The truth is that you can actually start a SaaS business if you are not a software developer. All you need to do is to make sure you have a full grasp of the problem you want to solve, and then assemble software developers to work with you to achieve the goal of owning a SaaS business.
To start with, what is a SaaS business? SaaS stands for “Software as a Service,” and it refers to a business model in which software is delivered to customers over the Internet as a service, rather than as a product that they purchase and install on their computers.
In a SaaS business, the software is hosted on the provider’s servers, and customers access it through a web browser or other application. The provider typically charges a subscription fee for access to the software, and customers can usually scale their usage up or down as needed.
Interestingly, SaaS businesses can offer a range of software solutions, from productivity and collaboration tools to customer relationship management systems, accounting software, and more. The SaaS model has become increasingly popular in recent years due to its scalability, flexibility, and cost-effectiveness, making it an attractive option for businesses of all sizes.
Steps to Start a SaaS Business If You Aren’t a Software Developer
Conduct Market Research
Conducting market research is a critical step for any business, including a SaaS business. You should start by determining the specific audience that you want to target with your SaaS product. This will help you to understand their needs and preferences.
Next, you should research and analyze your competitors’ products, pricing, marketing strategies, and strengths and weaknesses.
This will help you to position your product in the market and identify opportunities for differentiation. Gather feedback from potential customers by conducting surveys and interviews. Ask about their pain points, needs, and preferences, as well as their thoughts on your product and pricing.
You are also expected to keep up-to-date with the latest trends and developments in the SaaS industry. This can include emerging technologies, customer preferences, and market shifts. Test your product with a small group of potential customers to gain feedback on usability, functionality, and other key factors.
This can help you to refine your product and ensure that it meets the needs of your target market. Lastly, once your product is live, use analytics tools to track usage patterns, customer behavior, and other metrics. This will help you to identify areas for improvement and measure the success of your marketing efforts.
a. Who is the Target Market for SaaS Business?
The target market for a SaaS (Software as a Service) business can vary depending on the specific product or service being offered. However, in general, the following groups tend to be good targets for SaaS businesses:
- Small and medium-sized businesses (SMBs)
- Enterprise businesses
- Startups that need tools to grow and scale their business.
- Individuals and freelancers who need specific tools to manage their work. Examples include productivity and collaboration tools, accounting software, and design tools.
b. Is SaaS Business a Profitable Business?
Yes, SaaS business is a profitable business. Available data shows that the market is growing and businesses are leveraging software to manage and scale up their businesses.
c. Are There Existing Niches in the Industry?
No, there are no niche ideas when it comes to SaaS business simply because SaaS business is a niche idea in the technology industry.
d. Who are the Major Competitors?
e. Are There County or State Regulations or Zoning Laws for SaaS Business?
There are no specific county or state regulations or zoning laws in the United States that apply specifically to SaaS businesses. However, like any other type of business, SaaS businesses may be subject to certain regulations and zoning laws depending on their location, industry, and the nature of their operations.
- Business licensing
Most states and local jurisdictions require businesses to obtain a business license in order to operate. The specific requirements and procedures for obtaining a business license vary depending on the location.
Some cities and towns have zoning laws that regulate the use of commercial properties. SaaS businesses may need to ensure that their chosen location is zoned for the type of business they plan to operate. SaaS businesses may be subject to state and local taxes, such as sales tax and income tax, depending on their location and the nature of their operations.
SaaS businesses that handle sensitive customer data may be subject to privacy regulations such as the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). SaaS businesses in certain industries, such as healthcare or financial services, may be subject to industry-specific regulations that govern the handling of sensitive data.
We usually advise SaaS business owners to make sure they research the specific regulations and zoning laws that apply to their location and industry to ensure compliance and avoid potential legal issues. Consulting with a lawyer or other professional can also be helpful in navigating regulatory requirements.
f. Is There a Franchise for SaaS Business?
No, there are no franchise opportunities for SaaS businesses.
g. What Do You Need to Start a SaaS Business?
- Business plan
- Legal structure
- Licenses and permits
- Standard office facility in a suitable location
- Equipment and working tools
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a SaaS business are;
Creative SaaS Business Name ideas
- Mike Michael® SaaS Company, Inc.
- Ken Bennard® SaaS Company, LLC
- Kamely Sensei™ SaaS Company, Inc.
- Leonard Granville® SaaS Company, LLC
- Austine Tyson® SaaS Company, Inc
- Fred Nath® SaaS Company, Inc.
- Tadley Williams® SaaS Company, Inc.
- Edwards Huges™ SaaS Company, LLC
- Jarome Classics© SaaS Company, LLC
- Web Solutions® SaaS Company, Inc.
- Seedy Tech™ SaaS Company, Inc.
- Lambert Solutions® SaaS Company, Inc.
- Troost Halley® SaaS Company, LLC
- David Rico® SaaS Company, LLC
- Eric Tech® SaaS Company, Inc.
- Camel Solutions® SaaS Company, Inc.
- Universal Solutions© SaaS Company, LLC
- Binary Solutions® SaaS Company, Inc.
- Willy Mackson® SaaS Company, Inc.
- Sky Solutions© SaaS Company, Inc.
Register Your Business
a. What Type of Business Structure is Best for SaaS Business?
The best type of business structure for a SaaS business depends on several factors, including the size of the business, the number of owners, and the level of personal liability exposure the owners are willing to accept. However, we usually recommend a limited liability company (LLC) for SaaS business.
An LLC is a popular choice for startup businesses because it offers personal liability protection for the owners while allowing them to be taxed as a pass-through entity. This means that the profits and losses of the business are passed through to the owners’ personal tax returns, avoiding double taxation.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a SaaS Business?
- Business License
- Building permit
- Fire safety license and permit
- Professional license
- Zonal permit.
d. What Type of Certification is Needed to Open a SaaS Business?
- AWS Certified Developer – Associate
- Microsoft Certified: Azure Developer Associate.
- Google Cloud Certified – Professional Cloud Developer
- Salesforce Certified Platform Developer I
- Oracle Certified Professional, Java SE 11 Developer
- Red Hat Certified Enterprise Application Developer
- Scrum Alliance Certified Developer.
e. What Documents are Needed to Open a SaaS Business?
- Business plan
- Business License
- Employer Identification Number (EIN)
- State-specific licenses and permits
- Building permit
- Fire safety license and permit
- Professional licenses and certifications
- Zonal permit
- Insurance policies
f. Do You Need a Trademark, Copyright, or Patent?
A SaaS business may require different types of intellectual property protection depending on the nature of its products and services.
A SaaS business should consider registering a trademark for its company name, logo, or product name to protect its brand identity. A SaaS business may also decide to copyright its software code, website content, and other creative works.
Lastly, while software patents are controversial and may be difficult to obtain, a SaaS business may want to consider patent protection for any novel and innovative features of its software.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a SaaS Business?
When it comes to starting a SaaS business, the startup costs vary. It could range from as low as $15,000 to over $150,00. Please note that the cost of securing an office facility, equipment, furnishing, and the salary of your employees are part of this cost.
b. What are the Costs Involved in Starting a SaaS Business?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $1,800.
- Marketing, Branding, and Promotions – $2,000.
- Business Consultant Fee – $2,500.
- Insurance – $2,800.
- Rent/Lease – $60,000
- Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $60,000
- Store Equipment (cash register, security, ventilation, signage) – $2,350
- Equipment, Furniture, and Software – $15,000
- Website: $1,200
- Opening party: $5,000
- Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a SaaS Business?
- The size of the SaaS business and the solution they want to solve
- The choice of location
- The required licenses and permits
- The cost of hiring and paying a business consultant and attorney
- The cost of branding, promotion, and marketing of the SaaS business
- The cost of furnishing and equipping the SaaS office facility
- The cost of the insurance policy covers
- The cost of registering the business
- Cost of recruiting and training your staff
- The cost of the grand opening of the SaaS business.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
No, you don’t need to build a new facility for your SaaS business because it is a business that you can operate from a rented or leased office facility. As a matter of fact, you can operate a SaaS business from a shared office facility.
e. What are the Ongoing Expenses of a SaaS Business?
- Employee salaries and benefits
- Rent and utilities
- Equipment and supplies such as computers, software, and peripherals, as well as office supplies such as paper, ink, and pens.
- Marketing and advertising
- Professional development
- Maintenance and repairs
- Software licenses.
f. What is the Average Salary of your Staff?
- Chief Executive Officer (Owner) – $120,000 per year
- HR Manager- $60,000 per year
- Software Developers – $80,000 per year
- Account Manager – $52,000 per year
- Business Development Manager- $50,000 per year
- Administrative Assistant – $35,000 per year
- Tech Support (Customer Services Executive) – $32,000 per year
g. How Do You Get Funding to Start a SaaS Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Edwards Huges™ SaaS Company, Inc. is a SaaS (Software as a Service) company that provides cloud-based solutions for businesses of all sizes.
Our platform offers a range of tools and applications to help businesses streamline their operations, increase productivity, and achieve their goals. We pride ourselves on delivering cutting-edge technology that is easy to use and highly customizable.
Our flagship product, BusinessSolutions™, is an all-in-one business management solution that includes features such as project management, team collaboration, time tracking, invoicing, and more. With BusinessSolutions™, businesses can manage their entire operation from a single platform, saving time and resources while increasing efficiency.
At Edwards Huges™ SaaS Company, Inc., we are dedicated to providing exceptional customer support and service. Our team is available 24/7 to assist customers with any questions or issues they may have. Additionally, we offer a range of training and education resources to help customers get the most out of our platform.
We have a proven track record of success, with a growing customer base and consistently positive reviews from our users. Our revenue has steadily increased year-over-year, and we have plans for continued growth and expansion in the coming years.
b. Products and Service
SaaS (Software as a Service) – (BusinessSolutions™).
c. Mission Statement
Our mission at Edwards Huges™ SaaS Company, Inc. is to empower businesses with innovative and easy-to-use SaaS solutions that enable them to streamline their operations, increase efficiency, and achieve their goals. We are committed to providing exceptional customer support and service to ensure our customers get the most out of our platform.
At Edwards Huges™ SaaS Company, Inc., our vision is to be the leading provider of SaaS solutions for businesses worldwide. We strive to continuously innovate and improve our platform, delivering cutting-edge technology that sets us apart from the competition.
d. Goals and Objectives
The goals and objectives of a SaaS business are to help businesses of all sizes achieve success by providing them with the tools (software) they need to thrive in today’s rapidly evolving business landscape.
e. Organizational Structure
- Chief Executive Officer (Owner)
- HR Manager
- Software Developers
- Account Manager
- Business Development Manager
- Administrative Assistant
- Tech Support (Customer Services Executive).
a. SWOT Analysis
- Strong brand recognition and reputation in the industry
- High-quality and customizable software that meets the needs of a wide range of businesses
- Highly skilled and experienced team of developers, designers, and customer support professionals
- Robust security and data protection measures to ensure customer privacy and compliance
- Proven track record of success, with a growing customer base and steady revenue growth.
- Limited geographic presence, with a majority of customers located in specific regions or industries
- Heavy reliance on a single product or suite of products, with limited diversification in the product portfolio
- Limited marketing and advertising efforts compared to larger competitors
- Dependence on third-party cloud infrastructure providers, which may impact scalability and performance.
- Expansion into new markets and industries, both domestically and internationally
- Diversification of the product portfolio to include complementary solutions and services
- Collaboration with strategic partners to enhance product offerings and increase market reach
- Investment in marketing and advertising efforts to increase brand awareness and customer acquisition
- Integration with emerging technologies such as AI and blockchain to stay ahead of the competition.
- Intense competition from established players in the SaaS industry
- Rapidly changing technology landscape, with new and disruptive technologies emerging frequently
- Data breaches and cyber attacks that can undermine customer trust and confidence
- Changes in government regulations and compliance requirements that may impact product development and operations
- Economic downturns or other external factors that can negatively impact customer demand and revenue growth.
b. How Do SaaS Businesses Make Money?
SaaS (Software as a Service) businesses make money by providing software applications to customers via the Internet on a subscription basis. Here are some common ways SaaS companies make money:
- Subscription fees
- Usage fees
- Upselling and cross-selling
- Customization and consulting fees
- Advertising and affiliate marketing.
c. Payment Options
- Credit or Debit Card
- Electronic Payment Systems such as PayPal or Venmo
- Bank Transfers.
d. Sales & Advertising Strategies
- Create high-quality blog posts, eBooks, webinars, and other types of content that educate potential customers about the benefits of your software.
- Optimize your website and content for search engines to improve your visibility and attract more organic traffic.
- Use pay-per-click (PPC) advertising on search engines and social media platforms to drive targeted traffic to your website.
- Encourage your existing customers to refer their friends and colleagues to your software. Offer incentives such as discounts or free months of service for successful referrals.
- Offer potential customers a free trial of your software to try it out before committing to a subscription.
- Use social media platforms such as LinkedIn, Twitter, and Facebook to build relationships with potential customers, share content, and promote your software.
- Partner with other companies in your industry to promote your software to their customers.
a. How Much Should You Charge for Your Product/Service?
The cost of subscribing to SaaS solutions can vary widely depending on a variety of factors, such as the specific software application, the features and functionality included, the number of users, and the duration of the subscription.
b. How Much Profit Do SaaS Business Owners Make a Year?
The amount of profit that SaaS business owners make in a year can vary widely and is influenced by many factors, including the size of the business, the pricing model, the level of competition, and the market demand for the product or service.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the SaaS business in terms of the number of subscribers they can accommodate per time
- The service offerings of the SaaS business
- The location the SaaS business is covering
- The management style of the SaaS business
- The business approach of the SaaS business
- The advertising and marketing strategies adopted by the SaaS business.
- The number of years the SaaS business has been in business
d. What is the Profit Margin of a SaaS Business Product/Service?
On average, the profit margin for SaaS products ranges from 23 percent to 35 percent, depending on the location, and service offerings.
e. What is the Sales Forecast?
Below is the sales forecast for a SaaS business. It is based on the location of the business and other factors as it relates to such startups in the United States.
- First Fiscal Year (FY1): $450,000
- Second Fiscal Year (FY2): $550,000
- Third Fiscal Year (FY3): $750,000
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for SaaS Business?
- The demography of the location
- The demand for your solutions in the location
- The number of corporate organizations in the location
- Accessibility of the location
- The number of SaaS companies and related service providers in and around the location
- The local laws and regulations in the community/state
- Traffic, parking, and security et al.
b. What State and City is Best to Open a SaaS Business?
- San Francisco, California
- New York City, New York
- Houston, Texas
- Chicago, Illinois
- Atlanta, Georgia
- Boston, Massachusetts
- Dallas, Texas
- Los Angeles, California
- Washington, DC
- Seattle, Washington.
c. What Equipment is Needed to Operate a SaaS Business?
- Internet Connection
- Phone system (landline, VoIP service, or a cell phone.)
- Remote support software (TeamViewer, LogMeIn, and RemotePC.)
- Helpdesk software (Freshdesk, Zendesk, and Jira.)
- Backup solutions such as an external hard drive, cloud storage, or a backup service.
- Accounting software (QuickBooks, Xero, and FreshBooks)
- Office equipment such as computers, headsets, printers, scanners, and office supplies to manage bookings and finances.
Although it is possible to run a SaaS business as a one-man show, if you want to build a business that will grow, then you should consider hiring key employees to occupy various positions in your organization. The truth is that hiring employees can allow you to take on more clients and increase your capacity for delivering high-quality work.
Launch the Business Proper
Organizing an opening party for a new SaaS business can be a good way to introduce your business to the community and create awareness about your services. However, whether or not to have an opening party is ultimately a decision that depends on your individual business and goals.
If you want to go ahead to organize a proper launch for your SaaS business, then you must make sure to invite potential clients, key stakeholders, and other members of the community who may be interested in your services.
a. What Makes a SaaS Business Successful?
- Being consistently reliable
- Very minimal downtime
- Excellent customer service
- Efficient operations
- Compliance with regulations
- Hiring skilled and knowledgeable employees and providing ongoing training that will ensure you deliver high-quality services.
b. What Happens During a Typical Day at a SaaS Business?
- The office is open for the day’s work
- Routine staff meetings, briefing, and de-briefing
- Product development
- The customer support team may be responding to customer inquiries or issues, either through email, chat, or phone support.
- Sales and marketing
- Collaboration and communication
- Data analysis and reporting
- Planning and strategy
- Administrative tasks such as billing, invoicing, and managing supplies and equipment.
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a SaaS Business?
- Technical expertise
- Project management skills
- Excellent customer service skills
- Attention to details
- Interpersonal skill
- Time management skills
- Business management skills
- Problem-solving skills
- Work experience in the SaaS and technology industry
- Experience in managing people
- Experience in software development
- Experience in business administration.