The idea of a business model based on a limited physical infrastructure with unlimited potential has opened the doors to a new wave of ultra-successful entrepreneurs in the 21st century.
Not only does software-as-a-service (SaaS) minimize dependencies, but it is also easily scalable, and therefore highly lucrative. The SaaS business model is a great one today. There is a strong demand for SaaS products and this is why numerous SaaS business based startups are sprouting up.
SaaS business is a lucrative model for the ones who don’t want the high cost of infrastructure and not sure about the scale of business. SaaS lets your business flexibility to grow and shrink as per the needs.
But rather than boast about the revolutionary power of the SaaS business model, this article offers a reality check, to help you weigh your chances of building an ultra-successful SaaS business development in 5 years.
It dissects the two main components of the business model: the philosophy driving the SaaS business, and the product of the SaaS business.
Challenge 1 — How can you tell the difference between a great idea and a great business?
It is a costly error to assume that a great idea is tantamount to a great business. It is said, that every idea is great until you get a punch in your face.
While you may be able to envision all the great advantages that a product idea has to offer, you may hit many unforeseen walls that prevent your product from accomplishing the purpose you intended during the implementation.
An idea does not ensure business success on the ground. There are multiple factors associated with the business to thrive in reality.
Feasibility studies sound mundane, but unfortunately, there are many startups that fail because they failed to carry out financial projections with due diligence.
Unrealistic expectations may rise up with the false research data and this can only compete with the deep research of the negative influential factors.
To tell if an idea is good for a SaaS business, you need to carry out extensive feasibility studies in order to determine the value of parameters such as the Total Addressable Market (TAM), the Customer Acquisition Cost (CAC), the most optimal pricing strategy, and much more.
These are truly significant matters for research. The total addressable market gives you a clear estimate of how much can you grow your business in a monopolistic market whereas Customer acquisition cost can give you an idea of the efforts you need to give.
Not only do you need to consider these parameters to determine the cost to get your SaaS development afloat, but you must also allow them to inform you of the marketing strategy for your SaaS web application development.
When starting out, the two parameters that are the most critical to the survival of SaaS business development companies is the cost of running the business until it becomes profitable, and the Churn rate — the rate at which SaaS business development services lose costumers.
Challenge 2 — Can you tell the difference between building a product and building a business?
First-rate SaaS development services know that there is more to a successful SaaS web application development than viable software. The set of skills and knowledge structure required to build a business is different from those required to build a SaaS development.
You need to build up a deep repertoire of knowledge about building a SaaS business. Immerse yourself in relevant resources online, including blog posts, podcasts, and newsletters that talk about SaaS.
To build a successful SaaS web application development, you need to keep track of basic SaaS parameters such as the Churn Rate, Customer Acquisition Cost (CAC), Customer Satisfaction Cost (CSAT), Average Revenue Per Account (ARPA), Lifetime Value (LTV), and Monthly Recurring Revenue (MRR). You need to come up with a veritable plan for tracking these matrices.
Challenge 3 — Can you vouch for your networking skills?
Excellent SaaS business development services owe much of their success to the outstanding networking skills of their founders. An excellent networking strategy revolves around stepping up to the plate as the founder and becoming the face and the voice of the SaaS web application development.
There are a host of communication mediums that can serve to propagate brand awareness effectively, but the most effective are the ones that are spearheaded directly by the founders.
When the founder of a SaaS business development communicates directly and frequently with their customers, the brand projects sterling transparency and credibility and easily elicits trust and respect from the customers.
Challenge 1 — Can you create software to meet your needs in a way that makes it of great use to others too?
For starters, it would be more difficult to start off trying to solve someone else problem. Instead, it is a lot more inspiring to start off creating a product to meet your own needs.
You’ll find it easier to fine-tune the granular details of the software to meet your needs because it is easier to understand your own needs from the inside out.
You’ll be able to find much greater insight to implement the SaaS business development when the product addresses your own problems, much more than you would when trying to solve other people’s problems, regardless of the depth and breadth of market research and analyses gathered.
When your SaaS web application development is created to address your own needs, you’ll implement it with greater passion and a clearer vision.
Challenge 2 — Can you build a product that is incredibly simple to use yet powerful?
A first-rate product must strike a balance between simplicity and efficiency.
First, a product needs proper marketing, which lets the user check its UI, whereas the next step comes with checking the actual usability of the product. It’ll catch on for the long haul because many users will still find your SaaS development resourceful a long time from now.
If your project is simple to use and easy to understand, it goes with the flow of the market and customers can easily adapt to the familiar technology.
Building a simple product saves both the admin and the user’s makes for a seamless user experience. When the number of support needs remains at the bare minimum, it frees up resources to be dedicated to the pursuit of other goals.
Another key benefit of building a simple SaaS web application development is that once a product sits well with users, it’ll become the preferred product that they gladly recommend to others. Ease of use is a primary consideration when opting for suitable SaaS development services because it can make or break the user experience.
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Other crucial Criteria for Building an Ultra Successful SaaS Business Development
1. A Robust Marketing Strategy
Your marketing strategy must explore the most expedient marketing channels. Look for ways to steal traffic from your competitors ethically.
The estimated total market is always divided into multiple competitors and there too the brand loyalty is also a significant factor. A good marketing effort makes the implicit way of winning the customer’s trust and can break the monopoly with the proper strategy.
Therefore, you must devise an SEO strategy that incorporates keywords in a blog and social media posts that resolve “core problems.”
2. Highly Responsive Support
Rather than create a support team that operates as a cog in a machine, it is more expedient to make customer care a collective responsibility of the entire staff. Nevertheless, your customer care needs to be highly responsive.
Every product needs valued support. This is a great customer retention policy for investing in the call centers, but you can also let this work done by your team.
Outsourcing your work can cost you less quality. Whereas if your business is small, you can keep this work in-house. And if your work is large, you can outsource the work while keeping a check with the on-premise team.
Once a customer comes to you, it gives a great strategy for building a long-term relationship and crack a greater deal ahead.
3. Being Mindful of Your Company Culture
Your company culture should be established from day one, reflecting your values and ambitions. By doing so from the outset, you’ll be able to assemble the best team for your development right from the start.
Your team is your actual asset. This asset is important because this actually makes your business grow. Good team management makes a happy workforce, which goes on for years without depreciation.
Conclusion: Reasons Why SaaS Business is Lucrative
Your ability to assimilate and run with the aforementioned suggestions can determine your chances of building an ultra-successful SaaS web application development within 5 years.
SaaS business is obviously the future of the market and there are many competitors already available in the niche. What influences customer is the ease of adoption, simplicity, effortless working, imperative customer help desk, and the regular follow-ups.
A business deal never ends with the product sale. In fact, it starts with the first sale and carries on for the long term.
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Tarun Nagar is the Founder & CEO of Dev Technosys SAAS application development company USA. With 10+ years of experience of enabling then Startups which are now global leaders with creative solutions, he is differentiated by out-of-the-box IT solutions throughout the domain. He is known for his visionary qualities and adaptability for technology and trends, passionate as he is in every aspect dedicated to making IT simple, accessible, and approachable for business enterprises.