This article was updated on 26 March 2021. Software development outsourcing has become a commonplace practice of hundreds of companies, from small family firms to huge international corporations. This approach to software development reflects the growing globalization of the workplace…
How to Start a SaaS Company in 2022: Complete Guide
Now software as a service (SaaS) is actively gaining popularity. If you want to implement your project in this area, then you need to know how to start a saas company.
Today we will look at a detailed plan, thanks to which you will know everything about starting a saas company.
What is a SaaS Startup?
Before you start a saas business, you need to understand what SaaS Startup is.
First of all, SaaS startups are the ideal solution for running a software company. Such a project is a special model that helps users provide software for a fee, or rather by subscription. The maintenance of the project lies entirely with the providers. Users simply pay and use the solution that is convenient for them.
How to Build a SaaS Company Strategy
Strategic planning is an integral part of any business process. Therefore, before creating a software company, it is necessary to think over the strategy in detail.
To do this, you need to determine the main goals of the company. This is necessary to understand the path that the company will need to follow to develop and achieve its goals.
Before moving on to building a saas, the following tips should be taken into account.
Find Problem and Develop Solution
The first step is to identify the problem. Yes,yes, find the problem. Before moving on to starting a saas company, you should understand what problem your project will solve.
You can cope with the issue better than your competitors. For example, there are cloud storage services, but they lack new cool features. You can implement them in your project, thereby solving even more useful tasks.
Also, you can think about what service you currently lack and create it. Everything is simple.
For example, you do not have a good CRM system that is suitable for any type of business. That is a project that will be able to regulate the business processes of both a large enterprise, for example, for the sale of machine parts, and a small one for the delivery of gifts. Then you just need to implement it all. This way you will develop the perfect business idea.
This is an important step in starting a saas company. Before launching your project, you need to carefully study the market. This will help you understand whether it is worth implementing your business idea at all, whether it is worth investing in it, and in general, whether it will be a successful project.
To conduct a thorough analysis, you will gently examine three important points, namely:
- Industry overview
Such analytics are an integral part of creating a business strategy. To create a software company, you must figure out the size of the market in your niche. It is necessary to identify the latest trends in your sphere, what is now popular and relevant, whether mobile applications are used, and so on. This way you can stay competitive.
- Target market analysis
This is the stage where you determine who your potential customers are.
It is important to understand that you should not try to sell your services to everyone. This doesn’t happen. You need to learn more about your audience, their preferences, age, gender, type of activity, and so on. You should get to know them as much as possible and learn everything to the smallest detail. It will be good to make a scale with all necessary information.
This way you will understand what they are interested in and who these people are. This will help in developing a strategy, as well as the implementation of a large number of sales.
- Research competitors
When you know what your niche is and what exactly you want to implement, you need to find your competitors.
After you have compiled a list of companies, you need to research them and find out their features, as well as find out what they lack in projects. Thus, you can collect all the best from competitors, as well as close all the gaps and shortcomings.
When you know everything about your opponents, you can win.
Validate Your Idea
The next thing you need for building a saas is to make sure that your idea is genius.
The first step is to ask yourself the question: “Will this business idea bring what I want?”. Many immediately rush to the implementation of the project, but this is not always correct. You must conduct checks that will allow you to make sure how good your idea is and whether it will help you achieve your goals and reach the desired level of income.
To do this, it is enough to survey your potential customers. After you have analyzed the market and figured out who your audience is, you need to communicate with customers.
This can be done using an online survey or just going out and talking to the people you need. The main goal is to find out whether your project will be interesting to them, whether they would use it and whether it solves the problems of most people.
If you collect a large number of affirmative answers, then we can conclude that you are on the right path and will soon know how to start a saas company.
Don’t forget about your competitors. It is important not only to talk to your audience but also to analyze the number of your opponents. If there are none at all, this may indicate that your business idea will not succeed and there can be some risks. If there are competitors on the market, then you can try to implement your project.
Also, to test your idea to the fullest, you can create a prototype. That is a small development that will display the future capabilities of your SaaS project. Then you just need to see if people like this development, whether it is popular and whether it solves the necessary problems.
MVP is a strategy that has been proven in the market for a long time and is very popular. It is worth starting with small sketches and testing them, and this may already be enough to understand the whole situation.
By the name of this item, you can understand everything that you will need to do at this stage. Everything is pretty simple. Gather all the information and analyze it. Find out what you managed to learn, what you need to know, highlight the most valuable information, and sum up.
Without a marketing strategy now nowhere. This is a long-term plan that will help you realize all the commercial and corporate goals of the company. Thanks to this strategy, you will be able to promote your product and take the main places in your niche.
To build a marketing strategy, you need to analyze your SaaS applications and understand what their main features are.
The next step is to consider all possible effective strategies for promotion. One of which is a free trial for a certain amount of time. Many SaaS applications use this method of promotion.
This is a great way to promote your SaaS development as you give people the opportunity to choose and test. The main task here is to show all the benefits of development during the trial period of use.
Funding is a very important step in any business plan. Even at the stages of analysis, you need to decide on the amount that you need to implement the SaaS project.
But what about those who do not have enough funds for the project? Is it possible to create SaaS development without money? To do this, you need to connect with business partners who can help with investments.
Of course, it is best to implement some additional small projects that will generate income and can help you raise the necessary amount. If it didn’t work out, then today there are many platforms on the Internet where you can find real investors who will be ready to help with cool ideas.
Those who are wondering how to start a saas company should understand how the price of a future product is formed. Most often, the main tool for pricing SaaS developments is a subscription. That is, the customer pays the determination an amount per month for the use of the product.
This is much more convenient than demanding the entire amount at once for using SaaS software. After all, it is easier for a user to pay $10-15 dollars a month than to pay the whole amount of $100-150 at a time. Agree, a smaller amount looks much more attractive.
It is important not to be afraid to try different pricing policies. You need to understand what price will ideally suit your project. After all, a very high price will only reduce the number of customers. Too little price can underestimate your work, so try different options.
Set a lower price first, if you see that users are very actively buying a product, increase the price a little to the desired one and evaluate if sales have fallen. If sales continue steadily in high volume, then you have chosen the ideal price.
Metrics for Success
The more business numbers you analyze, the better. This fact must be accepted.
It’s important to track metrics that show key metrics. Thus, you can understand at what stage your business is and whether you are moving in the right direction.
That is, with the help of special indicators, you can learn more about:
- Current performance;
- Future performance;
- Identify problems at an early stage;
- See the overall picture of achieving goals;
- Track the correctness of decision-making.
Therefore, the analysis of indicators is necessary, even though sometimes it may seem tedious.
8 Steps to Start SaaS Startup
The above tips play a big role in creating a strategy. But to know how to build a saas business, we will move on to the main stages of opening our SaaS project.
Name for Your Startup
There is a saying: “As you name the boat, so shall it float”. Therefore, the names of the project are necessary things.
Choose a simple memorable name. It should be related to the company profile. Also, the name should be universal and eternal, not trendy.
Sketch out as many options as possible, look at the name of competitors and come up with something better.
If no names come to mind, you can use special tools that help with this. There are a lot of them on the Internet now. All you need is to drive in the search bar “Name Generator”.
Before you figure out how to start a saas business, you should review the product requirements. This is all the necessary data that can give more information about the product, tell its story, show its strengths and its advantages.
You need to make the requirements in such a way that the final product can solve all the pain points of the consumers.
To do this, you need to describe:
- Design features;
- Advantages of the product;
- As used in real life;
- The problem and its solution;
- Examples of use by buyers.
This will help you create all the requirements and further tell about the product from the best side.
Select the Development Team
The next point of our guide on how to build a saas company is the search for developers. This is a very essential stage on which a lot depends.
To find a good developer, you need to clearly understand who exactly you are looking for. Therefore, you need to decide what kind of person this should be, what skills he should have, and what the cost of his services should be.
Remember that not only his skills and abilities are important, but also his inner world. You should feel comfortable working with such a person. It is important that you feel each other and understand each other perfectly.
Finding a Designer
Design is one of the most important aspects of a SaaS project. Therefore, the search for such a specialist must be treated responsibly.
Quality design will make your application perfect. Thus, you can not only attract customers but also keep them.
Now there are a huge number of sites where you can find good specialists, both beginners, and people with extensive experience. Your task is to view as many candidates as possible, their portfolios, and then select the 10 best specialists.
Then you will have to communicate with them, get to know them better, and then you will understand which of them is the best.
Building The Product
Creating a quality product from the very beginning is a difficult task. Here you need not only time but also serious knowledge of specialists.
Therefore, at the stage of creating a product, you should discuss with the developers how much time it will take, what is needed for implementation, and how many hours will be needed to create the whole project.
If you have chosen the right developer, you will be able to establish the right communication and receive all the necessary information about the status of the work.
Don’t forget the law. Before opening a SaaS project, read all the rules and formalities that are necessary to implement a business.
To do this, you need to accurately determine the niche in which you work and register your business.
Much depends on the country of residence. Somewhere just registration is enough, but somewhere a more serious approach to the procedure is required. Do not neglect this and do everything according to the rules so that later there will be no problems with the state and the law.
Advertising and PR
Many entrepreneurs make a big mistake when they invest in design, development, and other processes, but forget about advertising. Now you can’t do without it, since there are a lot of analogs of your SaaS project on the market. Therefore, it is important not only to stand out and be special but also to pay special attention to promotion.
Today there are a huge number of ways to promote. Your task is simply to decide which ad to choose. You can target through Facebook and Instagram business pages or use Google ads. You can do it yourself.
Although you always have the opportunity to contact a promotion specialist or add him to your team. Thus, you will always be sure that you will regularly have customers and potential buyers.
Track Your Progress
Now that you know how to create a saas company and you have launched your startup, all you have to do is track progress.
This can be done using the following metrics:
- Analysis of the number of buyers who abandoned your SaaS services this month. This is especially true if you update regularly. In this way, you can analyze whether users liked the update or not.
- Monthly income. This is an ideal KPI for SaaS products. You track every month how much profit you received. If you see a decrease in profitability, you can analyze and understand why.
- Average revenue per user. This is one of the classic and simple indicators that display the income that you receive on average from one client.
By regularly tracking your progress, you will be able to achieve your goals faster and increase your income.
SaaS Startup Ideas in 2022
Finally, let’s look at a few ideas that you can take as the basis of your project.
1. Project for property management
The real estate market is always very profitable and promising. Therefore, you can implement a project that will help with the search for housing from the owners. For convenience, you can make a chat to communicate with the owner, as well as parameters for an easy search of the options you need.
2. Financial project with electronic payments
The financial sector is no less profitable than real estate. Therefore, you can create a special platform that will allow you to create electronic wallets and electronic cards for convenient online payments.
3. Educational project
Now is the time when people want to learn as much information as possible, develop and get better, so educational services are more relevant than ever.
In connection with the current situation in the world, more and more universities and schools have begun to study remotely. Therefore, you can make a convenient platform for distance learning, where you will be able to communicate with the teachers, track your progress, conduct remote lessons, attach the necessary materials and receive grades. You can create a SaaS platform that will be the same for all institutions because there will be everything you need in one place.
The Final Word
Summing up, we can conclude that to create a SaaS company, you need to carefully analyze the market, create a strategy, find a good team and move step by step towards the goal.