The software as a service (SaaS) industry is steadily rising. Organizations worldwide use customer resource management, enterprise resource planning, web hosting, and other SaaS applications to streamline the business. In fact, in 2021, the SaaS industry is estimated to be worth 145.5 billion dollars.
If you’re thinking of diving into this industry, now’s the best time to do it. The process isn’t as complex as some people might assume. You just have to know what to do. So from conceptualizing your business to creating SaaS agreements, here’s a systematic guide to launching a SaaS startup business.
Identify a Problem to Address
The first step to launching a successful SaaS business is identifying what problem you want to address. Take time to research the SaaS industry at large and the different industries that use SaaS solutions. This makes it easier to discover a specific problem you want to solve or a SaaS function you want to build on.
It’s better to nail your niche rather than be a jack-of-all-trades because it makes you more competitive.
For example, you would rather hone the features of your accounting SaaS solution for small accounting firms rather than trying to squeeze other functions, like project management and customer relationship management, into it. By focusing on one thing at a time, you can pinpoint and adjust to what your target demographics needs. You can start exploring other options once your initial SaaS offering is successful.
Find a Co-Founder to Help You
Now that you have an idea of what type of SaaS solution you want to develop, it’s time to pitch your ideas to potential partners or co-founders. You might want to gain sole credit for your ideas but two heads are always better than one. And if you’re new to the SaaS industry, a co-founder who has experience in the industry could provide valuable insights that you wouldn’t get from the most extensive research.
Having a co-founder also means you have someone to rely on when facing the challenges of building a SaaS company, establishing your brand identity and visibility, and rallying for customer retention.
When looking for a co-founder, however, look for someone who matches your passion and complements your skills. You need to have dynamic work chemistry. But you also need to have a diverse set of skills so that you can share ideas and perspectives that address challenges faster.
Secure Sufficient Funding
Next comes one of the toughest parts of building a business. You have to secure the funding. If you have sufficient funds, you might not need to look at other options. Oftentimes, however, a startup business is venture-backed. You have to pitch your ideas to prospective investors and get them to support you.
When pitching your ideas, remember to stay transparent about your financial growth. Will you aim for slow, steady growth? Or are you eyeing a quick rise to the top of your industry? Either way, you have to back it up with research and statistics that would put potential investors or funders at ease.
Develop the SaaS Solution
Finally, it’s time for the most crucial part of building a SaaS business. While you might be knowledgeable about SaaS at this point, it’s wise to hire an experienced developer to design and modify your platform.
There are many software designers and developers who work as consultants or on a freelance basis. You may opt for project-based staff, too. Or if you want to make sure that someone on your team can navigate your SaaS offerings like the back of their hand, your best option is to hire someone full-time.
Draft SaaS Agreements
Considering the nature of your business, which operates over the internet or in the cloud, you have to be careful with your terms and conditions. It’s best to consult an attorney who knows the inner workings of SaaS. They will help you draft an agreement that sufficiently protects your business and its users.
A SaaS agreement serves as a legal contract which states your rules and limitations as the software developer. The contract also states how your client can access and use the software. It should also include clauses for data ownership and security, along with subscription renewal and termination guides.
A SaaS agreement is similar to a licensing agreement. But while licensing agreements deal with copying and installing some type of software in the client’s hardware, the former focuses on the permission to use your software on their devices. A SaaS agreement is renewed every time the subscription is renewed.
Take advantage of the rising need for SaaS services and launch your new business today.