If you’ve decided to start your own SaaS business, you are not alone. According to statistics, the global SaaS workload grew to 206 million in 2018 and it’s predicted to reach 380 million by the year 2021. It’s safe to say that venturing into the world of Software as a Service is a smart business move.
The SaaS market offers incredible opportunities for growth and success, but only if you know the basics of how to succeed. A large number of startups fail simply because business owners don’t know how to get their business off the ground.
If you don’t want to make the same mistakes, follow these simple but crucial steps for growing a SaaS business.
Just like you can’t build a house without a firm foundation, you can’t build a business without a good business plan. Even if it might work for a short time, it will all come tumbling down before you even realize what happened.
A well-written business plan is essential for business owners. It helps them lay out their goals and track progress as the business grows. However, the process of making a detailed plan can be tedious and time-consuming, so if you haven’t made one before, you should use a business plan template.
Business plans are important for various reasons. They can help you with the following:
- Making critical decisions. When you create a business plan, you can make the most critical business decisions ahead of time. If you think about all the major components of your business when you start writing your plan, it will be easier to handle them when the time comes.
- Avoid big mistakes. There are many reasons why startups fail. With a good business plan, you can see potential mistakes before you make them and that is how you can avoid them. Things such as no market need and lack of capital won’t be an issue for you if you plan ahead.
- Set better goals. Without a plan, goals and objectives become arbitrary and you aren’t as focused to achieve them. When you have all of your goals written down, it will be easier to set long-term strategies.
Focus On PR
A lot of new companies want to achieve great results in their early stages of development, and that is what causes failure down the line. If you focus on big, and often unattainable goals, you will miss the small ones which can easily be achieved.
A good PR campaign is essential in attracting new clients and gaining publicity for your company. Most business owners want to reach a global audience right away with things such as widespread publications and television appearances.
But as a startup, you need to focus on the smaller goals first before you can hope for anything larger, especially the ones that help your brand become more visible.
Startup PR is much different than PR for big companies. Here are the basics you need to cover if you want your PR efforts to be a success:
- Be the best version of yourself. Before people flock to your website and social media pages, you need to make sure they are ready for customers. Present your company in a good light with a professionally-built website and well-organized social media pages.
- Put yourself out there. After you’ve completed the first step, it’s time to bring people in. Showcase your product on websites designed for startups, and talk to media channels that focus on your target audience. Intrigue people to come and visit your website and perhaps even try out your product.
- Show off your expertise. If you manage to complete the first two steps successfully, you will have the attention of publications and potential customers.
The next step is to visit industry events and show that you are an expert in your field. You can also host events to build media relationships. Just make sure to offer interesting content that will grab your audience’s attention.
Apply The Appropriate Marketing Strategies
A SaaS business works differently than businesses in other industries, so it needs to be marketed in a different way. There are a few reasons for this:
- When you work with SaaS, you don’t have a physical product to show to your customers, so they need to believe you when you say that your product can solve their problems.
- Customers will undoubtedly do an online search to compare different solutions.
- A large number of customers log into the application once and never return again because they can’t see its full potential
Due to all of these reasons, your marketing strategies need to focus on the following goals:
- Attract the right audience. For a SaaS company to start growing, potential users need to visit its website. These visitors should be people who are already experiencing the problem to which there is one solution: your product.
- Build a relationship with your leads. You can do this by using a combination of emails, quality content, and other channels, which will position your brand as an authority in your field. This will convince leads to buy or at least test out your product.
- Engage your users. One of the oldest marketing tricks is to offer a free trial or demo version of your product. But if you want to convert users into paying customers, you should optimize your free trial in a way that shows the true value of the product.
Take Advantage Of Influencer Marketing
Influencers play a much bigger role in the world of marketing than some people might realize. Newer generations spend a lot of time online and trust the opinions of influencers much more than they trust traditional advertisements. A company could benefit greatly from learning how to collaborate with influencers.
There are countless influencers who work for different types of compensation, so you need to find the ones that will fit your budget and those who are followed by your target audience. These are the influencers in your industry or those from different industries that use your platform.
When you track down the ones you think would be good for your business, start building a relationship with them. You can do this by engaging with them on social media, following them, and sharing their content.
When the influencer becomes more familiar with your brand, send them an email where you offer a free license or offer to pay them for their services.
Valuate Your Business
You always need to be aware of how much your business is worth. As time goes by and the business keeps growing, its value will grow as well. And since SaaS is a unique and growing industry, valuation can be a little bit tricky at times.
Evaluating your business isn’t an exact science. While some people compare their company to competitors or the public market, it’s important to remember that the fine details matter here. Things such as why a competitor sold their business and how large-scaled it was are essential for valuation.
Small businesses that are valued at under $5,000,000 use SDE (sometimes also called seller discretionary cash flow). SDE represents the profit the business makes after all the costs and expenses are subtracted from the gross income.
This is a great way to evaluate your business while you’re still a small startup. However, as your company grows and you build your brand, EBITDA (earnings before interest, taxes, depreciation, and amortization) is applied.
There are many other factors that apply here, and it would be helpful to learn more about SaaS valuation so you can always be sure of how much your business is worth.
While it could be risky to start your own SaaS business, the reward outweighs the risks greatly. As long as you have a solid plan from the start and know how to market your product, you will see an increase in business in a relatively short time.