SaaS is an acronym for software as a service, which means that the software is hosted on the cloud and can be accessed by your clients over the internet. This means that there is no need to install anything at all on your own computers or servers, which saves you time, money and resources. In this article we’ll discuss some of the main reasons why you should start a SaaS business today.
Easy to get started:
SaaS is a great way to get started if you have limited capital or don’t want to spend much time in the early stages of company development. While it’s still possible to launch an SaaS business with thousands of dollars and a team of 10, many startups succeed with much less. Here are a few things that might help:
- Start small—you don’t need an office, a big team or even customers at first. You can start bare-bones on your own or with just one other person (maybe even just yourself).
- Build a minimum viable product—whether that means building something very basic and iterating over time or releasing something more robust right away depends on what kind of feature set you’re aiming for. Either way, it’s better to release early than never release at all!
- Use free trials—rather than selling membership plans right out of the gate when you’re getting started, give people free trials so they can try before they buy! This will allow users who aren’t sure if they’ll really use your product enough value from it yet; instead they’ll find out once their 30 day trial expires."
No big investment needed:
Starting a SaaS business doesn’t require a big investment. In fact, your initial costs can be as low as $1,000. How?
- Use free tools like Google Apps and Slack to get started with a small team of two or three people.
- Create an MVP without hiring developers by using tools like Unbounce for landing pages and Intercom for customer service.
While the above list may seem daunting, it’s worth noting that there are many simple ways to get started with little or no money at all:
Small team can handle a lot of business:
- A small team can handle a lot of business.
It’s not just the number of people that matters, but also how you organize your teams. A SaaS company has a handful of customers that pay for their service every month. That means you need fewer people to sell, manage and support those customers than larger businesses which have many more clients who may only buy once or twice per year. This is one reason why SaaS companies are so successful: they can have the same impact with less staff than other companies, making them more efficient and easier to manage overall!
- Smaller teams make better decisions faster:
Making good decisions quickly is important because it helps ensure that no time or money is wasted on things which aren’t producing results - like building features nobody wants or spending months developing something nobody cares about using (like an app).
Easier to scale up:
- It’s easier to scale up.
- You can easily scale down.
Whether it’s adding more features to your product as you grow, or scaling down when times are slow, SaaS is ideal for this type of flexibility. In fact, businesses that sell software through the cloud are capable of growing 100% faster than those who don’t! This is because there’s less overhead involved in running a SaaS business than there would be with physical products like retail stores or manufacturing plants (think about how much space and equipment is required for each item).
SaaS businesses are highly profitable. SaaS companies can be profitable even when the number of customers is small, which means that the company doesn’t need millions of users to be successful. This kind of business model allows you to charge a higher price per user and have high margins versus traditional businesses where you have large upfront costs (e.g., manufacturing machines) and low margins because it takes time before you recoup those investments.
The lifetime value (CLTV) for many SaaS businesses can also be very high because as long as you keep paying for an on-demand service, it helps increase your CLTV over time—you don’t have to worry about paying for any other fees in between purchases like subscription services or recurring charges (like cable TV).
Higher customer lifetime value (CLTV):
The CLTV is the average revenue per customer over the lifetime of their relationship with the company.
It’s usually much higher than CAC (customer acquisition cost) because it includes all future revenues, whereas CAC only measures up-front costs. For example, let’s say you have a SaaS business that requires an annual subscription fee of $10/month and you have 100 customers paying that amount each year. Your CLTV would be 1MM/12 = $83K/year ($10 x 100), whereas your CAC would be 0 since no money was spent on acquiring those customers in this scenario
Lesser support needed than e-commerce business or other B2B businesses with products and services for clients.
You’ll be able to set up a self-service website with a knowledge base and FAQs. You can also use tools like Zendesk, HelpScout and GrooveHQ to track customer support requests, automate tasks like sending out automated emails based on user behavior, create custom workflows for different types of issues and more.
Don’t ignore this part of your business though! It’s still important because you want to be able to help users understand how your product works and make it easier for them to use. This can help increase conversions or even help retain customers who might jump ship if they have trouble figuring out how something works in the first place.
Proven success stories of SaaS companies taking over the world unlike other startups or traditional businesses.
The success of SaaS companies is a proven case. In fact, many of the biggest tech companies in the world are now SaaS businesses. These include Salesforce, Zendesk and Hubspot who have been able to turn their businesses into giants and dominate their respective markets simply by providing services to customers through a subscription model.
The reason why these companies have been so successful is because they can build up recurring revenue streams that last long after you’ve made your initial sale which allows you to scale your business while lowering costs tremendously. This means that even if one client cancels their subscription or doesn’t renew it at all, there are still thousands more clients waiting in line ready to pay you every month without any effort on your part!
Great potential for mergers and acquisitions by bigger companies.
Mergers and acquisitions are one of the quickest ways to scale a business. If your company’s valuation is at $100 million, you could be acquired by another SaaS company that is worth $500 million for $400 million cash and stock, which would instantly make you $300 million richer. The downside is that as part of the acquisition, you may have to relocate or take on a new role in the larger organization—but if you play it right, this can also be a great opportunity for personal growth.
Mergers and acquisitions can also bring in funding from outside investors who want access to your customer base (e.g., if they are trying to expand into international markets). The other side of this coin is that acquiring another company may require additional investment capital—but if done correctly (i.e., with careful planning), M&A activities often result in greater profitability down the road because they provide access to resources like new talent or customers previously unavailable within existing infrastructure limits
It’s the cloud, it’s sexy. Why wouldn’t you want to be a part of it?
You should start a SaaS business because it’s the future of computing.
Cloud computing is widely considered to be one of the most disruptive technologies in our time, with experts predicting that it will make up 75% of all data centers by 2020. It’s also an industry that has seen tremendous growth over the past decade and shows no signs of slowing down anytime soon—and with good reason.
Because cloud computing services are offered over the internet, they’re flexible, scalable and easy to use compared to traditional on-premise servers. This means they’re ideal for small businesses that need an IT department on a budget (or no budget at all!).
Start a SaaS Business because it is the future
As we mentioned, the SaaS model is the future. It’s the cloud, and it’s sexy. The software-as-a-service industry has seen incredible growth over the last decade. And while there are multiple reasons why SaaS businesses are so profitable and easy to scale up, we’ll just give you five:
- Because of their recurring business models, SaaS companies tend to have lower customer acquisition costs than traditional businesses.
- It’s easy for users to try out new products without any commitment on their part (i.e., no obligation to pay).
- There are no upfront costs or hardware investments required by customers when using SaaS applications or sites; instead payment is only made after using a service or product for a certain period of time (often monthly). This means that customers don’t need any sort of approval from higher authorities before accessing these services—they can sign up at any time without having first received approval from upper management levels within their organization because there isn’t really anyone else besides themselves who needs approval before being able access these products/services anyway!
When you have a SaaS business, you’re not going to need huge investments, and you also won’t need to spend too much time on customer support. That is why starting a SaaS company has so many benefits over other types of businesses. However, if you are still hesitant about starting one then think of these reasons as they might help sway your decision in favor of starting something new today!