market (GTM) strategy. This is the blueprint that will guide how you introduce your SaaS service to the market, acquire customers, and scale your business. Without a well-thought-out GTM strategy, even the most innovative product might struggle to gain traction or achieve its potential.

What is a Go-To-Market Strategy?

A go-to-market strategy is a comprehensive action plan that outlines how a business will sell its products or services to customers. It defines the target audience, details the value proposition, and lays out the sales and marketing tactics the company will employ to achieve its goals. In the SaaS realm, a GTM strategy is especially vital given the competitive nature of the market and the unique challenges and opportunities presented by software subscription models.

How to Create a Go-To-Market Strategy:

• Define Your Target Audience: Understand who your ideal customers are. Create detailed buyer personas based on demographics, job roles, pain points, and purchasing behavior.
• Clearly Articulate Your Value Proposition: Clearly define what sets your SaaS product apart from competitors. What problem does it solve? Why should customers choose your product?
• Choose Your Distribution Channels: Decide where and how you’ll sell your product. This could be through a direct sales team, digital channels, partnerships, or a combination of multiple channels.
• Pricing Strategy: Based on market research, competitors, and perceived value, decide on a pricing model. Will you offer tiered pricing, freemium models, or one-time licensing?
• Promotion and Marketing: Outline your marketing campaigns. This includes content marketing, PPC advertising, social media marketing, email campaigns, and more.
• Sales Strategy: If you’re using a direct sales approach, how will you structure your sales team? What will be their pitch? Will you use inbound or outbound sales strategies, or both?
• Customer Onboarding: Consider how you’ll introduce new users to your product. This could involve tutorials, webinars, documentation, or in-app guides.
• Feedback Mechanism: Ensure there’s a system for collecting feedback from early users. This will help in iterating and improving your product.
• Scale Strategy: Plan for growth. How will you handle increased demand? What’s the strategy for entering new markets or segments?
• Regular Reviews: Continuously review and refine your GTM strategy based on performance metrics, feedback, and market changes.

Creating a compelling go-to-market strategy is a mix of art and science. It demands a deep understanding of your market, a clear vision for your product, and the agility to adapt as you learn from real-world execution. Remember, the landscape is dynamic, and while a GTM provides direction, it should never be set in stone. Flexibility and responsiveness to change are paramount to long-term success.

12) Determine KPIs to Measure Growth & Success

While your SaaS product might be top-notch and your go-to-market strategy well-defined, without the right metrics to track progress, you’re navigating the expansive seas of business without a compass. Key Performance Indicators (KPIs) act as this compass, allowing businesses to measure, analyze, and assess the success of their operations and strategies. KPIs enable businesses to make informed decisions, rectify shortcomings, and capitalize on strengths.

Related resource:

• Our Ultimate Guide to SaaS Metrics
• How To Calculate and Interpret Your SaaS Magic Number

KPIs That Measure Success:

• Monthly Recurring Revenue (MRR): This is the total revenue your SaaS business can expect to receive every month. It’s a pivotal metric for any subscription-based service.
• Annual Recurring Revenue (ARR): A projection of your MRR over a year, providing insight into your yearly revenue from subscriptions.
• Customer Acquisition Cost (CAC): The average amount spent to acquire a new customer, encompassing marketing, sales expenses, and any other related costs.
• Lifetime Value (LTV): An estimate of the total revenue a business can expect from a single customer account throughout their subscription.
• Churn Rate: The percentage of subscribers who stop their subscriptions within a certain time frame. A lower churn rate is indicative of customer satisfaction and product viability.
• Net Promoter Score (NPS): A measure of how likely your customers are to recommend your product to others. A high NPS typically signifies high customer satisfaction.
• Active Users: This can be daily active users (DAU) or monthly active users (MAU). It helps gauge the engagement and stickiness of your product.
• Customer Retention Rate: The percentage of customers you retain over a specific period, excluding new customers.
• Sales Conversion Rate: The percentage of leads or potential customers who end up making a purchase or subscribing to your service.
• Average Revenue Per User (ARPU): The average revenue generated from each active user. It provides insights into how much value each user brings to the business.
• Feature Usage: A metric to identify which features of your SaaS product are most and least used. It’s invaluable for future development and iterations.
• Support Tickets & Resolution Time: The number of support tickets raised by users and the average time taken to resolve them, indicative of product stability and customer service efficiency.

Establishing, tracking, and analyzing these KPIs provide a granular view of your SaaS company’s health, growth, and customer satisfaction. They act as early warning systems for potential problems and as validation of successful strategies. Ultimately, while there are many KPIs to consider, it’s crucial to focus on those most aligned with your business goals and objectives, ensuring that you’re always moving in the right direction.

Start Your SaaS Fundraising Journey with Visible

From ideation to development, and from market entry to growth measurement, building a successful SaaS company is a journey of many pivotal steps. Every phase holds its unique challenges and rewards. And while our guide has aimed to arm you with the foundational knowledge to navigate this voyage, one of the most crucial aspects is securing the necessary funding.

Fundraising can be complex, but with the right partner, it can become considerably more manageable. That’s where Visible steps in. As a platform designed to streamline and optimize the fundraising process, Visible offers tools, insights, and connections that can be invaluable for budding SaaS entrepreneurs.

Ready to kickstart your fundraising journey? Discover how Visible can be the partner you need in turning your SaaS vision into a reality. Try Visible for free for 14 days .

How to Create a SaaS Product Strategy

Discover how to create a robust SaaS product strategy and steer your teams to success. Your roadmap to growth starts here with our comprehensive guide.

What is a SaaS product strategy?

Why is a saas product strategy important, the benefits of a robust saas product strategy, challenges in creating a saas product strategy, saas product strategy example: hubspot, crucial elements of a saas product strategy, tips for a saas product strategy framework, amplitude: the key to a successful saas product strategy.

A SaaS product strategy outlines the “what,” “how,” and “who” of your product.

• What you’re going to develop.
• How you plan to market and sell it.
• Who you’re hoping to attract.

It typically covers product development, distribution, pricing, customer engagement, and more, depending on your size and product type.The strategy explains how you will approach each aspect to achieve your objectives and meet customer needs.

SaaS product strategies vary between organizations. In other words, there’s no one-size-fits-all approach.

What performs for one product type may be less effective for another, especially across industries and for companies with specific goals.

We instead recommend adapting and evolving your product strategy to respond to changing market conditions and customer behavior —a valuable method for navigating a dynamic sector.

Product Differentiation - Product-Led Growth - Product Adoption - Product Development

There’s nothing more valuable l than a well-thought-out plan, and a product strategy is precisely that.

In the SaaS industry, these plans take on another level of importance. They’re the guiding light for your product managers and surrounding teams, providing vital frameworks for achieving success.

Let’s break down precisely why they’re so crucial.

It helps define a niche

A clear SaaS product strategy establishes your product’s target market, where you’re looking to complete, and the niche you wish to enter.

You can use this information to design your product to meet specific customer needs, improving relevance and appeal.

With a defined strategy, you ensure your product solves a particular problem so it can effectively find its place in the market.

Supports the product roadmap

A product roadmap outlines your product’s planned features and enhancements, and your product strategy provides its overarching vision and direction.

Your roadmap ensures product development aligns with your company’s long-term goals and evolving market needs.

Streamlines the teams in your business

A sound SaaS product strategy helps steer cross-functional teams. It ensures everyone works towards common objectives, enables effective resource allocation, and avoids silos and conflicting priorities.

Everyone benefits when you follow a solid plan—except your competition, of course. Customers receive a stellar product, teams work harmoniously, and stakeholders enjoy continued success.

A robust SaaS product strategy is the starting point for achieving this.

Here are some of the advantages of implementing one.

Provides a clear plan

A product strategy details your company’s vision, goals, and the path to achieving them. It provides a clear plan that helps your organization understand where the product is going , why you’re making certain decisions, and the desired outcomes. This clarity fosters alignment and purpose across the business.

Supports creating a product roadmap

The product roadmap sets the product’s development trajectory. A strong product strategy is the foundation for this roadmap, guiding the prioritization of features, enhancements, and updates. It ensures the roadmap aligns with your overall strategy and addresses customer needs.

Identifies potential issues

As you develop your product strategy, you complete comprehensive market research and competitive analysis, and in doing so, identify potential obstacles your product might face in the market. By proactively addressing these challenges as part of your strategy, you can develop mitigation plans and avoid costly surprises later.

Streamlines the process for various teams

Several teams are involved with a product’s creation and launch . A product strategy provides a common understanding of the product’s purpose and direction to align each team’s efforts. Teams can streamline activities and work cohesively towards shared goals, reducing friction and inefficiencies.

Creating a SaaS product strategy can be thrilling—you’re looking ahead to the future and imagining the impact your product could have.

However, crafting a masterpiece requires time, patience, and an awareness of specific challenges. In simpler terms, it’s not always straightforward.

To help make it easier, we’ve outlined things to consider before embarking on your strategy creation journey.

Market research

Conducting detailed market research can be time-consuming and resource-intensive, so you’ll want to ensure your efforts are well-spent.

Invest in thorough research and gather data from multiple sources. Use customer surveys, interviews, and competitive analysis to understand the market deeply—you’ll rely on this information to make crucial decisions.

Competition

Identifying and analyzing competitors' strengths, weaknesses, and strategies can be challenging. Staying ahead of or differentiating from competitors is also a constant concern.

Continuously monitor the competitive landscape to keep up with what’s happening in your industry. Conduct regular competitor analysis and SWOT (Strengths, Weaknesses, Opportunities, Threats) assessments, and be prepared to adapt your strategy if needed.

Continuous innovation

SaaS products need to evolve continuously to stay relevant. Balancing the need for innovation with maintaining product stability and reliability can be difficult.

Implement agile product development processes that enable iterative improvements and establish customer feedback loops to spot areas for innovation, prioritizing features based on customer value.

Customer acquisition and retention

Acquiring new customers in a competitive market can be costly, and retaining existing customers is vital for long-term success.

Attract users by developing a customer acquisition strategy that covers marketing, sales, and customer onboarding. Focus on providing excellent customer experiences and support to improve retention rates and reduce churn .

Resource allocation

Allocating resources—like budget, time, and talent—to support your product strategy can be challenging. Juggling short-term needs with long-term goals is often a dilemma.

Prioritize initiatives based on their alignment with your overall strategy and potential impact. Regularly review resource allocation to ensure it syncs with evolving priorities and market dynamics.

HubSpot is a great example of an effective SaaS product strategy in action.

The inbound marketing and sales platform has over 184,000 customers and achieved a YoY revenue growth rate of 33% in 2022—a sign its product strategy is paying off.

HubSpot bases this strategy on a deep understanding of customer needs, using its feedback tool, “HubSpot Ideas,” to prioritize product enhancements.

User comments have led to enhanced email marketing elements, data reporting features, and more. Following feedback, customers can now access user-friendly tools, in-depth insights, and customization options.

HubSpot applied essential product strategy frameworks , like customer listening and market monitoring, to implement productive processes and reap the rewards.

As we’ve mentioned, no two product strategies are the same—it’s part of what makes them adaptable and broadly applicable.

However, most SaaS product strategies share some crucial similarities. To set yourself up for maximum success, we recommend incorporating and considering the following elements.

Data is the cornerstone of an effective SaaS product strategy. It includes quantitative data , like metrics, user analytics , and market research, and qualitative data , like user feedback and surveys. This data informs decision-making at every stage, from product development and feature prioritization to marketing and customer support.

Comprehensive information

A thorough market understanding is essential, including customer needs, pain points, and trends. Comprehensive information helps you make informed choices about product positioning, target audience, market differentiation, and more.

You’ll also need to know your competitors' strategies, strengths, and weaknesses to decide how to make your product stand out.

Adaptability

The SaaS landscape constantly changes with evolving customer preferences, technological advancements, and market conditions. A successful SaaS product strategy must embrace change and adapt to new information and circumstances.

Allow for iterative development and improvement, flexibly evolving your product to incorporate user feedback and respond to market shifts. Being willing to adjust course when needed is vital to sustainable success.

Effective SaaS product strategies require team collaboration. Communication and alignment between teams are essential to execute the strategy cohesively.

Team members should have a shared understanding of your product strategy and its goals. This shared vision creates a sense of ownership and commitment, driving teams to work together towards common objectives.

By now, you’re hopefully feeling fired up and ready to start creating your own SaaS product strategy framework.

However, before you embark on this process, we have one final piece of wisdom to share—our top framework tips.

With these under your belt, you’ll be on your way to crafting a winning strategy and leading your team (and product) to a prosperous future.

Create a vision and plan for your product

Start by defining a clear vision for your product that outlines your long-term goals and the impact you want your product to have on customers and the market.

Develop a strategic plan that breaks down how you’ll achieve this vision. Consider the steps, milestones, and key initiatives needed to move from your current situation to where you want your product to be.

Assess where you are right now

You need to know where you are to understand how to get where you’re going. Assess your current product, market position, and existing customer base. This assessment helps you understand your starting point and identify strengths, weaknesses, opportunities, and threats.

Research your customers

Gather data on your target audience, including their needs, issues, behaviors, and wants. Develop customer personas to create a more detailed understanding of them.

Continuously gather feedback through surveys, interviews, and user analytics to stay attuned to their evolving needs.

Determine how to position your product

Outline your product’s unique value proposition. What sets it apart from competitors? How does it satisfy customers better than alternatives?

Develop clear positioning and messaging that communicate your product’s value to potential users.

Set and measure your goals

Establish specific, measurable, achievable, relevant, and time-bound (SMART) goals for your product. These should orient your vision and strategic plan.

Identify key performance indicators (KPIs) that will help you measure progress, and track and analyze these regularly.

Monitor your competitors

Continuously assess the competitive environment—find your direct and indirect competitors, analyze what they’re doing, how well they do it, and what could be better.

Use this competitive intelligence to refine your product strategy, differentiate your product, and identify new opportunities.

Keep a pulse on the market

Market awareness enables you to adapt your strategy in response to changing conditions. Stay informed about market trends, new technologies, and shifts in customer behavior.

You should also be open to exploring other market segments or expansion opportunities if they align with your strategic goals.

Create your roadmap

As mentioned, your product roadmap shares the specific features, additions, and initiatives you want to implement and should align with your product strategy.

Prioritize roadmap items based on their importance, customer impact, and strategy alignment. You can use frameworks to help you do this, such as the MoSCoW method (Must-haves, Should-haves, Could-haves, and Won’t-haves).

Establish timelines for each item, accounting for flexibility as things change. Share the roadmap with internal teams, stakeholders, and customers if appropriate to give all relevant stakeholders visibility into your product’s future direction.

A robust product strategy is fundamental to business success, especially in the competitive SaaS landscape.

Crafting and executing against your strategy requires data-driven decisions and insights—that’s where Amplitude comes in.

Amplitude empowers SaaS companies with the right tools to make informed, data-backed choices. Using its user analytics and product intelligence capabilities, you can better understand user behavior, spot product strengths and weaknesses, and uncover growth opportunities.

Whether refining your user acquisition, optimizing onboarding , or enhancing product features , Amplitude provides the insights needed to align your SaaS product strategy with your customers’ needs.

Don’t just build a strategy—build a data-driven strategy.

Ready to drive innovation and achieve your vision? Get started with Amplitude today .

Other Product Guides

• What is Product Adoption?
• What is Product-Led Growth?
• What is Product Development?
• What is Product Differentiation?

The SaaS factor: Six ways to drive growth by building new SaaS businesses

Many companies have a growth challenge: They expect to get as much as 50 percent of their revenue from new businesses and products by 2026 but are not on a path that will take them there. Among the strategies nontech incumbents should consider is taking a close look at developing software-as-a-service (SaaS) products.

We know from our previous work that one of the most important factors in driving growth is operating in a sector or area that’s growing. SaaS checks that box. The global SaaS market is currently worth about $3 trillion, and our estimates indicate it could surge to $10 trillion by 2030. The median revenue growth rate of 100 public SaaS companies in the United States with revenues above $100 million was 22 percent as of mid-2021, with the top quartile’s growth rates above 40 percent .

There’s a lot to like about SaaS beyond its revenue potential. For one thing, the asset-light nature of SaaS means it has lower overhead and logistical costs than physical products. Second, it frees traditional companies from doing some of the most complicated technical work by themselves—they can partner with major cloud service providers. And third, since software at its core is a series of 1s and 0s, it’s easy to scale, especially when combined with the cloud’s extensibility and elasticity.

As exciting as the SaaS new-business-building opportunity is, however, nontech incumbents aren’t set up to transform themselves quickly into SaaS operators. In fact, these companies’ long-standing practices in product management, funding, governance, and performance management may be hindrances to launching SaaS businesses.

Our experience in helping more than 20 nontech incumbents build new SaaS businesses highlights six key areas they should focus on to succeed.

1. Innovate through rapid test-and-learn cycles

Leap by mckinsey.

Leap by McKinsey works with established organizations to imagine, build, and scale new businesses—and develop the capabilities needed to do it again and again. We bring together a global network of experts to build dynamic, innovative businesses that can reinvigorate entire organizations.

Learn more about Leap by McKinsey .

Large incumbents have for years honed tried-and-true processes for product development that have served many of them well. But those approaches are not always well suited for the faster learn-and-adapt cycles that are the foundation of innovation at successful software companies and core to SaaS product development. Like any good product or service development, it’s crucial to start with the customer.

While many incumbents have a strong understanding of their customers, they often lack the creativity to translate that understanding into innovation. Their approaches often focus on “how to improve X” rather than on completely rethinking “how to create Y.” This is partly why they have proven so vulnerable to start-ups. Incumbents often treat customer data as “inputs” that are translated into requirements and only infrequently consult the customers themselves. Innovators, however, go deep on understanding pain points and work much more closely with customers along the development journey, from testing and adjusting minimal viable products (MVPs) with real customers to co-creating products with them. For B2B solutions, getting feedback from the first four to five customers is particularly valuable because it amplifies the customer voice in shaping the product by defining customer needs before the product is launched broadly.

The key point in enabling this more iterative and collaborative approach is to bring software engineers, data scientists, and designers into the ideation process from the very beginning. They are then on hand to not only get a much deeper appreciation of customer needs but also rapidly adjust the prototypes based on real customer feedback. These test-and-learn cycles can take as little as a day and should be driven by a “fail-fast” ethos.

The Washington Post Company embraced this co-creation approach when it decided to offer its proprietary content-management system, Arc XP, as a SaaS product. It first offered it for free to about ten universities, both to understand how they each wanted to use it and to determine what would be required to support it for each institution. As it learned how to support multitenant architectures and resolve customer issues, it started working with increasingly larger players, including Canada’s Globe and Mail , which committed to working with the Post’s developers to improve the product. 1 Peter High, “How the Washington Post made its publishing platform a revenue driver,” Forbes , April 29, 2019. The Arc XP platform now powers more than 1,900 sites around the world, reaching more than 1.5 billion unique users each month.

Would you like to learn more about our business-building practice, Leap by McKinsey ?

2. capitalize on existing digital and data assets.

One of the biggest assets nontech incumbents have is their own data and digital tools. However, they are not always aware of this and, indeed, sometimes take quite a narrow view of the value potential in digital assets they own. A maker of construction equipment, for example, might see its data as merely an aid to internal reporting instead of as a proprietary asset that can generate significant revenue. An insurance company may send out ad hoc reports or analyses that could instead be enhanced, automated, and turned into a SaaS product.

This too-narrow focus is reflected in the fact that most nontech companies don’t have a clear and comprehensive view of their data. Some of it may be under the control of IT teams, while, in other cases, operations manages it. This is a missed opportunity. Top companies look across all their digital and data assets to identify those that aren’t readily available in the marketplace but meet a specific customer need. This review is a creative business process—not finding something that already exists but imagining something completely new—to identify possibilities and courses of action. In some cases, for example, it requires assessing data gaps and how to fill them by adding data from the outside, or implementing smart devices to generate the data that’s missing. The leadership of a data strategist and product manager is generally necessary to get to this level of sophistication.

Anheuser-Busch InBev (AB InBev) saw an opportunity to create a new SaaS business on the back of its existing millions of data points, from its logistics and distribution networks to its customers’ purchasing habits. It launched a B2B SaaS e-commerce platform called BEES, a partner portal that small and medium-size retailers can access by an app to do a range of tasks, from ordering products to tracking customer preferences locally to monitoring the delivery of their orders. BEES also uses machine learning based on customers’ previous interactions with AB InBev to provide personalized recommendations through “suggested order” features. Launched in 2020, the platform is live in 17 markets, with 2.7 million monthly active users as of Q1 2022.

3. Plan for scale from day one

While the digital nature of a SaaS product allows it to scale much more quickly than other products, that advantage can be captured only when companies put in place two key elements:

• A dynamic and detailed road map. SaaS product road maps differ from the typical road map in that they incorporate much more flexibility and rapid turnarounds. Tracking progress happens daily in many cases, with leaders reviewing what pivots, if any, are necessary and what to test next. This allows teams to course correct quickly and build momentum. SaaS product road maps also have explicit plans for feature innovation based on specific key performance indicators (KPIs), an important element for customers who want to know that the product they’re buying will not just be supported but will continually get better. The road map should also explicitly lay out how to grow beyond the first five or ten customers, which are often existing relationships and might not provide a full representation of the larger marketplace. That means identifying multiple new customer segments, based on feature and functionality needs as well as their willingness to pay. Johnson Controls has taken this approach with OpenBlue, the digital platform that it launched in 2020. The 137-year-old company created a road map that laid out a vision for launching a suite of connected solutions that enable services, including clean air, energy optimization, and advanced safety monitoring. By thoughtfully and deliberately sequencing the solutions it rolls out so that it can build on previously developed capabilities, the company has been able to expand the range of services it offers to customers. 2 “Johnson Controls launches OpenBlue,” Johnson Controls, July 31, 2020.
• Flexible technology architecture. For a SaaS product to be able to continually evolve and grow, companies need to put in place a technology architecture that scales. Human-capital-management software provider Workday focused from the beginning on separating out its platform development from its application development so it could scale. This allowed it to continue to iterate on applications even when it had to make changes at the platform level, enabling the business to grow and scale quickly. This means building around microservices and APIs that create simple and well-defined interfaces to data, algorithms, and processes. This is what enables teams to quickly swap out features. Partnering with the right hyperscaler to take advantage of platform as a service (PaaS), including services such as data and AI, and infrastructure as a service (IaaS) is a critical component of scaling the infrastructure. To take advantage of cloud , nontech companies must develop capabilities in “CloudOps” (cloud operations) to deliver, adjust, optimize, and manage the performance of workloads and services that run in the cloud. Incumbents will also need to master FinOps (financial operations) to track and manage consumption, storage, and network costs, which can vary significantly from on-premises models.

SaaS, open source, and serverless: A winning combination to build and scale new businesses

4. target talent by going deeper and wider.

Finding good SaaS talent is a well-known challenge, especially for critical roles such as product managers, software developers, and data scientists. There is simply not enough supply to keep up with accelerating demand, which is driven by competition from software companies and nontech companies going through digital transformations.

To better compete for talent, nontech incumbents can shift and expand their current talent sources. Getting involved with communities such as GitHub or open-source communities and arranging hackathons, for example, can attract different kinds of tech talent. Some companies have turned successfully to coding competitions to identify prospective job applicants.

Others are combining databases of talent information (such as those from colleges and career portals) and using analytics to help identify trends in skills to better anticipate needs. Still others are identifying relevant current employees for upskilling, while the most progressive firms are partnering with workforce-development companies to identify often overlooked workers who have aptitude and ambition but lack access to traditional pathways.

The other important factor in finding the right talent is to target traits, not just skills. Our research has shown that successful software developers are mission driven and have a passion to build things that end users want rather than just “work on platforms.” Nontech companies have found success by focusing on candidates with a deep interest in the company’s sector—healthcare, aerospace, or energy, for example—and the work the company does. This approach helps avoid direct competition with Silicon Valley businesses.

To make themselves more attractive to the best talent, companies need to update their employee value proposition to emphasize, for example, variable and tailored career paths, use of advanced cloud-based coding practices, and opportunities for people to build their skills and networks.

5. Orient pricing and selling around product usage

The ability to integrate tracking mechanisms at almost every feature level in a SaaS product allows companies to understand the value of a given feature based on how it’s used, which is a big difference from the typical product or service. With these insights, companies can then be much more targeted and flexible about pricing based on customers’ feature needs and usage—essentially, on how much the customer values that feature. That brings possibilities of subscription pricing, cost per use, cost by volume of usage, cost by time of day, cost based on value the customer captures, and so on. By the same token, companies can tailor or create SaaS product features to be responsive to customers, even easily testing and trialing them to see how customers actually respond. Some human-capital software providers, for example, tie their pricing to employee satisfaction or experience.

In this way, companies can be much more responsive to their customers’ actual needs while also opening up new revenue streams. In fact, leading SaaS businesses put as much attention into caring for existing customers as they do into acquiring new ones. For this reason, they also invest heavily in customer-success managers, who provide their customers with support throughout the entire sales process and help ensure a successful customer experience.

To support this more flexible model, companies need to train their sales reps to sell differently. Many sales reps are offered incentives to sell products, but compensation instead needs to be tied to actual software consumption by their customers. New training, product collateral, support, and digital-product demos need to be developed with a clear eye on customer preferences. McKinsey research indicates, for example, that eight in ten B2B decision makers say that omnichannel is as or more effective than traditional methods, which means salespeople need to know when to engage with customers directly and when to offer them digital options.

6. Protect the funding, and focus on leading growth metrics

Every new business needs dedicated funding. Companies tend to expect particularly fast results from SaaS businesses, however, and when they don’t materialize, the temptation is great to pull back funding. Patience and continued support are needed, which is why it is crucial to protect funding and tie it to performance.

Making this work requires companies to step away from some of their established capital-commitment yardsticks, which are usually focused on lagging indicators, such as margin and revenue. In SaaS, in order to avoid stifling the budding business line, it’s crucial to use growth-oriented leading indicators, such as number of interested partners, the volume of interested leads, and the success rates of concept tests. One of the most important metrics to track, in fact, is net retention .

Some companies have turned to external partners for capital and expertise. Besides helping to spread risk, this approach brings in an external voice with additional experience to push the SaaS business forward and guard against loss of focus.

Launching new SaaS businesses needs to become a priority for nontech incumbent companies looking for new sources of growth. Their existing capabilities, expertise, and position in their own markets give them a great head start. To succeed, however, incumbents need to understand and embrace the unique needs of SaaS products.

Chandra Gnanasambandam is a senior partner in McKinsey’s Bay Area office. Ari Libarikian is a senior partner in the New York office, where Cem Turkeli is an associate partner.

The authors wish to thank Todd Horst, Ayush Jain, and Sid Tandon for their contributions to this article.

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SaaS Product Development Strategy and Business Plan

Last Updated: Mar 29, 2024 by PESTLEanalysis Contributor Filed Under: Business

SaaS product development providers are working hard to develop authoritative solutions for businesses looking to enter the SaaS market in order to keep up with these market trends. Moreover, cloud services have proven increasingly beneficial during the pandemic as they have enabled business continuity when many operations had to stop. SaaS developers can create a comprehensive SaaS development stack with the right hosting technology, database engine, and programming frameworks that foster innovation and scalability for success in the long run. However, all this becomes possible only with the right strategy and a professional business plan. This includes some key aspects that you need to pay attention to.

Steps to Building a SaaS Product Development Strategy and Business Plan

To make product strategies a success, SaaS companies should set a meaningful vision and North Star. By this, they can assess know what goal they are aiming for and work towards it in an organized manner. To ensure that the desired outcome is achieved, they can apply behavioral science to their decision-making process by analyzing customer interactions, feedback, and insights. To ensure accountability for the plan’s successes or failures, SaaS companies need to measure results-oriented metrics based on customer behavior.

#1: Set the Right Goal

A successful Saas product strategy starts with a clear vision, which is the measurable world that we want to create. It’s not enough to just create a vision; having an understanding of the North Star Metric is key in order to measure the value your customers receive from your SaaS service. A clear vision can suggest which tactics are going to drive desired outcomes and help create valuable customer experiences.

Your North Star should be specific, measurable, and supportive of overall company goals so it can be used to motivate team action and work towards measurable progress. It’s important that your North Star reflects what success looks like on an individual level as well — you can use it as a motivational tool to keep employees focused on the bigger picture.

Based on what you should choose your project goal:

• Measure customer value. One of the most important things you can do to measure customer value is to align your product with its vision. Identify what it takes for a user to achieve the target level of service interaction and use that as a metric for gauging success.
• Leading revenue forecast. You should not put income as a guiding star, because this indicator is very far behind. It is worth estimating revenue based on the key user action that ultimately leads to revenue.
• Looking at revenue can be useful, but it is a lagging indicator, so consider using a product outcome that will eventually lead to revenue instead.

Selecting appropriate input metrics is vital to get the most out of your North Star. Input metrics are critical indicators of your current performance and typically lead to the ultimate outcome, influencing your final score and winning strategy — each quantifying success one benchmark at a time.

#2: Creating a Strategy

Setting a strategy to reach the North Star is an important step.

Measuring input metrics, such as breadth, depth, frequency, and efficiency will help you understand if you are on the right path.

What are we talking about:

• Latitude – the number of returning and regularly active users.
• Depth – how deeply users interact with your product.
• Frequency – how often the user uses the service.
• Efficiency – the speed at which a user achieves a goal.

Having more active/returning users taking action is important for breadth, while depths look at their engagement levels. Frequency measures how often each user takes this action. Lastly, understanding how efficiently a user is allows you to determine if the strategy effectively achieves the desired goal. By breaking down your North Star into these four metrics and analyzing them together, you can get a clear picture of how far along you are and make informed decisions to achieve product vision.

Product strategy examples:

• Spotify . The breadth for them is active listeners as well as premium subscribers and free users. Depth – how much time users spend in one session. Frequency – the number of sessions per week. All activities of the company revolve around these parameters.
• Netflix . For them, breadth is the number of subscribers, depth is the duration of viewing, and frequency is the regularity of viewing. The subscription price increase in 2022 resulted in a churn of 200,000 users and a projected decrease in the number of active users by another 2 million in 3 months. The competition should be noted here, but nevertheless, this decision turned out to be repulsive for users. That is, a price reduction could lead to an increase in the number of users.

#3: Measuring Results

Companies who are looking to grow product-led must do so with results in mind. Directly measuring success through an objective measure is key – and that’s why Objectives and Key Results (OKRs) can be incredibly helpful for a SaaS . However, it is important to approach implementing OKRs with the right mindset – objectives should be the driving factor first, with key results helping to measure whether or not you’re on the right path. When working to facilitate product-led growth, this is an essential piece of information that must never be forgotten.

When it comes to evaluating product experiments and measuring OKRs, not all companies should subscribe to a once-a-quarter approach. While it’s undoubtedly convenient, it doesn’t always make sense for the type of work every company is trying to do when it comes to innovation. In practice this means that many teams have just a month or so before the start of the next quarter – weekdays only – to come up with experiments, measure their results, and analyze the data . This can lead to rushed projects and missed OKRs, a cycle that can get tiring and frustrating quickly. The solution? Take a step back from this quarterly pattern and view product experimentation in terms of longer-term goals.

Implementing a product-led approach to growth can be daunting. However, by breaking down each goal into smaller objectives, creating an effective strategy, and measuring the results properly, you can maximize your chances of success. By leveraging metrics such as breadth, depth, frequency, and efficiency in your product experiments, it is possible to achieve measurable progress toward the goal. A product strategy also includes a business plan , as these are interrelated documents that cannot exist without each other.

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37 SaaS Examples You Need To Know About in 2024

Content Partnership Specialist

April 26, 2023

It’s all about the ‘ SaaS ’ these days.

With the digital transformation moving at the speed of light, more companies are turning to online solutions and running their businesses on Software as a Service (SaaS). In fact, according to the latest Statista report on SaaS organizations in 2024, there are approximately 17,000 SaaS companies in the U.S. and 25,000 worldwide (and counting!). 👏

Whether you’re looking to add more SaaS applications to your tech stack, replace your current apps, start a SaaS company, or simply learn more about SaaS, you’ve come to the right place!

The 37 SaaS examples we’ve compiled include a breakdown of each tool, as well as insider quotes and tips from industry experts to provide you with as much information as possible about these SaaS products. Learn how SaaS models, both established and emerging, continue to revolutionize the software landscape by helping businesses and customers worldwide.

What is Software as a Service (SaaS)?

2. hubspot , 3. salesforce, 4. donorbox, 7. hypercontext, 8. docusign, 9. openphone, 10. pumble by coing, 11. culture amp, 12. tableau, 16. crowdcast, 17. mailchimp, 20. editor x, 21. deskera, 22. userguiding, 23. loio by lawrina, 25. planable, 26. databox, 28. karma bot, 29. appy pie, 30. trustmary, 31. taskclone, 32. pomodone, 33. colorcinch (formerly cartoonize), 34. sprinto, 35. sonarcloud, 36. voilanorbert, 37. timejam.

Software as a Service (SaaS) is a software distribution model that lets customers and companies interact through web-enabled devices such as laptops, smartphones, and other Internet-enabled devices, making it extremely convenient to access and store cloud data.

Quick notes about SaaS:

• Also can be referred to as web-based software, on-demand software, and hosted software
• Software as a Service (SaaS) is one of the three primary tiers of cloud computing—the other tiers are platform as service (PaaS) and infrastructure as a service (IaaS)
• Benefits of SaaS include increased efficiency, cost-effectiveness, accessibility, and scalability 
• SaaS companies are typically either a business-to-business (B2B) or business-to-consumer (B2C) organization
• The most common types of SaaS solutions are Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Content Management System, (CMS), Project Management Software , Sales, Marketing, eCommerce 

Ok, now let’s talk about why SaaS platforms are the future of software. 🚀

Latest SaaS Growth Stats and Trends

SaaS software is one of the fastest growing markets today, growing from $31.5 billion in 2015 to an estimated $171.9 billion in 2022 —that’s about 5x growth in seven years! 👀

Currently, the U.S. is in the lead for the most SaaS companies in the world with about 17,000, followed by the U.K. with the second-leading market with 2,000 SaaS providers. At this rate and by a considerable margin, it’s predicted that the U.S. will remain at the top spot for the world’s largest SaaS market even through 2025, and other market leaders such as the European market, Latin America, and Asia will continue to experience exponential growth as well as the race to creating the next big SaaS app continues!

Adoption Statistics: Moving Towards a SaaS-Powered Workplace

According to the Harvey Nash Group Technology and Talent Study in 2021, 73% of 1,724 technology experts from 69 countries revealed that SaaS applications are considered the most important technology in business success. 

Organizations are turning to SaaS apps to help streamline business operations, scale their growing businesses, and improve customer acquisition, retention, and satisfaction rates. In fact, approximately 99% of firms and 78% of small businesses depend on at least one SaaS tool to help implement data-driven management, automate routine work, and give them the flexibility they need to meet various demands.

And the image below shows the latest SaaS app adoption statistics (growth rate per app category)—this should give you an idea of what type of apps companies are implementing in their businesses.

With all of this momentum and positive growth in the market, we’re excited to share some of the leading and notable SaaS providers today! 🚀

37 SaaS Examples You Need To Know in 2024

From the leaders in the market to upcoming contenders and from project management tools to CRM software , we’ve narrowed it down to 37 of the most notable SaaS companies.

Learn what each tool is about, what it’s used for, and what makes it one of the best SaaS companies in 2024—shall we?

Project Management Software

ClickUp is one of the leading SaaS tools and the highest-rated project management software in the market today.

Companies of all sizes, from solopreneurs to enterprise teams , use this cloud-based platform to bring all of their work into one centralized hub.

This all-in-one workplace productivity platform offers hundreds of fully-customizable features to cater to any project and workflow preferences and integrates with over 1,000 SaaS applications. The ability to customize every part of the platform is what makes ClickUp a perfect SaaS example.

Key features

• Fully customizable platform
• 15+ customizable views
• Management automation workflows
• Collaborative Docs and Whiteboards
• Dashboards with real-time reporting
• Goal tracking
• Customizable templates 
• Free plan and affordable pricing plans
• Available on mobile and most-used operating systems
• Integration capabilities

Another imperative feature of this SaaS model is its ability to consolidate your apps, organize and automate complex workflows, manage projects easily, and so much more, replacing traditional software with a more modern solution for project management.

The benefits of using ClickUp go beyond increasing work efficiency and creating consistent and scalable processes—among many other pros, ClickUp also offers 24/7 customer support to help you get the most out of the platform.

CRM Software

HubSpot is a leading cloud-based sales, marketing, and customer relationship management (CRM) suite. Its ability to function as a one-stop shop for all your business needs makes Hubspot a great SaaS company.

• Automated CRM database and workflows
• Marketing reporting and metrics
• SaaS CRM with in-depth insights into contacts
• Email analytics

With more than 113,925 customers (and counting) located across 120+ countries, HubSpot remains one of the top SaaS providers because it offers hubs for marketing, sales, service, CMS, and operations all in one place. 

These hubs help streamline business operations, maximize sales, nurture leads, improve operations, and deliver the best customer experience. Find further information about its functionality in this  HubSpot review .

My favorite feature is the HubSpot CMS, which allows data sync capabilities between the CMS platform and the rest of the all-in-one CRM.  The hardest part about building a website is ensuring your marketing and lead generation campaigns match.  A disjointed campaign is extremely visible and disruptive to a new or potential customer.  Having all of these tools managed by HubSpot means all your web forms, email marketing, customer service tools, and everything in between are created alongside one another to make one harmonious customer experience, and journey.

Salesforce is a leading SaaS tool specializing in customer relationship management (CRM). It’s built to help businesses connect with current and prospective customers, close more deals, and deliver top customer service. 

• Process automation
• Account and contact management 
• Lead management
• Reports and dashboards 
• Pipeline and forecast management

This SaaS application is one of the top performers for CRM platforms and attracts businesses worldwide because of its cloud computing capabilities. In fact, the latest findings show that over 150,000 businesses use Salesforce to unite their departments and nurture customer relationships. 🙌

Teams such as sales, marketing, and support, can use the Salesforce CRM to easily keep track of their leads, get a deeper insight into their consumer market, and stay connected with them throughout their customer journey .

Our company saw the before and after of SalesForce. On the surface, this SaaS tool looks like another CRM provider (and hundreds of good ones are out there). However, Salesforce has outshined the rest for several reasons, including flexibility, customer-experience focus, mobile capabilities, and strategic acquisitions. This CRM tool has been acquiring complementary companies and services that keep them ahead of the competition. From AI analytics and email marketing tools to automation and statistics tools. With Salesforce, we are assured that our CRM will never be obsolete, and we look forward to their feature updates every 2 to 3 months.

Nonprofit Software/ Donation Management Software 

Donorbox is a cloud-based nonprofit fundraising software built to supercharge your fundraising efforts.

• App integration
• Campaign management
• Payment processing
• Contribution tracking
• Gift matching management
• Fundraising templates

This SaaS application has increased donations by upwards of 400%, helped raise $1+ billion in donations, and has become the leading online fundraising choice for over 50,000 organizations such as Make A Wish, The Boys and Girls Club, and many more across 96 countries!

With this SaaS tool, donors and volunteers can easily and securely connect with nonprofit organizations and individuals, connecting more people worldwide.

Nonprofits can use this app to easily create, launch, and manage online fundraising campaigns and securely receive online donations via PayPal or Stripe—instantly, making it a worry-free and wholesome experience for the donors and an effective way for nonprofits to create a higher impact in their community.

Enterprise Messaging Software

Slack is one of the leading companies and a cloud-based workplace communication tool that transforms how organizations communicate by centralizing team communication and allowing quick information sharing—making it one of the top SaaS products and a game-changer in today’s collaborative workspace.  

This channel-based messaging platform is used by millions of businesses to align their teams, unify their systems, and grow their business.

• App integrations
• Public and private channels 
• Built-in voice and video conferencing
• File sharing 
• Mobile access
• Real-time notifications
• Emoji reactions
• Secure, enterprise-grade environment
• Integration with project management tools

With Slack as the main communication hub at work, teams can communicate with each other instantly, create and join channels that pertain to their role, receive team or company-wide updates, send files via chat, and more. 

📌 Bonus : You can upload and add custom emojis to your keyboard, making online conversations fun and more interactive, and integrate Slack with ClickUp to supercharge your team collaboration and workflow even further (that alone makes this one of the top SaaS apps in my opinion 😉). 

Social Media Management Software

Buffer is a social media management platform built to help small businesses build their brand, engage customers on social media, and grow an audience organically. 

Using Buffer’s suite of products, its users can improve their social media marketing strategy through three easy steps: Analyze, Publish, and Engage—analyze results, plan and schedule your content, and engage with your audience.

• Content management
• Multi-account management
• Multi-channel campaigns
• Reporting, statistics, analytics
• Social media monitoring
• ROI tracking
• Post scheduling

This SaaS application has been making waves across many different industries for over 10 years, serving over 140,000+ users, including Shopify, Intercom, and many others spanning 15 countries.

Employee Engagement Software

Hypercontext is an employee engagement software built to help managers conduct more productive one-on-one and team meetings.

This SaaS platform made it to our top SaaS examples list because, well, for one, we’re all for creating efficient systems and processes! 

Its mission is to help managers turn meetings into high-leverage, effective, productive opportunities and juggle team activities while coaching good management habits. 

According to a recent survey on the state of high-performing teams in tech , only 16% of managers strongly agree that their companies have provided them with the right tools and resources to manage people.

With this tool, managers, and teams can create shared meeting agendas, take meeting notes , gather feedback, and assign action items to follow up on—all in one place, making meetings more purposeful and action-driven, and keeping everyone on-topic goal-oriented.  

• Action item tracking
• Activity dashboard
• Agenda management
• Goal management
• Discussions and forums
• Access controls and permissions
• File sharing

Some of my favorite and most-used features of the Hypercontext app are the collaborative agendas, Chrome extension, and the ability to copy items from one meeting to another! Collaborative agendas are the bread and butter of the app—I can add an agenda to any meeting in my calendar, with items for discussion, notes, attachments, etc.  Plus, everyone else in the meeting can also access and add to the agenda as needed. Once the meeting’s over, everyone automatically gets sent the meeting notes and the agendas stored in past meetings, which can be easily accessed anytime.  This helps everyone arrive prepared, ensures the meeting has direction, and keeps everyone accountable. When unsure of what to talk about or how to bring something up, you can leverage Hypercontext’s database, which has over 500 conversation starters and over 80 meeting agendas

Digital Signature Software

DocuSign is a cloud-based digital signature software that replaces the traditional approach of signing paper documents by enabling organizations to turn every business agreement entirely digital to capture e-signatures, speeding up the process tenfold.

This SaaS example has transformed how people prepare, sign, act on, and manage agreements. Its eSignature feature enables both parties involved in the process to sign practically from any device, any time, anywhere—accelerating the business process and simplifying people’s lives.

• Extensive file type support
• PDF form conversion
• Standard and custom tags and fields
• Cloud storage integration

DocuSign is one of the most secure and reliable SaaS applications in the market, which is why it’s trusted by more than a billion users in over 180 countries, including some of the most security-conscious Fortune 500 companies. 

Business Phone System Software

OpenPhone is a business phone systems software that offers a phone app that lets users get a business phone number without a second phone or a second SIM card—replacing your office phone with an app.

• Call routing
• Voice recognition
• Call center management
• Call logging and recording
• Embed OpenPhone into ClickUp and integrate with other work tools

This SaaS application has powerful calling, messaging, and lightweight CRM features and allows its users to use a dedicated business phone number to receive texts and messages in the app, no matter where they are in the world—making it an efficient solution to managing all your work-related phone communications.

How does it work? The OpenPhone app uses Voice over Internet Protocol ( VoIP ) to route the calls and texts through the internet connection—meaning all calls and texts happen through an internet-enabled device.

Using the app helps separate professional and personal communications, stay in touch with their customers easier, and enables you to personalize your number to reflect your own brand.

OpenPhone currently serves over 10 million calls and messages monthly and is on its way to building deeper integrations with the other productivity tool s that its customers already use.

Instead of putting call logs, voicemails, and texts into their own separate pages, OpenPhone brings them all into one single, streamlined view.  This gives workspace owners a fast, easy way to see the full conversation history for any contact. You can add properties to any contact to circle back with specific companies or other custom segments.  Anyone with shared access to a number can view its entire conversation history, which means different teammates can help the same customer at different times—all with the full context of every conversation they’d had previously.  On a call, voicemail, message, or note, teammates can start a thread, tag each other, and have a full, behind-the-scenes discussion right in the conversation context. This leads to faster, frictionless resolutions as it helps avoid delays and time-wasting handoffs

Team Communication Software

The team communication software, Pumble , lets your team discuss topics in threads, collaborate via channels, and message teammates.

Like Slack and Microsoft Teams, this SaaS app enhances team communication by offering a chat feature with voice and video calls. 

• Channels and threads
• Direct messages and notifications
• Video chat and conference calls
• File sharing knowledge and organization
• Fully searchable history
• Search function for files and information
• Connect with other apps

“One of my features would have to be the 1:1 video and audio calls. I often have 1:1 feedback sessions with the translators and writers, and, with Pumble, these sessions are easy to carry out. Also, I have to highlight the free unlimited message history. I can search every conversation I ever had in the app, even a conversation I had with a colleague from a couple of years ago, with just a couple of clicks. Currently, I’m especially looking forward to group audio and video calls, which are coming soon. I can’t wait to move my team’s weekly meetings with our writers and translators to Pumble!”

Culture Amp is an all-in-one employee engagement software that helps HR professionals and people leaders improve their employee experience and build a competitive advantage by putting culture first—no matter what.

• 360-degree feedback Anonymous feedback
• Compensation management
• Customizable templates
• Goal setting and tracking
• Individual development plans
• Skills assessment
• Reports and analytics

This app brings the unique power of modern psychology, an on-demand platform, and collective intelligence together and offers features for performance reviews, goal tracking, continuous development, and more, making this an excellent SaaS example!

With over 6,000 companies , from startups to Fortune 500s, Culture Amp has been recognized as one of the world’s top private cloud companies by Forbes and one of the most innovative workplace companies by Fast Company. 

Companies rave about this SaaS tool because of its ability to power performance management , employee engagement, and the development to develop high-performing teams. 

End-to-end analytics platform

Tableau is one of the leading cloud-based analytics platforms in the world. It allows people of all skill levels to work and transform data into actionable insights that are easy to understand, leading to daily smarter, more impactful, data-driven business decisions. 

From individuals and non-profits to government agencies and the Fortune 500, organizations from all over the world use this data visualization tool and self-service analytics platform to get deeper insights faster than ever before, creating data culture companies .

• Behavioral analytics
• Ad hoc reporting
• Customer journey mapping
• Performance metrics
• Predictive analytics
• Modeling and simulation

When organizations embrace a data culture, they are empowered to make informed decisions every day with data, making full use of their data. Use this SaaS business to enhance your relationship with data and start using it to your advantage.

Website Hosting Software

Kinsta is a cloud-based software that provides managed WordPress hosting services and hosts all types of sites from freelance blogs up to blogs created by Fortune 500 companies. 

Used by developers, web designers, and freelancers worldwide, this app allows you to design, develop, and deploy WordPress websites from the comfort of your local machine and can improve your website’s performance with the fastest infrastructure built on Google Cloud Platform’s premium tier network and fastest C2 virtual machines, designed to minimize distance and hops, resulting in fast and secure transport of your data. 

Key features :

• Alerts/notifications
• Real-time monitoring
• WordPress users can choose from 28+ data centers around the world

Kinsta aims to provide hosting with more flexibility—our customers have seen up to 200% in performance improvements , 30% improved latency, or 50% better bandwidth since implementing Kinsta.  And as a company on a mission to create powerful tools for developers, entrepreneurs, and web creators, we’ll soon launch new additional hosting services that are designed to power just about any web service, all with the familiar Kinsta experience

Join the growing club of 24,300+ companies across 130 countries that switched to better, faster hosting.

⭐️ Bonus content : Learn how Kinsta has helped our ClickUp teams support and ramp up our blog efforts in this case study ! 

Document Management Software

Quip is a team collaboration and productivity platform by Salesforce that delivers a modern built-in collaboration solution and provides real-time CRM data to help users win faster.

Key features : 

• Workflow management
• Document management
• Offline mode
• Team or 1-1 chat / real-time chat and editing
• Status tracking
• Sales mobile app access 

This SaaS provider offers some of the most commonly used work tools inside Salesforce—use documents, spreadsheets, chat, and more to assist with real-time sales planning without leaving Salesforce. Instead of communicating by email, users can use its commenting and chat feature and directly communicate with other team members within a document, saving time and creating room for more efficient collaboration. 

Digital Adoption Software

Apty is an end-to-end digital adoption platform built to help enterprise companies optimize their business processes, including onboarding, training, and process compliance.

• User onboarding/ training management
• Data quality control 
• Asynchronous learning
• Multi-language
• Self-service portal 
• Mobile learning

About 70% of all digital transformation initiatives fail due to various factors such as limited resources, resistance to change, lack of alignment, or stakeholder buy-in. Apty addresses these common challenges by providing tools such as onboarding, validation, and analytics to solve any digital adoption problem.

This SaaS provider helps maximize the ROI of your enterprise tech stack and decreases training and support costs by up to 80%.

Live Streaming Software

Crowdcast is a live-streaming software that users can utilize to host webinars, workshops, interviews, online summits, and more. 

• Event scheduling and management
• Multiple hosts 
• Multiple camera feeds
• Polls/voting
• Audience analytics

This SaaS product offers a simple, easy-to-use, and fun user interface making it a seamless experience for both hosts and attendees. Whether you’re hosting an informative sales presentation or co-webinar with brand partners, Crowdcast provides you with a reliable platform to connect with your audience and scale your business. 

Lead Management Software

MailChimp is a great SaaS example of a lead management software and email marketing service provider—growing your audience and revenue with this all-in-one marketing platform.

This tool allows users to send marketing emails, set up automated messages, build landing pages, create targeted ad campaigns, sell online, and help facilitate reporting and analytics.

• Automated scheduling
• Behavioral targeting
• Conversion tracking
• Lead capture and nurturing 
• Multi-channel marketing
• Template management
• Campaign, segmentation, management, and analytics

As of 2022, more than 667,680 companies worldwide use MailChimp to reach and surpass their sales and marketing goals. 

Automation platform/ Cloud Integration Software

Zapier is a cloud integration and automation software that empowers users to automate their work across 5,000+ apps to improve work efficiency and streamline workflows.

• Rule-based workflow/ workflow management
• Business process automation
• No-code Pre-built connectors
• Integration management 

According to the 2021 Zapier State of Business Automation Report , 94% of small to medium-sized business workers surveyed mentioned they perform repetitive, time-consuming tasks in their role. Additionally, 88% of SMBs revealed that automation has allowed them to compete with larger companies. 

This SaaS example is valuable to users because it lets them automate social media posts, contracts, data entry, sales outreach, lead flow, and team updates. It also automates your most time-consuming busy work, such as data entry and invoice management , to help save mental energy and time for the more important parts of the business.

Zapier is the ultimate power tool to automate your routine work. It allows you to build fully automated flows between tools exchanging data and messages between Intercom, Salesflare, Slack, Google Sheets, SQL databases and many other platforms. Our business at Salesflare runs on more than 125 so-called “zaps” at the moment, which enables us to take on an enormous amount of work with a small team. We’re currently working on automating the early stages of our sales process even more, pushing data about new customers into Salesflare and triggering emails there, so we can give our clients the attention and follow up they deserve.

Help Desk and Team Communication Software

​Front is a customer communication and team communication hub that allows users to improve operational efficiency and create stronger customer relationships. This SaaS provider offers a seamless platform for communication—a combination of an automated ticketing system with a personal touch of email.

This SaaS provider has helped Support, Operations, Account Management, and Success teams at 8,000+ businesses to eliminate the disconnect systems by bringing all their channels into one single platform, craft personalized replies, and attend to issues faster without sacrificing efficiency. 

To streamline your work even further by connecting Front to your most used work tools— integrate Front with ClickUp, HubSpot, Salesforce, and more!  🤝⚡️

• Activity dashboard and tracking 
• Chat/messaging/comments
• Customer completing tracking 
• Customer segmentation
• Email monitoring/ management
• Reporting/analytics 
• Third-party integrations
• Video conferencing
• Shared inboxes

From an individual user perspective, commenting in Front is by far my favorite feature.  For any complex customer scenario, commenting lets me quickly and easily loop in the right teammates and get the resources I need to send the best possible reply. Ultimately, commenting lets me communicate more effectively and build deeper relationships with my customers. As for our automation, I’m most excited about the complex, time-saving workflows we have on the roadmap.  We’ve had so many customers who embrace the possibilities with Front, and I’ve seen so many success stories with rules where teams can spend less time managing messages and invest more time in communicating with their customers.

⭐️ Bonus content :  Mathilde Collin, Founder, and CEO at Front, was on our When It Clicked podcast! Listen to learn about her When It Clicked moment when building the company! 🎙😊

Web Creation Platform

​​Editor X is an advanced web creation platform made exclusively for designers and web professionals.

• Fluid design
• Freedom of CSS grid layouts
• Content automatically adjusts to every screen
• Hundreds of designer-made components
• Drag and drop interface

This SaaS example boasts a cutting-edge responsive design and a smooth drag and drop interface to enhance user experience. Users can add custom codes, create complex sites with leading design and layout capabilities, and code-free user interactions.

A powerful built-in CMS is also available within this tool to build data-driven sites and complex web applications and allows collaborators to update and manage the website content. This helps prevent unwanted changes from others outside of the permitted collaborators.

The platform allows me to create complex custom sites with leading design and layout capabilities using tools such as grid, Layouters, and Repeaters. I can also create custom code-free user interactions. The built-in CMS allows me or my collaborators to update and manage site content behind the scenes, so it takes the stress away of someone messing with my site design. If I do want to use code, Velo (our open development platform) lets me add another layer of control and functionality to my site. As someone with experience in building sites using code, I know how tedious and repetitive that can be—having a tool that turns this experience into a visual medium with a drag and drop interface makes site building way faster and more efficient. I’m looking forward to building much more complex projects, like web applications and whole platforms on Editor X.

Integrated Accounting, CRM, HR Software 

Deskera is an award-winning all-in-one business software that helps small to mid-sized businesses (SMBs) grow faster with fewer tools.

• Enterprise asset management 
• Integrated business operations
• Reporting/analytics
• Financial management
• Supply chain management
• HR management
• Inventory management

With their customers’ pain points in mind, Deskera offers three main product modules to optimize the critical needs of every small business: Books, CRM, and People. Businesses can streamline their operations by managing their invoicing, accounting, inventory, payroll, CRM, HR, email marketing, and so much more, all in one place with this SaaS tool. 

We designed Deskera to be used by small business owners across different industries and help them grow. We want to encourage digital transformation among the SMBs of the world with our affordable and easy-to-use product. Businesses can also customize and configure their own sales pipeline to make sure all your deals are effectively moving towards closure, connect your existing apps via Zapier or the other APIs, build your own apps with the included dev kit, and manage email marketing campaigns.

User Onboarding Software

UserGuiding is a user onboarding platform built to improve product adoption rates and reduce churn by providing ‘no coding needed’ interactive user onboarding walkthroughs.

This SaaS example is great for those who want to quickly create step-by-step product walkthroughs, interactive guides, checklist widgets, tooltips, resource centers, and more. There is no technical expertise needed thanks to its drag and drop functionality.

• Self service tools
• Product launch management
• In-app training
• Contextual guidance
• Audience targeting
• Reporting/ analytics 

Additionally, Userguilding offers great analytics to help create personalized experiences by tracking the performance of walkthroughs, tours, tutorial popups, and more. 

As businesses move towards digitalization and remote work, they need to make sure all employees, clients, customers, and users have an easy time adjusting and onboarding to new digital platforms.  For example, we use UserGuiding to create onboarding flows for our customers and helpful interactive content for our new employees who need to learn new tools quickly. The tool has user identification and tracking features, which are advanced ways of analyzing your user or employee’s behavior as they go through your interactive content. It can be a great way to increase engagement and set up segmentation to make sure everyone gets their personalized experience.

Legal documentation software

Loio streamlines contract drafting and review for attorneys, paralegals, managers, and business owners with AI-powered Microsoft Word software.

• Contract templates
• Text review/ editing
• Style check
• Full text search
• Contract/ license management
• Document capture and storage
• Automated clause analysis
• Summary of contracts

This SaaS example serves as a modern world legal hero as it automatically detects issues in contracts within Microsoft Word and then guides its users through fixing them. This ensures legal documents are precise and up-to-date.

My favorite feature in Loio is the Quick and Detailed Summary of Your Contracts—Loio automatically reviews your contracts and gives a detailed Health Score. You have the freedom to accept a recommendation or leave your contract untouched. Automated Clause Analysis is also helpful as it eases contract creation and always helps to find a lacking clause in seconds, making contract drafting quick, enjoyable, and efficient.  As for new features, I look forward to trying the Bilingual Contract Support feature which helps with reviewing and comparting bilingual contracts and instantly fixing contract errors.

Consumer Research Platform

PickFu is a consumer research platform that allows users to gather in-depth consumer feedback and replaces guesswork with clarity.

• Split testing
• Online polls and quizzes
• Click tests
• Market research

This SaaS example is great for market research. It connects users to real people giving their honest opinion to instantly obtain the proper insights needed for smarter and data-driven business decisions. Easily optimize your ideation, design, development, and launch phases. 

Whether you’re building an app, testing a new website layout, creating a new business logo, preparing to launch a new product or campaign, PickFu can help gather unbiased feedback. It uses the instant polling service, A/B testing feature, and other features to get demographic breakdowns of your respondents. This helps you better understand your market. 

“As a Sr. Product Manger, I find feedback crucial in our product development process—for this reason, I use PickFu for market research and user testing. A few of my favorite features of this tool have to be:  How fast you get feedback; you can get feedback within minutes, which is way better than traditional user testing. How easy it is to sort demographics; all the demographics are preset in the SaaS interface, so you can choose gender, age, income, race, career to name a few. Real feedback from real people; these people exist, they’re real people from all over the world. Being able to test information architecture with PickFu; whether people like one structure of navigation links vs. another.  Ultimately, this can help your workflow and overall market strategy since you can easily test ideas with a demographic in minutes!

Planable is an end-to-end workflow and social media tool built to help marketing agencies, freelancers, and marketing teams alike, improve planning, collaboration, and approval processes. 

Key features:  

• A centralized hub for social media campaigns
• Real-time collaboration—exchange feedback and iteration in real-time
• Grid view for arranging and previewing content before posting
• Schedule posts across social media channels (Facebook, LinkedIn, Twitter, Instagram)
• Social media calendar

This SaaS tool allows creators and clients to plan posts, visualize content, and collaborate within the platform in real-time, creating an efficient process for client feedback and implementation. And in turn, you get help speeding up the approval process. 

Social media is constantly changing: lots of algorithm updates, features, and new platforms. As a marketing team, we should keep up with that and stay on track with our targets simultaneously. Planable helps us with our content creation processes by ensuring a seamless collaboration within our team.

Dashboard and Reporting Software

Databox is a business analytics platform that gathers all your business data into one centralized dashboard, allowing users to track performance and get insights in real-time. 

• Customizable reports
• Drag and drop functionality
• Funnel analysis 
• Reporting/ Analytics
• Forecasting 
• Revenue tracking 
• Trend analysis

What makes this tool a great SaaS example is its ability to gather a mix of data from different sources and project them into one dashboard, giving a complete view of your performance at a glance.

Due to the nature of my marketing role, I have to pull data from multiple tools like Google Analytics, Google Search Console, Ahrefs, and Hubspot Marketing daily, and logging into each tool separately would take a lot of my time.  With Databox, I can track metrics from multiple sources in one dashboard and easily draw correlations, identify trends, and make adjustments promptly. This tool helped me, and my team hit quarterly goals consistently. Databox has recently launched a Reports feature. So now, rather than creating reports or presentations outside of the Databox app, Reports will help me with the full process–from data collection to presentation.  With Reports, I hope that I’ll be able to automate more of my general reporting process and tell a better, more compelling story of what was done, how this impacted performance, and the results of those efforts on the business.

SEO/ Web Optimization Software

Ahrefs is one of the leading and trusted SEO software suites worldwide. It offers tools for marketing professionals to help optimize their content and maximize growth opportunities.

With SEO tools for link building, site audits, keyword research, rank tracking, and competitor analysis, digital marketers can gather vital information about backlinks to streamline all of their marketing efforts and get higher Google rankings. 

• Keyword research for search engines
• Clicks data
• Total search traffic estimation
• Backlink growth or decline over time
• SERP history 
• Outbound link monitoring
• Keyword ranking alerts 
• Instantly analyze internal backlinks 

Ahrefs is often my first and last stop when working—it provides a quick overview of how our organic traffic is doing as well as serves as the basis for all SEO research and tracking.  The features I use the most are Rank Tracker and Site Explorer.  The former allows me to see any changes to our keyword rankings, and the latter gives a great high-level view of a website or specific page with multiple options to drill down deeper. Ahrefs is becoming a swiss army knife when it comes to digital marketing research and I’m excited to see them getting into things like paid ad intelligence as well as integrations. I’m also looking forward to trying out their Google Sheet connector to better visualize and analyze the data.

Karma Bot is a fun and engaging way to reward your employees and their colleagues. 

Key features:

• Goal management 
• Performance management 
• Employee recognition 
• Reporting/ analytics
• Benchmarking

With this employee engagement tool and reward system, team members can give Karma points to their management and peers as a token of appreciation for their hard work. Using the points earned from their colleagues, team members can then use these points to redeem prizes set by the company—what a great way to build a fun and rewarding work culture!

Remote work is hard, and as a SaaS creator and business owner, I feel the pain of working 100% remotely. Knowing how it feels to be away from colleagues, I knew there was a better way to keep people engaged and to make them feel appreciated at work, wherever they may be—that’s Karma’s mission. It helps teams track birthdays, establish a rewards system, and more to help create a fun and positive work culture.

No-Code Development Software

Appy Pie is a no-code development software with multiple business solutions. Its Website Builder lets you create well-designed websites that are high on functionality and are loaded with meaningful and relevant features.

• Lightweight & fast websites
• Offline capabilities
• Safe & secure
• Real-time updates
• More than 200 features
• Unlimited customization options
• Free domain with every website
• Free professional email address

Users who work in any type of business including a salon, a real estate agency , a healthcare institution, can take advantage of Appy Pie and its no-code website builder.

Survey Software

Trustmary is a customer feedback tool for lead generation to help optimize websites and increase conversion rates.

• Testimonial forms and videos
• Lead generation form and pop-ups
• Social proof pop-ups
• A/B and multivariate tests
• Net promoter score
• Survey maker
• Integration

Users can gather testimonials, increase conversion rates, and gather feedback. They can also utilize social proofing by highlighting their existing happy customer base across different platforms like Google, G2, Capterra, Facebook, and so on. 

When you let your existing happy customers speak for you, it truly increases trust in your brand in the eyes of new visitors.  Everyone knows that a great customer experience leads to happier customers and raving reviews. If we didn’t get reviews daily from existing customers, we’d lack the opportunity to develop accordingly and encourage employee engagement as well.  We’re currently using our beta A/B testing tool to test out which testimonial widget performs the best. With this information, we can optimize our conversion rates even further and let our customers know our insights as well.  Furthermore, Trustmary’s widget library is currently growing as new designs are being added. We’re excited to see how they perform in general and against one another!

Productivity Software

TaskClone is a web-based productivity tool that allows users to sync and tag notes from note-taking apps like OneNote and Evernote and create follow-up actions in your favorite task app or Google Calendar for execution. 

It organizes the steps needed to help you complete your project and to-dos with ease—no more toggling between SaaS apps and task duplication. Simply type your to-dos using Evernote, OneNote, Google Docs, or TaskCam, and add a trigger tag to sync your notes automatically.

• To-do sent to a specific destination
• Events and reminders sent to the calendar
• Link to the note added to each task
• Work offline and syncs new changes with an internet connection
• Works with ClickUp, Todoist, and 40+ other task apps

TaskClone is literally the only way to get my todo items out of my notes and into ClickUp.  Whether you still use Evernote, OneNote, Google Docs, or even handwritten notes, TaskClone makes it easy to jot down tasks when I’m taking notes and ensures I never forget them by sending them to Clickup, where I get my work done. It makes both Evernote and Clickup more valuable to me.

Time Tracking Software

The PomoDone App is a performance-boosting and productivity tool that helps users manage their workflow, track time spent on tasks, and stay focused on the task at hand.

It uses the time management method called Pomodoro Technique, developed in the late 1980s by a university student, Francesco Cirillo, to break down complex projects into biteable and timed chunks of work, focusing on only a single task at a time. 

• Block certain websites while working
• Interruption notes
• Log management
• Chrome extension
• Tag customization
• Integrations with ClickUp and other SaaS products

Use this SaaS tool to improve your time management and reduce mental fatigue from context switching all day long. 

Countdown timer to apply Pomodoro™ technique, embedded directly into ClickUp app. It allows me to run predefined and custom timers and breaks while I focus on ClickUp tasks execution, it keeps all the timer records in its own log and syncs them back to ClickUp timesheets, and it also helps to block certain websites while I am focusing on the task. I can see what I am working on at this very moment and helps me to keep my attention and avoid distractions and interruptions. It’s a lifesaver for my ADHD, and background ambient sound helps me focus even deeper.

Check out these ADHD apps !

Photo and Text Editor Software

Colorcinch is an intuitive photo editor that lets users enhance photos into personalized artwork with just a few clicks. 

• AI background removal
• Text masking and editor 
• Freehand drawing
• Export and share 
• Effects, filters, and overlays 
• Stock libraries and collections 

Let your creativity run wild—use its easy-to-use editing tools and effects to create mesmerizing and customized graphics for all types of needs, including social media and blog posts. 

Colorcinch comes with essential editing tools like crop, resize, brightener, text editor, background remover, image converters, and creative tools such as photo combiner, color picker, overlay images—everything you need for a photo editor. This tool is easy to use, and you don’t need to be a pro designer to craft stunning graphics! Simply play around with its incredible collection of stock photos and hand-picked creative assets (vectors, icons, masks, and overlays).

Compliance Management 

Sprinto is a compliance management software built to replace the slow, laborious, and error-prone way of obtaining compliance with a tech-enabled experience. 

• Adaptive policy documents
• Zero-touch security audit and compliance
• Compliance tracking
• Audit management 
• 100% automations
• Live guidance with experts
• Real-time centralized monitoring

SaaS companies use this service provider to achieve compliance in a shorter period of time. 

Get compliance ready quickly by automating monitoring through integrations and workflows, automatically creating tailor-made security documents, getting access to live sessions with compliance experts, and enabling centralized monitoring. 

With Sprinto the compliance journey can be shortened to just 15 days instead of 90-120 days depending on the organization size. The tool is building a new category of SaaS tools, and with this, compliance has become more gamified than ever. The Dashboard is just a checklist with a score out of 100—score 100 and you are compliance-ready!

Source Code Management Software

SonarCloud is a source code management tool built to catch bugs and security vulnerabilities in your pull requests and throughout code repositories—detect, understand, and fix code issues earlier in your workflow.

• Bug tracking
• Code review
• Continuous integration

This software development tool helps you build robust and safe applications by providing you quick access to your code health. This helps you know where your code stands at every step of the development cycle. 

It also allows you to fix codes, learn new rules along the way, and integrate with other work tools, like Github, to further enhance your development workflow. 

Chekk.io is a software development company, and we use SonarCloud in our CI/CD (Integration & Deployment pipeline) to help software developers keep code quality at a very high level.  Since SonarCloud is integrated into our build and deployment pipeline, analysis is done automatically once a developer pushes his new code changes into the repository. As a result, our developers get instant feedback in case of any problems found in code, and every problem it finds is usually properly described with code examples. The next thing we’ll do is to apply the new code quality metrics SonorCloud recently published to improve our development processes. In particular, I believe this metric will help us to identify technical debt and execute appropriate mitigation steps.

Bonus: Technical Debt

Email Marketing Software

VoilaNorbert is an email marketing software that lets users easily find email addresses online with its bulk email finder tool. 

• Domain check
• Catch-all server detection
• Bulk and single email verification

This tool has been voted as one of the most accurate bulk finder tools by Ahrefs with a 98% success rate—all you need is your prospect’s full name and their website URL, and this app will retrieve the email address and verify it with its intelligent verification tool.

Working in Outreach and Link Building Partnerships at  VoilaNorbert, I use this tool to find and verify email addresses from my prospect list—it’s a very useful tool for conducting cold outreach, for business development, HR and PR.  It has many useful features that are beneficial for a small business: a “send later” feature, email reminders, customized signatures, email templates, email sequences, and email tracking.  As for my favorite feature, I’ll have to say it’s the mail merge feature. It allows me to scale my cold outreach campaigns by sending personalized emails to a large number of people at once— it has helped conduct outreach campaigns and reached more people who may be interested in marketing co-partnerships.

Employee Time Tracking Software

TimeJam gamifies time tracking by adding a playful touch and applying social media elements to tracking time.

• Making time recording social and engaging with friendly competitions on Slack or MS Teams
• Teams earn points for being compliant with time tracking and compete for a monthly prize
• Integrations with your existing work tools for time tracking, including ClickUp, Harvest, and more
• Simple to set up and get your team much engaged in recording their timesheets

This helps improve team productivity and strengthens team morale. With TimeJam hours are recorded daily and customers are seeing 10% increase in billable hours due to better data quality.

Gamifying time management can be easy for a company to gain more revenue. TimeJam applies a spectrum of tactics to keep your team engaged in tracking time daily: Gamification, Social, Humor, and Performance. We implemented Timejam for Kolme Group and saw the average age of a time entry decrease from nearly a week to less than a day, and in the process, our revenue increased by almost 9%.

Time To Choose The Best SaaS Tools For You

Well, there you have it—37 software as a service (SaaS) examples that are leading and making waves in this industry! 

With the digital age progressing faster than ever, the overall SaaS market and global cloud adoption are expected to expand rapidly as many more organizations adopt a SaaS solution approach for various business functions, and it’s not slowing down any time soon. With these SaaS examples, including project management tools, we’re constantly improving the way we work and manage our businesses for the better.

So whether you’re thinking of starting your own SaaS company and looking for inspiration for a business model or on the hunt for new tools to improve your productivity and support your growing business, these SaaS examples can certainly help you get there! Refer to the software tools and expert tips mentioned above to help you make the most informed decisions.

And because there are thousands of options, and not all SaaS are the same, make sure to study their SaaS model and unique proposition and give them a try to see how they align with your vision and goals. You may just discover your new favorite, go-to SaaS tool for managing your projects and accelerating your business—all in one place. 😉🚀

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Bottom-Up SaaS Business Strategy Explained

Think about the last software application that you used for work. Whose idea was it to buy it? Did it come from the management or employees? If it’s the latter, then you’ve already experienced what bottom-up SaaS is!

Our guide explains what exactly bottom-up SaaS is and covers the main growth strategies and tactics used by bottom-up companies.

Let’s dive right in!

• In the bottom-up model, a SaaS company promotes the product to individual end-users and teams . Once they adopt the product, they champion it within the organization.
• Product-led growth is a well-known bottom-up approach that relies on the product for customer acquisition and revenue expansion.
• Free trials and freemium enable the users to explore the product and experience its value to convert them into paying customers . For this approach to work, a trial or free plan mustn’t satisfy user needs entirely.
• The self-service model enables users to buy (or cancel) the subscription, implement the product, learn how to use it, and access support without talking to customer services teams. This approach is becoming increasingly popular, even for the enterprise client.
• Word-of-mouth marketing relies on product virality and network effects. To encourage satisfied users to promote the product in their social and professional networks, companies use referral and loyalty schemes.
• Account expansion through upsells and cross-sells increases customer lifetime value without elevating CAC . This is best done through contextual in-app messages highlighting the benefits of the additional/premium features.
• Want to find out how Userpilot can help you leverage the bottom-up SaaS model? Book the demo!

Try Userpilot and Take Your Product Growth to the Next Level

• 14 Day Trial
• No Credit Card Required

What is bottom-up SaaS?

Bottom-up SaaS is a growth strategy used by B2B SaaS companies that focuses on individual users or teams to drive customer acquisition.

In a nutshell, by enabling end-users to experience the product value , the bottom-up SaaS model turns them into product advocates who promote it from within the organization. This means product adoption starts with small teams and gradually spreads across the entire company.

How is it different from the top-down business model?

The latter is less user-centric and relies on the sales team targeting the key decision-makers and nurturing them with sales pitches, presentations, and demos , to secure an enterprise deal for the whole organization.

Different approaches used in bottom-up SaaS companies

How does the bottom-up business model work in practice? Let’s have a look at a few common approaches to implement it.

Product-led growth

Product-led growth is a business model and go-to-market strategy that uses the product as the main driver of customer acquisition , revenue, and account expansion .

Instead of taking money from customers upfront, PLG enables users to experience value . Only when they’re satisfied with how the product satisfies their needs and desires , may users upgrade to a paid plan. In the long run, they might also play a role in new customer acquisition.

This reduces the role of the marketing and sales teams (but doesn’t eliminate them).

Product-led growth playbook

Here’s how to implement PLG:

• Offer a free plan or trial . This ensures a constant flow of new customers and allows them to experience the value.
• Create a frictionless sign-up flow to smoothly let users inside the product.
• Provide onboarding experiences personalized to unique user needs to reduce time-to-value .
• Use contextual in-app messages to introduce new features .
• Gather customer insights on how to improve the customer experience via surveys , interviews, and reviews.
• Leverage product analytics to enable data-driven decision-making.
• Ensure on-demand access to support to both free and paying users.
• Cultivate an organizational culture that fosters customer-centricity, innovation , and cross-functional collaboration.

Freemium or free trial

Freemium and free trial are the main two bottom-up customer acquisition models.

In freemium , the user gets access to limited functionality for free. There’s no restriction on how long they can use the product, but there might be a usage cap, like limited storage or data.

In the free trial , the user gets access to full functionality but for a limited time.

In both instances, the users get a chance to experience value but cannot use it to achieve all their goals because of the limits.

Free trial playbook for improving conversions

The measure of freemium or free trial success is how well they convert users into paying customers .

Here are a few tactics to boost conversions:

• Analyze user behavior to discover the most valuable features and the time to activation.
• Based on the insights, determine the ideal length of the free trial period. Make it only long enough to activate.
• In your free plan, restrict access to the most valuable features to incentivize free users to upgrade.
• Use a reverse free trial to allow users to discover the value of the premium features.
• Drive upgrades with contextual in-app messages, such as when the user is about to use a premium feature or is near the end of the trial.
• Create a sense of urgency and FOMO for users on free trials.

Self-service

The self-service model reduces the dependence of the SaaS company on the customer service teams.

That’s because users can onboard , use, manage, and troubleshoot a product without their direct assistance. This reduces customer support costs considerably and gives users independence.

Self-service isn’t only about the support but also sales: most users purchase the product or renew their subscriptions online and pay by card . This includes enterprise sales, which traditionally used to be very top-down.

Self-service playbook for improving customer experience

• Ensure your product is intuitive to navigate so that users can find features easily.
• Incorporate accessibility features like localization to accommodate all users.
• Develop a detailed knowledge base covering all aspects of your product.
• Produce step-by-step video guides for visual learners.
• Set up a moderated community forum where users can ask questions, share experiences, and offer help to each other.
• Implement AI-powered chatbots that can answer common questions, guide users through troubleshooting processes, and escalate issues when necessary.
• Offer a self-service portal where users can manage their accounts, subscriptions, and billing information.
• Actively collect and analyze feedback on your self-service resources to identify areas for improvement.

Word-of-Mouth Marketing

Word-of-Mouth (WOM) is believed to be the most effective and efficient marketing channel because it drives organic customer acquisition.

Think about it:

Prospective customers are more likely to trust their friends and colleagues than marketing campaigns . As you acquire more customers while spending less on marketing, it also reduces the customer acquisition cost (CAC) .

WoM playbook

How do you turn your customers into product advocates ?

• Prioritize onboarding to activate new users .
• Constantly innovate and develop the product to satisfy evolving user needs and stay ahead of the competition.
• Set up loyalty schemes to reward customers.
• Leverage product virality and network effects to drive organic growth.
• Regularly monitor user sentiment via NPS surveys .
• Always act on customer feedback and close the feedback loop .
• Use analytics and feedback to identify power users .
• Collaborate with successful customers on case studies .
• Create ambassador programs.
• Ask your most loyal users for testimonials.
• Set up referral schemes.

Expansion and upselling

Account expansion facilitates revenue growth through cross-sells and upsells .

By selling additional services or upgrades to existing customers, a SaaS company increases customer lifetime value while keeping the customer acquisition costs constant . This translates into higher profitability.

Playbook of expansion tactics

• Segment users based on their use cases and map their user journeys .
• Conduct user journey analytics to identify the key moments with expansion opportunities.
• Collect and analyze feedback regularly to understand customer sentiment and areas for improvement.
• Align your product development efforts with the evolving needs of your customers and market trends to create new upsell and cross-sell opportunities.
• Tailor your messaging for various user segments to highlight the advantages and benefits of relevant features.
• Trigger upsell messages contextually to maximize their impact.
• Make it easy for users to purchase add-ons and upgrade inside the app.

The bottom-up SaaS business strategy turns the traditional sales process upside down. It’s not the C-suite execs who decide what tools to buy. Instead, the initiatives come from the actual user.

To achieve this, SaaS companies promote the product to its end-users. The goal is to show them the product value and gradually turn them into product champions who promote it from within.

If you’d like to see how Userpilot can help you implement the bottom-up strategy, book the demo!

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Why your business needs modern cloud applications more than ever

Recent events have reminded us of a basic truth: the world never stops changing. Economic and social disruptions – often arriving unexpectedly – can suddenly force you to rethink every aspect of your business. Your customers are another source of change, asking you to meet their fast-evolving needs with newer products, better prices, and more timely and effective customer service.

But change also can uncover profitable opportunities, offering outsized gains for businesses that can harness technology to capture new markets, launch innovative products, and introduce operational efficiencies that improve the bottom line.

Designed for change

Amid this volatility, businesses are looking for enterprise systems and tools that provide maximum flexibility, resilience, and security. Modern cloud SaaS applications are tailor-made for the job with composable, modular architectures designed to tackle continuous change and create a secure and resilient foundation for future growth.

Connecting your cloud applications and data on a single platform, as part of an integrated suite, can help you get more out of your SaaS solution. It allows you to bring consistent processes and a single source of truth across key business functions such as enterprise resource planning, supply chain management, human capital management, and customer experience. You can say goodbye to siloed HR and finance systems and mismatched data that can hamstring your business. Other synergies include having your front office and back office applications share the same data and benefit from faster response times, better forecasting and more accurate analysis.  Other examples can include: booking to revenue or service requests to costs on the back end. Deep integration across a complete suite of applications means you don’t have to deal with multiple software providers and the costly headaches that come with building and maintaining integrations.

AI Power / The Power of AI

The explosion in artificial intelligence (AI) is changing the business landscape yet again, helping to boost worker productivity and transform industries worldwide. To unlock its power, generative AI capabilities are increasingly being woven into the fabric of SaaS applications, giving businesses a versatile new tool to accelerate automation and innovation and ultimately deliver better business outcomes.

For example, by embedding AI-assisted tools into the applications – a standard feature of Oracle Fusion Cloud Applications – users can get instant machine-generated suggestions and summaries that vastly reduce the time it takes to complete tasks, helping improve customer and employee experience, and enable smarter, faster decision making. Users simply push an “AI Assist” button to unlock content and insights from the platform’s large language model while remaining in control of the output with the ability to review, edit, or ignore it as they see fit.

Oracle generative AI, embedded in Fusion, is designed to give users control on how these outputs are used in their business. Fusion Cloud Applications  customers can instantly access AI outcomes wherever they are needed—without leaving the software environment they use every day to power their business. With AI built natively into the applications, actionable insights, timely predictions, and time-saving automation are surfaced seamlessly in the flow of work. No cumbersome implementation or data scientist experience is needed.

Best infrastructure

Oracle Fusion Applications are powered by Oracle Cloud Infrastructure (OCI), which gives you everything you need to build new applications and extend your existing ones. The infrastructure is based on open standards, so you can connect your operations without the need for expensive-to-maintain interfaces, and you can easily integrate with third-party and custom applications.

Security is built into this next-generation infrastructure, which uses an isolated design to improve data protection, scalability, and performance. As part of a global ecosystem, the application suite can also connect securely to other systems and multi-cloud environments. Visibility across the entire cloud infrastructure – and throughout your business – is provided through a single administrative interface. This makes it easy to keep up with business change by providing a holistic view of the enterprise.

Built for you

Business applications don’t have to be boring. If designed right, they can provide a seamless and even enjoyable user experience that matches the best consumer shopping and travel apps. The Oracle Application Platform and Redwood Design System empower software developers to deliver that experience with a thoughtful set of prefabricated components, templates, and patterns, helping them create sophisticated and polished user interactions that are also upgrade safe.

Today, businesses are using the Redwood Design System and Oracle Applications Platform to quickly address changing customer demands. The same building blocks can be used to extend your Oracle Fusion Cloud Applications or add your own features without expensive coding. Plus, you can continue to enhance user experience and productivity as the embedded AI capability learns from people’s unique way of working.

Innovation that matters

When your business fails to innovate, you risk falling behind the competition while missing out on new revenue opportunities. Compared to on-premises systems, modern cloud software keeps you ahead of the curve by delivering automatic updates, so you can incorporate the latest features right away – or at your own pace – and respond to market shifts faster while spending less time maintaining your IT systems.

Continuous innovation is built into Oracle Fusion Cloud Applications with a consistent and modern user experience that makes it easy for people to complete their tasks, with more than 80% of the innovations based on customer feedback. Embedding AI into the SaaS applications helps accelerate innovation even more, enabling new business capabilities that weren’t possible before.

To learn more about Oracle Fusion Cloud Applications and how they can help your business spark growth and plan for the future,  click here to read the eBook .

Yaldah hakim rashid, director, cloud applications product marketing.

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