free saas business plan template

How To Create A SaaS Business Plan In 11 Steps: Full Guide

• November 17, 2023
• Fundraising

Software as a service (SaaS) is the fastest-growing market segment of the past 5 years: the overall spend per company on SaaS products was up +50% in 2021 compared to 2018!

Yet, SaaS do require significant upfront investment before they can turn out a profit. Whether you are raising capital or applying for a grant, you will need a solid business plan for your SaaS startup.

Whilst every business is unique, we strongly recommend to follow a clear structure vetted by dozens of high-profile VC firms globally. Having a powerful and clear business plan will maximise your chances of raising capital from potential investors.

In this article we walk you through the 14 sections you must have in your SaaS business plan.

No te: If you are looking for a pitch deck instead, read our guide here . Although business plans and pitch decks are similar, they are also very different in their format. If you aren’t sure what is best for you, we recommend to read our article on the key differences between business plans and pitch decks .

SaaS Business Plan: The Template

If you are creating a business plan for your SaaS startup, we recommend you follow the following structure:

• Executive Summary
• The Problem
• The Solution
• Market Opportunity
• Competitive Landscape
• Business Model
• Intellectual Property
• Marketing Strategy
• Financial Plan

1. Executive Summary

The executive summary is the introduction of your SaaS business plan. This is a section you should spend a lot of time on as it’s the first impression investors will have when looking at your business plan.

The executive summary should fit in 2 pages maximum . Make it to the point, concise, and make sure to answer the following questions:

• What is the problem you want to solve?
• What is your solution?
• Who are the co-founders behind the project?
• Do you have early traction?
• What are you asking for (capital from investors, government grant application, etc.)?

Expert-built financial model templates for tech startups

2. The Problem

This is the “why” of your business. Explain in this section what is the problem you are trying to solve.

The greatest businesses are solving big problems, yet they aren’t necessarily obvious . For instance, if your SaaS startup aims to solve the pain points of HR administrative tasks (human errors, low digitalisation, time-consuming, etc.) make it clear here. Not everyone is knowledgeable about companies’ support functions processes, let alone HR.

Ideally you would list the 2/3 friction points you aim to fix. For instance, digitalisation usually fixes multiple problems at once: it is fast, seamless and accessible (vs. slow, prone to errors and non-readily available / accessible solutions).

3. The Solution

Your startup builds and commercialises a product and/or a service which solves the problem explained earlier.

This section should not explain in detail your product nor how it works. Instead, it should focus on the benefits for your customers .

Ideally, you should compare the pain points explained on section 2 (the Problem) to the benefits your solution brings to your customers. That way,  it is crystal clear to investors your solution really adds value to potential customers .

4. Market Opportunity

Here, you need to clearly identify 2 very important metrics:

• Market size :  how big is your market?
• Market growth:  how fast does your market grow?

If you are operating in a niche market, chances are that you will face some challenges: the information might not be publicly available. In any case, you should be able to make a high-level estimation of your market.  Read our article on market sizing and how to estimate TAM, SAM and SOM for your startup .

When looking for these metrics, you have multiple sources of information: public reports, specialised press, etc. Even public companies publish press releases and annual reports including some of their proprietary market estimates so be sure to look there too.

5. Competitive Landscape

How fragmented is your market.

Are there 3 big players sharing 90% market share or thousands of small players? Here, refer to public market reports and your own understanding of the competitive landscape.

A few questions you could ask yourself, among others:

• Who are your competitors?
• Are they local, regional, national or global?
• Do they have mobile and/or desktop applications?

Where do you position yourself vs. competition?

Is your solution a game changer other competitors don’t have (yet)? Do you have competitors with similar products/services?

Ideally, you would create a small table with, for each type of competitors (e.g. global diversified companies, small pure players, etc.) the main characteristics they share or not. For instance, do they all a global presence? Do they have a on-premise or a SaaS solution? Do they offer both a desktop and mobile app, or just desktop? What is their relative price positioning (expensive vs. accessible)?

6. Business Model

This section is very important. Now that we have clearly identified the problem you are solving and the benefits of your solution, let’s have a closer look at your product.

This is where you clearly explain 2 key things:

How does your product work?

Explain what your product is and how it works. For instance, is it a desktop and/or a mobile SaaS application? Who is it for exactly (is this a FP&A application only for CFOs or a Slack-like collaboration tool for any type of user)?

Pricing model

SaaS businesses have different types of pricing models: per-user, per-usage, flat-tiered, etc. For a full list of the different pricing models, refer to this great article here .

7. Intellectual Property

This section is optional: only include it if you already have a MVP. If so, you have a strong argument for product-driven investors which will give a lot of credit to your tech.

Be careful not to go into too many specifics though: investors aren’t always engineer by training. Do not put things like the programming language you have chosen (e.g. React, Python) or the database provider (PostgreSQL, MongoDB).

Instead, include things such as:

• whether you have a white-labelled solution or a proprietary back-end / database
• how many full time front/back-end engineers you have
• how much you invested already in your tech

8. Marketing Strategy

This section explains how you acquire customers .

Are you selling a SaaS solution to B2B customers? Or is this a B2C product? This will determine whether you have an inbound or outbound acquisition strategy, or both:

• Inbound acquisition : fully digital acquisition. It can be either paid (paid ads e.g. Google Ads) or organic (content, SEO). Essentially, you convert customers from leads who land on your landing page. This strategy is most common for B2C SaaS businesses
• Outbound acquisition : you acquire customers thanks to your sales team who contact potential customers via phone, emailing or in-person sales efforts. This strategy is very common for B2B SaaS businesses

Once you have clearly explained your acquisition strategy and what tools you are using (e.g. Google Ads for paid search, Instagram and/or newsletter for content), ideally you can show, among others:

• Your average Customer Acquisition Cost (only if you have early traction)
• The number of sales people you have today
• How many customers your sales people close per month in average
• Your monthly paid ads budget
• The number of followers you have on social media
• Your newsletter count

The roadmap tells investors where you are going and how is product going to evolve in the future. You can either keep it high-level (e.g. your long-term strategy) or more detailed (e.g. the pipeline of the near-future product features).

Investors do not just invest in your product as it is today. For example, you might only have developed a MVP with limited features for  early-adopters  while your product could be tweaked and serve a much larger customer base in the future.

Note: if you choose to include your product pipeline, keep it very simple. Your SaaS business plan isn’t your product manager’s presentation to engineers.  Instead of features, focus on the additional benefits and customer segments you might target  as such. For instance, if you plan to launch a messaging feature, focus on the fact it will open new growth opportunities (e.g. network effects).

In this section you should focus on the people behind the company. Unlike in the executive summary, the team section of your SaaS business plan should not be limited to the cofounding or management team.

Instead, you should explain the current organisational structure of your company, the different teams, who they report to and their relative size.

For the people, keep it short. Keep biography to a minimum and only to key people (cofounders and management team). As rule of thumb, 5 lines per team member are enough, 10 a maximum.

When it comes to biographies, only include what is relevant: name, position, years of experience and/or previous companies is more than enough.

What about advisors?

Do you have angel investors with significant experience who advise you on strategy? Do you have a PhD who acts as advisor to your SaaS startup (on regulation and market access matters for instance)?

Any advisor should also be included here, with the same level of detail as for the management team.

Demonstrating in your SaaS business plan that not only team members but also experts are advising and/or sitting on your board is a strong selling point.

Note: add a clickable link to the respective Linkedin profiles so investors can refer to a more exhaustive resume for your team members (if relevant)

11. Financial Plan

Along with your product and the team, this section is highly important. Unfortunately, many startups overlook the importance of financial projections in their SaaS business plan.

Think about your audience: investors (venture capital firms or angel investors) are financially literate individuals . As such, they invest in your business to generate returns. Logically, they care a lot about your financials and more especially, the expected financial performance of your business .

Do not expect investors to make up their own plan for your startup if you haven’t. As CEO, founder or entrepreneur alike, you should have a clear idea of where you are going .

As rule of thumb, the more advanced your startup is, the more granularity you should include here. Pre-seed startups might keep it short (1 slide) yet we recommend seed and Series A+ startups to include 2 slides instead.

Common SaaS metrics you should include in your financial plan slide are:

• Monthly Recurring Revenue (MRR)
• ARPU and ARPPU
• LTV and CAC

For a complete list of the 8 most important metrics for SaaS businesses, refer to our article here .

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SaaS Financial Model

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SaaS Business Plan Template

Written by Dave Lavinsky

SaaS Business Plan

You’ve come to the right place to create your SaaS business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their SaaS companies.

Saas Business Plan Example

Below is a saas business plan template to help you create each section of your own business plan.

Executive Summary

Business overview.

All In One is a startup B2B SaaS company located in Los Angeles, California. The company is founded by Melissa Johnson, a business strategist with more than fifteen years of experience helping other businesses develop their operations and processes to optimize customer management, sales and marketing, and project flow. Melissa has garnered a positive reputation of helping companies become more profitable by using SaaS technologies to improve their efficiency. Now, Melissa is ready to venture out with her own SaaS platform. As the name implies, All In One will be a one-stop-shop SaaS platform to help enterprises of all sizes to streamline their saas business operations.

Melissa has enlisted the services of a software developer, Paul Smith, to be the Chief Technology Officer of the company and manage the technical aspects of the SaaS platform. Melissa plans on recruiting a small team of highly qualified professionals to help manage the day to day tasks of running a SaaS company including sales and marketing, customer support, financial reporting, and technology maintenance and optimization.

All In One will provide a comprehensive array of SaaS services beneficial to any business owner who wants to improve their efficiency. All In One will allow each client to ensure that every aspect of their enterprise is being managed seamlessly. All In One will be the ultimate choice for B2B SaaS services while being the most user-friendly platform around.

Product Offering

The following are the solutions that All In One will provide:

• Customer Relationship Management (CRM)
• Project Management (PM)
• Enterprise Resource Planning (ERP)
• Sales Funnel Management
• Financial Management
• Human Resources Management (HRM)
• Communication Solutions
• Automated Marketing Solutions

Customer Focus

All In One will target all small-to-medium (SMEs) and corporate businesses in the United States. They will target businesses in every industry and sector. They will also target companies that already use other SaaS platforms as well as companies brand new to SaaS solutions. No matter the client, All In One will deliver the best interface, customer support, and net profit.

Management Team

All In One will be owned and operated by Melissa Johnson. She has recruited an experienced software developer, Paul Smith, to be her Chief Technology Officer and help manage the SaaS technology.

Melissa Johnson is a graduate of the University of California with a Bachelor’s degree in Strategic Management. She has been helping other businesses develop their operations and processes to optimize customer management, sales and marketing, and project flow for over fifteen years. Melissa has garnered a positive reputation of helping companies become more profitable by using SaaS technologies to improve their efficiency. Melissa’s strategic skills and diligence have allowed her to develop a network of loyal clients.

Paul Smith has been a software developer for over a decade. He has a Software Development degree from New York University and has created a dozen successful software applications for B2B purposes. Melissa relies on Paul’s technical expertise and ability to transform her vision into an easy-to-use platform.

Success Factors

All In One will be able to achieve success by offering the following competitive advantages:

• Helpful, knowledgeable, and efficient sales and customer support team that will be available 24/7 to answer customer questions, help troubleshoot any issues that arise, and record feedback to improve the platform.
• Full suite of solutions to manage all aspects of business operations in one user-friendly, streamlined platform.
• All In One is an intuitive smart SaaS platform that learns the more it’s utilized, so each user can have a personalized experience that works best for them.

Financial Highlights

All In One is seeking $250,000 in debt financing to launch its SaaS business. The funding will be dedicated towards UX design and other software development. Funding will also be dedicated towards office equipment, supplies, and materials. Additional funding will go towards three months of overhead costs to include payroll of the staff, rent of an office space, and outbound marketing costs. The breakout of the funding is below:

• UX design and software development: $100,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $120,000
• Marketing and Customer Acquisition Costs: $10,000
• Working capital: $10,000

The following graph below outlines the pro forma financial projections for All In One.

Company Overview

Who is all in one.

All In One is a newly established B2B SaaS company dedicated to helping businesses of all sizes achieve optimal efficiency in their operations through technology. All In One is based in Los Angeles, California, but will be available to companies across the United States. All In One will be the most reliable, user-friendly, and efficient choice for business owners of small-to-medium enterprises (SMEs) and large corporations in any industry. All In One will provide a comprehensive menu of SaaS solutions for any business owner to utilize. Their full-service approach includes a comprehensive set of sales and marketing, project management, human resources management, and customer relationship management solutions all in one easy-to-use platform.

All In One History

All In One is owned and operated by Melissa Johnson, a business strategist with more than fifteen years of experience helping other businesses develop their operations and processes to optimize customer management, sales and marketing, and project flow. Melissa has garnered a positive reputation of helping companies become more profitable by using SaaS technologies to improve their efficiency. Melissa’s strategic skills and diligence have allowed her to develop a loyal client base.

Since incorporation, All In One has achieved the following milestones:

• Registered All In One, LLC to transact business in the state of California.
• Has a contract in place to lease a small office space.
• Reached out to numerous contacts to include former clients and business owners to begin getting beta users for the new platform.
• Began recruiting a small team of sales and marketing associates, customer support associates, an accountant/bookkeeper, and a technology officer.

All In One Services

Industry analysis.

The global SaaS industry is valued at an estimated $152B (USD). The market is expected to grow to $208B by the year 2023. According to Statista, there are over 15,000 SaaS companies in the U.S. The largest industry players include Adobe, Microsoft, and Salesforce.

SaaS is a major component of cloud computing. Businesses rely on SaaS for everything from video conferencing to sales and marketing automation and customer relationship management. As more companies grow to depend on these services, demand for SaaS offerings will continue to increase. Industry trends include an increased use of artificial intelligence, big data, and integrated cloud services.

The market is highly fragmented with many companies offering similar services. Industry operators can achieve a competitive advantage by developing recognizable and memorable branding and marketing campaigns, providing exceptional customer support, and offering value-add services in addition to the SaaS platform itself.

Customer Analysis

Demographic profile of target market, customer segmentation.

All In One will primarily target the following customer profiles:

• Small-to-medium enterprise (SME) business owners in any industry/sector.
• Corporate/enterprise businesses in any industry/sector.
• Business owners who are looking for a better SaaS platform than what they are currently using.
• Business owners who have never used Saas, but would like to get started to improve their operational performance.

Competitive Analysis

Direct and indirect competitors.

All In One will face competition from other saas businesses with similar business profiles. A description of each competitor company is below.

Get Customers: Sales and Marketing SaaS

Get Customers provides a SaaS platform catering to businesses of any size. The company’s main offering is for automated sales and marketing solutions, but they have recently branched out to offer more comprehensive services including human resource, customer relationship, and financial management tools. Based in Seattle, Washington, Get Customers offers its solutions to businesses and organizations across the United States.

Get Customers’ promise is to deliver a reliable SaaS solution, effective communication, honesty and integrity, and 24/7 availability of the customer support team. Get Customers’ team of experienced SaaS developers and business professionals assures the platform will allow the business operations of its clients to be run smoothly, freeing the business owners from day-to-day operational hassles.

Competitive SaaS Solutions

Competitive SaaS Solutions is a Los Angeles-based B2B SaaS company that provides outstanding business solutions for small business owners. Competitive SaaS Solutions takes the headache out of dealing with multiple SaaS platforms that are not always compatible. They provide comprehensive SaaS services in one place. SaaS solutions included in the platform are CRM, HR, PM, ERP, automated marketing, financial reporting, and video conferencing. The owners of Competitive SaaS Solutions are seasoned business owners and technology professionals so they understand how SaaS is best built, implemented, and managed.

Better Built SaaS

Better Built SaaS is a trusted B2B SaaS company that provides superior service to businesses of all sizes. They are able to provide a one-stop shop for business owners who are interested in optimizing their operational processes through automation. Better Built SaaS is able to serve new businesses and startups from the beginning and established corporations looking to improve their profit margins. They are also able to ease the stress of managers who are overwhelmed by the day to day hassles and complexities that come with running a business.

Their pricing structure is simple and straightforward. Better Built SaaS offers three pricing tiers for their services – the Basic Plan, the Premium Plan, and the Comprehensive Plan. Business owners can choose the plan that best suits their needs and change their plan at any time.

Competitive Advantage

All In One will be able to offer the following advantages over their competition:

• Helpful, knowledgeable, and efficient customer support team that will be available 24/7 to answer customer questions and troubleshoot any issues that arise.
• An intuitive platform that works for any business size in any industry.
• Comprehensive solutions that can be customized to best fit each client’s needs.

Marketing Plan

Brand & value proposition.

All In One will offer the unique value proposition to its clientele:

Promotions Strategy

The promotions strategy for All In One is as follows:

Word of Mouth/Referrals

Melissa Johnson has built up an extensive list of contacts over the years by providing exceptional service and expertise to her clients. Many former clients have communicated to Melissa that they are interested in signing up for the new SaaS and are happy to help spread the word of All In One to their network. Additionally, All In One will use a customer referral program and provide existing clients with discounts for referring new clients.

Website/SEO Marketing

All In One will recruit an in-house marketing director to design and maintain its website. The website will be well organized, informative, and list all their services that All In One is able to provide. The website will also list customer support contact information, pricing plans, and demo videos.

The marketing director will also manage All In One’s website presence with SEO marketing tactics so that any time someone types in the Google or Bing search engine “B2B SaaS company” or “SaaS business solutions”, All In One will be listed at the top of the search results.

Social Media Marketing

All In One will use social media platforms including TikTok, YouTube, Twitter, Instagram, LinkedIn, and Facebook to promote the brand and attract customers. The company’s in-house marketing director will oversee the social media implementation.

Content Marketing

The company will use content marketing on its website and social media to help drive traffic and convert customers. Content will be high quality, informative, and keyword optimized.

The pricing of All In One will be moderate and on par with competitors so customers feel they receive value when purchasing their services.

Operations Plan

The following will be the operations plan for All In One.

Operation Functions:

• Melissa Johnson will be the Owner and CEO of the company. She will oversee all customer support staff and manage client relations. Melissa has spent the past year recruiting the following staff:
• Paul Smith – Chief Technology Officer who will provide all technical support for the platform.
• Bill Brown – Accountant/Bookkeeper who will provide all client accounting, tax payments, and monthly financial reporting.
• Kelly Jones – Marketing Manager who will work on all sales and marketing initiatives for All In One, including customer acquisition.

Milestones:

All In One will have the following milestones complete in the next six months.

8/1/2022 – Finalize contract to lease the office space.

8/15/2022 – Finalize personnel and staff employment contracts.

9/1/2022 – Complete software development of the platform.

9/15/2022 – Begin networking and outbound marketing efforts.

9/22/2022 – Begin moving into the office.

10/1/2022 – All In One opens for business and launches the beta platform.

Financial Plan

Key revenue & costs.

The revenue drivers for All In One are the SaaS subscription fees that will be charged to the clients for use of the SaaS platform and services. All In One will have a tiered subscription model with a basic, standard, and premium subscription options. In addition, the company will have customized service options for an additional fee.

The cost drivers will be the overhead costs required to maintain a SaaS platform and staff the office. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

All In One is seeking $250,000 in debt financing to launch its SaaS business. The funding will be dedicated towards UX design and other software development. Funding will also be dedicated towards office equipment, supplies, and materials. Additional funding will go towards three months of overhead costs to include payroll of the staff, rent of an office space, and marketing costs. The breakout of the funding is below:

• Marketing and customer acquisition costs: $10,000

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Average number of monthly subscriptions: 15
• Average fees per month: $50,000
• Office lease per year: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

SaaS Business Plan FAQs

What is a saas business plan.

A SaaS business plan is a plan to start and/or grow your SaaS business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your SaaS business plan using our SaaS Business Plan Template here .

What is the Main Type of Saas Business?

There are a number of different kinds of SaaS, some examples include: Horizontal SaaS and Vertical SaaS.

How Do You Get Funding for Your SaaS Business Plan?

SaaS are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.  This is true for a business plan for any Saas company, including a B2B Saas business plan.

A well crafted Saas business plan is essential for securing funding from any type of potential investor.

What are the Steps To Start a SaaS Business?

Starting a SaaS business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Write A Saas Business Plan - The first step in starting a business is to create a detailed Saas business plan that outlines all aspects of the venture. The business plan should include market research on the Saas industry and potential target market size, information on the services or products you will offer, marketing strategies, pricing details and a solid financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your Saas business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your Saas business is in compliance with local laws.

3. Register Your SaaS Business - Once you have chosen a legal structure, the next step is to register your Saas business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your SaaS business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where your saas business will be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary SaaS Equipment & Supplies - In order to start your SaaS business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your SaaS business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

The Ultimate Guide to Writing a SaaS Business Plan with Examples and Templates

Explanation: We fact-check all of our content to ensure you have reliable and up-to-date information for your eCommerce business decisions. Learn about our fact-checking steps .

Whether you’re an aspiring entrepreneur or a seasoned veteran, there’s no denying that writing a SaaS business plan is a critical step in launching your SaaS startup . In this article, we’ll give you the lowdown on what goes into writing the ultimate SaaS business plan.

Introduction

Did you know that 70 percent of businesses that follow a strategic business plan manage to survive for five years? 

But here’s the deal — the way you write your SaaS business plan differs a little from the way you might write plans for a more traditional “lifestyle” business. There are unique considerations that can help your business succeed or fail.

It’s necessary to validate your business idea and build a compelling case for investors. If you’re starting a SaaS business, there is an even greater need to create a solid business plan because the resources required to fund growth are often higher relative to other types of online businesses. 

An excellent SaaS business plan lays out essential aspects of your business, from mission and values to marketing strategy and financial projections. It also helps you consider any potential risks and create contingency plans.

If you are considering developing your own SaaS business, this guide discusses what a SaaS business plan should include and how to create an outstanding one. 

We’ll cover areas like your business model examination, marketing, financials, and how to make sure your plan doesn’t include any holes.

What is a SaaS Business Plan?

A SaaS business plan is the roadmap for your software-as-a-service (SaaS) business. With this plan, you can specify steps you need to take to make your business succeed. It basically helps you stay organized and keep track of your progress.

When creating a SaaS business plan, you must consider many factors, including customer segmentation, customer acquisition strategy, pricing structure, marketing, and operational costs. It’s also essential to set short-term and long-term goals to stay on track. 

Moreover, the plan is vital for communicating with potential investors and customers, giving them a clearer insight into the product and its value.

Why Do You Need a SaaS Business Plan?

1. increased clarity.

A SaaS business plan creates clarity around your goals and objectives by articulating them in an understandable format. This plan gives you the foundation for making decisions moving forward, helping you identify potential challenges or opportunities down the road. Whether it’s for yourself, investors or shareholders, having a well-thought-out business plan can be invaluable when it comes to mapping out your trajectory for success.

2. Assign Responsibility

A SaaS business plan focuses on the project and keeps it organized, on track, and ultimately profitable. If your organization lacks a plan, you may find that progress is slow. Projects may get sidetracked or confused, and you may have trouble communicating goals to the team.

With a plan in place, your management team can see who’s responsible for what tasks, when those tasks need to be completed, and how their efforts are contributing to the overall project. It makes it easier to measure performance and set up rewards. 

And at the same time, if someone falls behind or is underperforming, it’s also easier to identify which area needs improvement—all thanks to having a well-defined SaaS business plan.

3. Manage Change

When running a SaaS business, you must always be ready for a pivot. Having a detailed plan helps you prepare for any curve balls that may come your way. A plan is also helpful when expanding or trimming staff or services—it ensures that everyone is on the same page and understands your ultimate goals.

4. Secure Funding

Having a business plan is critical if you’re trying to secure funding for your SaaS project. Investors want to know that you have accounted for all aspects of your project. 

Most are particularly interested in seeing your business model and product, competitive edge, customer acquisition strategy and financial projections. These insights help them to determine the potential profitability of your venture. 

Your business plan typically shows investors how much money they will need to invest in getting the project off the ground.

Pro tip! Discover the techniques and best practices of price anchoring , a pricing strategy you can use in your business plan.

Crafting a Winning SaaS Business Plan Outline

We’ve mentioned earlier that a SaaS business plan is the roadmap you need to create a successful software as a service company. With the right plan, you can identify your target market, outline your strategy, and secure the resources you need to get started. 

Here are the ‘must-haves’ in your outline to get started on the right foot.

1. Executive Summary

The executive summary is a “30-second pitch” that encapsulates the key elements and essential information about your business in a few short paragraphs. It’s the first chapter of your SaaS business plan, setting the tone for the rest of your document. 

The executive summary should be clear and concise while providing enough detail to paint a vivid picture of your business concept and goals.

Potential investors or partners should be able to quickly understand your business goals and concept, as well as your competitive advantages and mission. Hence it’s best to keep your text concise.

You should;

• Include all the essential points and briefly explain how you plan to reach your objectives. 
• Communicate why your company will succeed in this space relative to competitors in the market at large. 
• Finally, don’t forget about visual aids—add charts and other visuals that can help illustrate your points throughout your executive summary to strengthen its impact and clearly present information.

                                                                        Image source 

You can see that this very brief executive summary includes an overview of the product, market, and mission. 

Describing your product and market are particularly essential because they provide a framework for writing about your business model in a way that is focused on your target audience and clear to potential investors.

2. Identifying the Problem

The problem statement clarifies why you create your product or service and why customers need it. It should be succinct and designed to establish your company’s unique purpose and value proposition in the marketplace. 

To write a comprehensive problem statement, you need to research and analyze industry trends to identify the unique problems that your product will solve.

Tools such as the Google Trends search engine or the Pew Research Center are excellent resources for conducting industry research. You can use Google Trends to view the relative popularity of search terms over time, while the Pew Research Center provides access to industry-specific survey data. 

Tools like these can help you identify gaps in the current marketplace to help you create a compelling problem statement.

After your research, use straightforward language to articulate the primary issue your product or service addresses. Remember to keep it Simple. Refrain from overloading readers with too much information; keep it straightforward and easy to understand.

3. Asserting Your Solution

Once you’ve detailed the problem, you need to create a case study for why your solution is the ideal one. Solutions in a SaaS business plan typically refer to the product or service your company provides. 

In this section of the business plan, you must clearly articulate how your solution will be better, faster, or cheaper than the competition. 

As you explain the advantages of your solution, provide concrete data, such as customer testimonials, to back up your claims. It is also important to emphasize the value proposition and the differentiating characteristics that set your solution apart from the competition.

Ultimately, convincing potential customers that your product is better than any alternative will be a key part of gaining their trust. The more information you provide in this section, the more likely potential customers are to understand the value of your product and choose your solution over the competition.

4. Market Opportunity

Market opportunity refers to the potential size and growth of the available market for a business’s services or products. It is an important consideration in the business plan as an essential part of determining the potential success of the business concept. To assess and identify market opportunities, you must first understand your target market.

Check out this graph to find out the approximate global SaaS market growth:

Understanding your target market involves researching the product or service, the target customer demographic, and the market situation for similar products or services. Websites like US Census Bureau , Answer The Public , and Statista can help you uncover actionable insights to identify opportunities, such as untapped markets or customer subsegments that may be more receptive to your SaaS product. 

It is also essential to consider any potential trends or changes in the market, such as new laws and regulations, technology, or changes in customer behavior, that could impact the market. Trend research can help inform pricing and marketing strategy for better long-term success.

You can see that this outlines the potential trend and growth of the cybersecurity market following an analysis by IBISWorld. 

5. Competitive Analysis

The next section of your SaaS business plan should be a competitive analysis. In this part, you look at—and compare yourself to—your competition. This survey helps you understand the current market, identify areas of advantage and disadvantage, and develop strategies to help you stand out from the competition.

Writing a good competitor analysis begins with identifying who your competitors are. Tools like Similarweb can help you find direct and indirect competitors who offer similar services or products differently. For each competitor, you listed, describe the services they provide and their strengths and weaknesses.

Next, spell out the differences between your offer and your competitor’s. Analyze their pricing structures too. Are customers willing to pay more for specific product features? How often do copycats come along? Is there a demand for cheaper alternatives? Understanding these dynamics can help you create better pricing strategies for your SaaS business plan. Popular SaaS pricing strategies include penetration pricing , trial pricing , and psychological pricing .

You can also conduct an SEO competitor analysis   to get a better understanding of your competitors’ strategies. This, in turn, will help you craft a more strategic marketing plan to outperform your competitors’.

6. Business Model Examination

Business model examination in a SaaS business plan involves analyzing and defining how the company plans to generate revenue and create value for its customers. This section includes an in-depth study of key elements of the company’s revenue model, such as pricing strategy, target market, cost structure, sales and marketing channels, and customer acquisition strategy.

The business model examination allows you to ensure that your assumptions are solid and strengthen weak areas. It also validates ideas and visualizes how they stand up compared to competitors in the market. Here, you’ll typically answer important questions such as:

• What value does the SaaS offering provide to its customers?
• How will the company monetize its SaaS offering?
• Who are the target customers, and what are their needs?
• What are the key costs associated with delivering the SaaS offering, and how will these costs be managed?
• How will the company acquire and retain customers, and what is the customer acquisition cost?

7. Marketing Plan and Strategy

This section details a comprehensive strategy for attracting and retaining customers by communicating the value of the company’s offering. It outlines the steps the company will take to build awareness and demand for its product and how it will retain its existing customer base.

A typical marketing plan in a SaaS business plan includes the following components:

• Target market analysis : Identify the target customer segments, their needs, and how the SaaS offering addresses those needs.
• Competitive analysis : Identify the competition and assess the company’s competitive advantage.
• Value proposition: Define the unique value the SaaS offering provides customers and how it differentiates from the competition.
• Positioning strategy : Determine how the SaaS offering will be positioned in the market and how the company will communicate its value proposition to its target customers.
• Marketing mix : Define the marketing mix, including product, price, place, and promotion, and how they will be used to achieve the marketing objectives.
• Marketing budget : Establish the marketing budget, including the cost of marketing campaigns and tactics and how the budget will be allocated to different marketing channels.
• Marketing KPIs : Define key performance indicators (KPIs) to measure the marketing plan’s effectiveness and track progress.

To learn more about measuring your marketing KPIs, read our comprehensive guide on essential SaaS metrics to track and improve growth.

8. Timeline and Map

A timeline is a visual representation of the key milestones and events the company intends to achieve in a specified period. 

The timeline should outline the significant events such as;

• product development
• marketing campaigns
• key hires, as well as the expected completion dates for each event. 

The timeline provides a roadmap for the company, ensuring that the business stays on track and meets its goals.

To create a comprehensive timeline in your business plan, determine what you want to achieve with your SaaS business. Next, identify the key events that need to happen for your business to achieve its goals. These events can include product development, launch, marketing campaigns, and key hires.

After identifying key events, assign a realistic time frame for each milestone, considering any dependencies or constraints. This step will help you to determine the expected completion dates for each event. 

Finally, choose a format for your timeline that is easy to understand and visually appealing. A Gantt chart is a popular choice for creating a timeline, as it provides a clear and visual representation of the timing of each event. You can use a tool like TeamGantt to create Gantt charts.

9. Your Team

Your management team, composed of founders, executives, and everyone in between, are responsible for turning your brilliant idea into a reality. That’s why exploring how your team and plan mesh together is essential to create something truly unique.

In this section, you’ll want to talk about the experience and qualifications that your team brings to the table — including relevant work history and industry knowledge. You’ll also want to talk about how roles are divided among team members and how those roles might evolve.

If the company has a board of directors and advisors, this section should describe their background and experience and how they will contribute to the business’s success. The team section should also outline the company’s plans for future hiring and how the new hires will fit into the company’s overall strategy.

10. Financial Plan

A financial plan is one of the essential parts of your SaaS business plan. It lays out your current and future financial needs so that investors know where you are now and understand where you intend to be in the near and distant future. Here are some key elements to include when writing the financial plan section.

• Projected income statement: Provide a detailed projection of the company’s revenue and expenses over a period, usually 3-5 years.
• Projected cash flow statement: Show the company’s expected cash inflows and outflows over the same period as the projected income statement.
• Projected balance sheet: This section should show the company’s projected assets, liabilities, and equity at the end of each year. 
• Break-even analysis: Show the point at which the company’s revenue will equal its expenses and how long it will take to reach that point.
• Assumptions and risks: Outline the assumptions and risks underlying the financial projections, such as changes in the economy, competition, and customer behavior.
• Capitalization table: This section should show how the company will be funded, including equity investments, debt financing, and other funding sources.

In today’s world, the process of creating a business plan has become much easier. You can find freelancers online who can help handle time intensive parts of the process like research and formatting, making it possible for you to focus on what matters most — your business strategy. 

You can also find templates online that allow you to plug in your own information and print out pages with everything you need.

For example, SCORE provides fillable worksheets to help you cover these key pages in your business plan. The US Small Business Administration (SBA) also offers sample templates for both modern lean startup and traditional business plans. Additionally, you can find free templates on PandaDoc . 

Pro tip! Trial pricing method is another pricing approach you can use when writing a winning SaaS business plan.

Final Thoughts

Now you see, you don’t have to be an excellent wordsmith or planner to craft a winning SaaS business plan. The steps in this guide will help you to organize your thoughts and create a comprehensive plan for your business.

Adaline Lefe Mary John

A great researcher and creator, Adaline is responsible for planning and managing content for all our websites. She has over 10 years of experience in creating and managing content.

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Methodology

• Who? We are SaaS experts: Our specialists constantly seek the most relevant information to help support your SaaS business.
• Why? We are passionate about users accessing fair SaaS pricing: We offer up-to-date pricing data, reviews, new tools, blogs and research to help you make informed SaaS pricing decisions.
• How? With accurate information: Our website manager tests each software to add a Genius Score using our rating methodology to each product. Our editorial team fact-check every piece of content we publish, and we use first-hand testing, value metrics and leading market data.

SaaS Business Plan Template

Written by Dave Lavinsky

SaaS Business Plan

Over the past 20 years, we’ve helped over 10,000 entrepreneurs create successful SaaS (Software as a Service) business plans. This step-by-step guide will show you how to start and grow your SaaS business. You’ll learn how to make a plan that outlines your business idea, target customers, customer acquisition strategy, revenue model, and expenses. Let’s get started on building your SaaS company today!

Download our Ultimate SaaS Business Plan Template here >

What is a SaaS Business Plan?

A traditional business plan provides a snapshot of your SaaS business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your customer acquisition strategy for obtaining new clients. It also includes market research to support your business concept.

Why You Need a Business Plan for a SaaS Company

Having a comprehensive business plan is a critical step for any SaaS startup or company looking to scale. It acts as a roadmap, guiding the development and growth phases by setting clear, actionable objectives. A well-structured business plan not only helps in aligning the organizational activities towards achieving business goals but also plays a pivotal role in securing funding. Investors and lenders often require a detailed business plan to understand the potential of your SaaS business before committing their resources. Additionally, a business plan enables you to anticipate challenges and plan effective solutions in advance, thereby reducing risks and increasing the likelihood of success.

Here are several key reasons and benefits for creating a comprehensive business plan for a SaaS startup or an existing company:

• Helps Secure Funding : A solid business plan is essential for attracting potential investors and securing loans.
• Guides Decision Making : It serves as a blueprint for making informed decisions and navigating your business towards its goals.
• Facilitates Growth : Helps in identifying growth opportunities and outlining strategies to capitalize on them.
• Reduces Risks : By anticipating potential challenges, a business plan allows for the development of contingencies to mitigate risks.
• Enhances Understanding of Market : Through research, it provides insights into the competitive landscape and customer needs.
• Improves Communication : Acts as an effective tool to communicate the vision and strategy of your SaaS business to team members and stakeholders.

Finish Your Business Plan Today!

How to write a business plan for a saas company.

Your SaaS business plan should include the following 10 key elements:

Executive Summary

• Company Overview

Industry Analysis

Customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

Your executive summary provides an introduction to your SaaS business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of SaaS business you are operating and the status; for example, are you a SaaS startup, or do you have an existing business that you would like to grow?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the SaaS industry. Discuss the type of SaaS you are offering. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing strategy. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of SaaS you are offering.

For example, you might offer the following options:

• Horizontal SaaS – This SaaS business model allows big SaaS businesses to serve a varied customer base from a multitude of industries. Services can be expanded to incorporate a variety of software categories.
• Vertical SaaS – This business model includes solutions that are created for a specific customer type of industry. This software focuses solely on that industry’s needs.

In addition to explaining the type of SaaS you provide, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What is your mission statement?
• What milestones have you achieved to date? Milestones could include usability goals you’ve reached, number of new subscriptions, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

The Software as a Service (SaaS) industry in the United States is a significant and rapidly growing sector. As of 2023, the market value of the SaaS industry in the U.S. is approximately $108.4 billion . This industry is expected to continue its growth trajectory, with projections indicating that it could reach a market value of $225 billion by 2025, solidifying the U.S. as the world’s largest SaaS market.

In your industry analysis, you need to provide an overview of the SaaS industry. While this may seem unnecessary, it serves multiple purposes.

First, researching the SaaS industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your business strategy particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your SaaS business plan:

• How big is the SaaS industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your SaaS service? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

The customer analysis section must detail the customers you serve and/or expect to serve. This includes identifying your target market and their characteristics such as age, income, location, etc.

By using customer segmentation techniques, you can further refine your target market and tailor your marketing efforts to specific groups of customers. Examples of segmentation in the SaaS industry may include the following customer segments:

• Small and medium-sized businesses
• Enterprises
• Startups/entrepreneurs
• Non-profit organizations

It’s essential to have a deep understanding of the needs, pain points, and preferences of your target audience. This knowledge will help you develop a product that meets their specific requirements and effectively market your SaaS solution.

In addition to demographics, you should also consider the psychographics of your target market, such as their behavior, values, and lifestyle. This information can give you insights into how to position your product and messaging to resonate with potential customers.

Conducting customer surveys and market research can be helpful in gathering this data. You should also analyze your competition’s customer base to identify any gaps or opportunities within the market.

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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other SaaS services that offer similar features and target the same market segments as your product. Understanding these competitors involves analyzing their product offerings, market position, strengths, and weaknesses. This analysis will help you identify opportunities for differentiation, allowing your SaaS solution to stand out in a crowded market.

Indirect competitors are other options customers may use that aren’t direct competitors. This includes customized software solutions and open-source software. You need to mention such competition to show you understand that not everyone who needs software will subscribe with a SaaS company.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• How many customers do they serve?
• What types of software do they offer?
• What is their pricing strategy (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of this section is to document your competitive advantages. For example:

• Will you provide superior products?
• Will you provide services that your competitors don’t offer?
• Will you make it easier or faster for customers to use your products?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Traditionally, a detailed marketing plan includes the four P’s: Product, Price, Place, and Promotion.

This section should include the following:

Product : in the product section, you should reiterate the type of SaaS business that you documented in your Company Analysis. Then, detail the specific solutions you will be offering. For example, in addition to Customer Relationship Management solutions, will you also offer Email Marketing solutions?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your SaaS company. Document your location and mention how the location will impact your success. For example, is your SaaS production or support office located in the US or in India, etc. Discuss how your location might impact customer attraction or retention.

Promotions : the final part of your SaaS marketing plan is the promotions section. Here you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider in your marketing mix:

• Search Engine Optimization (SEO)
• Advertising in trade magazines
• Reaching out to associations that correspond with the industry or industries you are targeting
• Publishing articles or writing guest posts on relevant blogs
• Social media marketing
• Radio and/or TV advertising

Understanding and Managing Customer Acquisition Cost (CAC) In the SaaS industry, the Customer Acquisition Cost (CAC) directly impacts profitability and long-term success of your business. Customer acquisition costs are the total cost of the sales and marketing plan that is needed to acquire customers. To keep this cost low, companies should focus on:

• Efficient marketing strategies like inbound marketing, which attracts customers through content creation, social media, and SEO.
• Leveraging customer referrals by incentivizing existing users can significantly reduce acquisition costs, as satisfied customers are likely to spread the word.
• Implementing a robust customer relationship management system to nurture leads and personalize the customer journey can also increase conversion rates, thereby lowering the overall CAC.

By focusing on these strategies, SaaS businesses can optimize their spending and improve their return on investment in customer acquisition efforts.

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your SaaS business, such as attracting customers, running the customer helpdesk, processing paperwork, etc.

Long-term goals are the milestones you hope to achieve using key metrics. These could include the dates when you expect your 100th subscription, or when you hope to reach $X in sales revenue. It could also be when you expect to hire your Xth programmer, or when you expect to launch a new solution.  

To demonstrate your SaaS business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

• Upper Management – In this section, introduce your CEO and other top-level executives. Detail their experience in the industry, leadership skills, and any relevant achievements.
• Development Team – Describe the members of your development team and highlight their technical expertise and any previous successes related to SaaS or software development.
• Sales Team – Introduce your sales team members, emphasizing their experience with SaaS products and their track record of generating sales.
• Support Team – Detail the members of your customer support team, highlighting their knowledge of your SaaS solution and their ability to provide excellent customer service.

By showcasing a strong and well-rounded management team, you not only demonstrate the potential for success but also instill confidence in potential investors or partners.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in software development or deployment, and/or successfully running small businesses.  

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you have 10 enterprise subscribers or 500 individual subscribers? And will subscriptions grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $200,000 on building out your SaaS solution, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $200,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a $100,000 customization contract that would cost you $75,000 to fulfill. Well, in most cases, you would have to pay that $75,000 now for employee salaries, hosting, utilities, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an SaaS business:

• Location build-out including design fees, construction, etc.
• Cost of equipment like computers, design and project management software, etc.
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office design blueprint or location lease.  

Free Business Plan Template for a SaaS Business

You can download our free business plan template PDF . Our sample SaaS business plan is another free resource to help you get started on your own SaaS startup business plan.  

SaaS Business Plan Summary

Putting together your own business plan will improve your company’s chances of success. The business planning process will help you better understand your target audience, your competition, and your business strategy. You will also develop the marketing strategies needed to better attract and serve your target market, an operations plan to focus your efforts, and financial projections that give you business goals to strive for and keep your company focused.

Growthink’s Ultimate SaaS Business Plan Template allows you to quickly and easily complete your Saas Business Plan.

Sources of Funding for SaaS Businesses

With regards to funding, the main sources of funding for a SaaS business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a SaaS business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

Additional Resources For SaaS Business Owners

• SaaS Marketing Strategies
• SaaS Pricing Strategies To Consider
• SaaS Accounting: Finances For A Subscription Model Company

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.

Other Helpful Business Plan Articles & Templates

SaaS Business Plan Template [Updated 2024]

SaaS Business Plan Template

If you want to start a SaaS business or expand your current SaaS business, you need a business plan. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of SaaS business plans.

The following SaaS business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want.

You can download our SaaS Business Plan Template (including a full, customizable financial model) to your computer here.

SaaS Business Plan Example

I. executive summary, business overview.

[Company Name] is a SaaS business that provides hosting software services throughout [location]. [Company Name] offers customer management, accounting, and project management software at an affordable subscription fee. Moreover, it’ll be responsible for updating and monitoring the provided software. The Company will operate in the heart of the city, conveniently located in the center of the business district.

Products and Services

[Company Name] will provide management, accounting, and project management software. The Company’s custom software is available across various industries including construction, financial services, manufacturing, retail and restaurants.

Customer Focus

[Company Name] will primarily serve small to medium-sized businesses, from new ventures to well-established businesses and individual clients. The clients are further categorized into the following categories:

• Financial service providers
• Construction companies
• Manufacturing businesses
• Restaurants
• Retail Establishments
• Other businesses that may need SaaS technology

Management Team

[Founder Name] has a bachelor’s degree in Technology. He is a certified SOC 2 – Trust (SOC 2 is designed specifically for SaaS operations) and has over [x] years’ experience working as a senior software engineer prior to starting [Company Name].

[Company Name] will also employ an experienced assistant to work as a business analyst and help with various administrative duties around the office.

Success Factors

[Company Name] is qualified to succeed due to the following reasons:

• The Company has a competent, technically sound team with analytical and critical thinking skills that can help them find creative solutions for clients when they request customized software apps.
• The US has a robust business environment with a large number of businesses going the way of technology, and software as a service (SaaS) is indispensable in the value chain of the infotech industry.

Financial Highlights

[Company Name] is seeking a total funding of $200,000 of debt capital to open its office. Specifically, these funds will be used as follows:

• Office design/build: $40,000
• Software development: $90,000
• Working capital: $70,000 to pay for marketing, salaries, equipment and lease costs until [Company Name] reaches break-even

II. Company Overview

Who is [company name], [company name]’s history.

In the past few years, a number of IT businesses have opened in [location], and many startups have flourished. SaaS solutions are among the fastest-growing segments in the IT industry. In [year], [Founder’s Name] decided to meet this market need by investing in business providing SaaS solutions to various types of companies and startups.

Since incorporation, the company has achieved the following milestones:

• Developed the company’s name, logo, and placeholder website located at [website]
• Determined the list of services to be offered
• Determined equipment and development requirements

[Company Name]’s Products/Services

The following are the services that [Company Name] will provide:

• Customer Management Software
• Accounting Software
• Project Management Software
• Software Training: Training sessions on how to use the software solutions and integrate them into their businesses

III. Industry Analysis

The SaaS industry is booming. Over the past five years, the SaaS industry has been one of the fastest growing industries in the U.S. In fact, end-user spending on public cloud services will reach $482 billion over the next five years.

Among cloud options, the outlook for SaaS is the brightest. The overall growth of the SaaS industry will remain consistent through these years as more companies adopt SaaS solutions for a variety of business functions, extending far beyond the initial SaaS territories of core engineering and sales applications.

The demand for subscription-based pricing models, however, is spurring legacy companies to rapidly migrate their software solutions to a SaaS consumption model.

IV. Customer Analysis

Customer segmentation.

[Company Name] will primarily serve small to medium-sized businesses, from new ventures to well-established businesses and individual clients. These businesses typically gross from $8 million to $80 million in annual revenues and can invest up to $100,000 to $150,000 in their IT infrastructure. Clients are segmented as follows:

V. Competitive Analysis

Direct & indirect competitors.

Cloud Partners Cloud Partners was founded in 1999. It has been a reliable SaaS company in [location] for more than fifteen years. The company is known for its wide range of services that serves many people. With its large number of experts focused on delivering customer satisfaction, the organization maintains its high standard of services. Cloud Partners provides business software on a subscription basis. It develops enterprise cloud computing solutions with a focus on customer relationship management.

Software Solutions Software Solutions is a cloud computing and hosting platform. The company offers cloud infrastructure services, such as compute, storage and content delivery, database, and networking services, platform services that include analytics, enterprise applications, mobile services, and internet of things, and developer tools, management tools, security, and identity services, and application services. It has also introduced a pay-as-you-go cloud computing model that scales to provide users with computing, storage, etc.

SaaS Partners Inc. SaaS Partners Inc. provides integrated cloud applications and platform services. Its products and services include applications and infrastructure offerings delivered through various IT deployment models, including on-premise deployments, cloud-based deployments, and hybrid deployments. The company serves automotive, financial services, healthcare, hospitality, retail, utilities, construction, etc. It provides solutions for enterprise resource planning, banking, human capital management, etc.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Management: [Founder’s Name] has been extremely successful working in the SaaS industry and will be able to use his previous experience to provide the best service experience. His unique qualifications will serve customers in a much more sophisticated manner than [Company Name’s] competitors.
• Relationships: [Founder’s Name] knows many of the local leaders, business managers, and other influencers within [location]. With his [x] years of experience and good relationships with business leaders in the area, he will be able to develop an initial client base.
• Innovative: The Company will add new data sources to expand on new valuable insights, launch new advanced features like benchmarking, predictive and prescriptive analytics, and self-guided data discovery. Adding embedded analytics creates a new way to innovate continually.
• Client-oriented service: [Company Name] will have full-time customer service and sales managers to keep in contact with clients and answer their everyday questions.

VI. Marketing Plan

The [company name] brand.

[Company name] seeks to position itself as a respectable, upper-middle-market competitor in the SaaS industry. Clients can expect to receive the best services at competitive prices. The [Company Name] brand will focus on the Company’s unique value proposition:

• Client-focused SaaS services that are customized for every client
• Service built on long-term relationships
• Thorough knowledge of the clients and their varying needs

Promotions Strategy

The Company’s promotions strategy to reach the audience includes:

Advertisement Advertisements in print are an excellent way for businesses to connect with their audience. The Company will advertise its company offerings in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.

Social Media Marketing Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of various forms and technologies of SaaS industry and post customer reviews that will increase audience awareness and loyalty.

Direct Mail [Company Name] will blanket businesses with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts, and/or provide other enticements for people to use SaaS services.

Pricing Strategy

[Company Name]’s pricing will be moderate, so customers feel they receive great value when availing of Software services. The customer can expect to receive quality software services at a more affordable price than what they pay at an ultra-premium SaaS company.

VII. Operations Plan

Functional roles.

[Company Name] will carry out its operations at its headquarters in [Location]. The business will require the following job functions:

Administrative and Service Functions

• General & administrative functions including marketing, bookkeeping, etc.
• Software development
• Software and customer support

VIII. Management Team

Management team members.

[Founder Name] has a Bachelor of Technology. He is a certified SOC 2 – Trust (SOC 2 is designed specifically for SaaS operations) and has over [x] years’ experience working in the SaaS industry as a senior software engineer before starting [Company Name]. [Company Name] will also employ an experienced assistant to work as a business analyst and help with various administrative duties around the office.

Hiring Plan

[Founder’s Name] will serve as the CEO. He will hire the following personnel to maintain an effective and profitable SaaS business:

• Programmers and Software Developers [Number]
• Account Executive
• Business Development
• Customer Care Executive

IX. Financial Plan

Revenue and cost drivers.

[Company Name]’s revenues will come primarily from software development. The staff will earn competitive salaries allowing [Company Name] to hire experienced workers. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market. Moreover, rent for the prime location is also one of the notable cost drivers for the [Company Name].

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $200,000 of debt capital to open its office. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.

Specifically, these funds will be used as follows:

Key Assumptions

  5 Year Annual Income Statement

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How to Start a SaaS Company (2024 Guide)

Free SaaS Business Plan Template

20 Min Read

• Startup costs: $50,000-$150,000
• Industry trend: Growing
• Difficulty: Moderately difficult
• Profitability: 68-75%
• Time to build: 6–18 months
• Commitment: Full-time

From an era where it took hours at length to install software to an era where it takes a few minutes to avail of software services – the technology generation has come a long way.

As of 2023, the SaaS space is worth 195 billion dollars and it is expected to grow tremendously over the next few years. There is no better time than today to start your own SaaS business.

Whether you are a software developer with a solid technical foundation or a smart-witted entrepreneur wanting to capture their share in this thriving market, SaaS is perfect for you.

However, starting a SaaS business is not an easy task. It’s complicated and requires a series of trials, testing, and reiterations to get it right.

Well, we have your back. This step-by-step guide answers all your questions regarding how to start a SaaS company in great detail.

So simply, let’s dive right in.

What is a software as a service (SaaS) company?

SaaS companies are typically software-based companies offering their services through web-based applications or Internet browsers. Most SaaS companies charge a monthly or yearly subscription from their customers while there are other ways to generate revenue as well.

Unlike traditional software companies that have a slightly restrictive structure, SaaS business models offer a plentitude of opportunities with their flexible structure. These softwares are hosted over individual cloud servers making it easy to scale and deploy changes.

Wondering how much money will it cost you to set up a SaaS business? Well, read along.

How much money do you need to start a SaaS business?

The average cost to start a SaaS (software as a service) business in the US is anywhere between $50,500- $150,500 . Depending on the complexity of your SaaS business model, the costs can extend up to $500,000 .

These costs are highly influenced by factors such as development, legal, branding, and marketing costs.

Now before you start looking out for funds, let’s have a look at detailed steps that will help you start a SaaS company systematically.

Step-by-Step Guide to Start a SaaS Company

Table of Contents

• Develop a Solution for a Customer Problem
• Write a Lean Business Plan
• Validate Your SaaS Idea
• Select Your Revenue Generation Model
• Brainstorm a Name for Your SaaS Product
• Register Your Business
• Build Your Product
• Consider Your Funding Options
• Establish Your SaaS Brand
• Develop a Marketing Strategy
• Measuring Success with Metrics

1. Develop a Solution for a Customer Problem

“You don’t need a brilliant idea to start a business . You just need a customer with a problem and a solution to offer.”

To build a successful SaaS business, begin by identifying the problems around you. Pay attention to the personal and professional communication in your everyday life. Look at your own struggles with different products and services and see if there is an untapped market opportunity.

Another brilliant idea is to explore the ideas on Reddit and Quora channels to skim different sorts of problems. The overall idea is to find a problem worthy enough to get a SaaS solution built around it.

Now, while exploring potential solutions for the problem, you have one of these 3 ways to go around:

• Identify the gap in existing solutions and find a way to fix it.
• Talk with potential customers and identify their pain points.
• Leverage your understanding of the industry to devise a solution.

Don’t try to solve multiple problems all at once. Stick to a specific niche and develop a market around it.

2. Write a Lean Business Plan

Start by quickly translating your idea onto a paper by writing a lean business plan. Unlike traditional detailed plans, let’s keep it short for now.

Lean planning is an effective and easier way to get around when your SaaS idea is yet to be validated. This one-page pitch includes a quick overview of strategy, tactics, business model as well your SaaS business proposition.

Create a checklist and ensure that you answer the following questions in your SaaS business plan .

• What problems will you solve with your SaaS product?
• What are the USPs of your SaaS company?
• What will be the cost of building and deploying a minimum viable product?
• Who is your target market or what different market segments will you target?
• Who are your competitors and what is your competitive edge?
• Who will be there on your SaaS team?
• What is the value proposition of your saas business and what are the milestones you plan to achieve?
• What will be your revenue model?

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3. Validate Your SaaS Idea

After identifying the problem and devising a solution for it, it is now time to validate your SaaS idea. Take that lean plan and check if the assumptions you made are viable or not.

This step is important to understand if your idea has enough potential to make you money. Be realistic instead of diving right into the first idea that you consider to be best and pragmatic.

Here’s how you will validate your SaaS product idea:

Get to know your target customer

Getting to know your potential customer is perhaps the most important part of starting a SaaS company.

Gather a ton of primary data by talking to your potential customers directly. An easier way would be to design surveys and interviews in your target market. Run a search ad and launch a Kickstarter to collect realistic data for your SaaS company.

This step will help you understand whether or not the problem identified by you resonates with your potential customers and if your proposed solution is perfect for them. Moreover, this step will help evaluate the range within which you can price your SaaS products.

Conduct a competitive analysis

“To compete effectively, you must know your competition better than they know themselves.”

Competition is nothing to be afraid of. It’s in fact an indication that the problem you are attempting to solve is actually a realistic problem that demands a solution.

Conduct market research and identify the SaaS providers that will pose your SaaS business as a competition. Evaluate their SaaS products and identify where they fall short in fulfilling the customers’ wants.

Conduct a SWOT analysis and identify these SaaS companies’ strengths, weaknesses, opportunities, and threats. Determine your competitive edge over these businesses and devise your software accordingly.

Create a minimum viable product

Creating an MVP is the easiest and most practical way of validating business ideas . It is the basic and simplest version of your product, focusing on one value proposition.

One huge mistake made by SaaS businesses is delaying the launch till they get their extensive product ready.  Well, let’s break the bubble- your perfect SaaS product will never be ready.

Launching an MVP in the market will allow you to gather real-user feedback and accordingly make iterations to the product features and design. This will help you create a sustainable product that can beat other SaaS products in the market.

Here are a few things to keep in mind while launching your MVP:

• Keep your MVP extremely simple. Include bare minimum features that are extremely crucial for your SaaS application.
• Gather the feedback right from the beginning. Talk with your potential customers to understand what they like and dislike and what they want from your product.
• Don’t ignore the feedback if it’s not to your liking. Take it constructively and be prepared to change the idea if it doesn’t suit your audience.

If you don’t have the resources to create an MVP of your SaaS application, you can get the work done with wireframes, mockups, explainer videos, landing pages, and even paper sketches.

Leverage the data collected using MVP and use it resourcefully to build a product that people will actually pay for.

4. Select Your Revenue Generation Model

In this step, you will determine a way to make money by selling your SaaS software services. In simple terms, a pricing model to charge for your SaaS products.

SaaS businesses typically use one of these revenue generation models depending on their type of offerings and the target market.

Subscription-based pricing model

In the SaaS industry, SaaS subscriptions are the commonly used method of generating revenue. SaaS companies charge monthly or annual fee on their subscriptions and sometimes even quarterly. You can also offer a free trial before taking the commitment from users.

A subscription-based pricing model helps you retain a customer base for a longer time, given that you continue to provide effective solutions to their problem.

Tiered pricing

Tiered pricing is suitable for SaaS companies that can easily segment their users based on available features. In this method, you create different pricing plans ranging from one with the least features and support to the one with maximum features and support.

Customers get to select what level of features and support they require by choosing specific plans.

User-based pricing

Another method used by SaaS companies is to charge their services depending on number of users. For instance, $10 per user/ month.

This method is suited for SaaS companies that are targeting businesses of different sizes, i.e. small, medium, and large scale.

Flat pricing model

In this pricing model, SaaS businesses charge a flat fee in the beginning and offer lifetime access to the services. However, keep in mind, that this model will not give you recurring revenue.

Free pricing

Some SaaS companies offer their services for absolutely free and generate revenue by running ads on their platform. While your prospective customers would love free services, they may not like the invasive nature of ads and interruptions.

Depending on your SaaS business model, you can create a hybrid pricing strategy while keeping your target audience in mind.

It’s important to price your services within a range that is feasible for your potential customers.

5. Brainstorm a Name for Your SaaS Product

In the business world, a great name is a great asset. The success of your SaaS company might not entirely rely on a name, but it definitely plays a crucial role in building your brand image.

Choosing a name may seem like an easy task. But it isn’t. Here are a few things to keep in mind while brainstorming and finalizing your SaaS business name:

• Pick a simple and easy-to-spell name. Don’t go around messing with the spelling just to make it creative.
• Pick something that can be easily remembered and recalled.
• Choose a name that resonates with your SaaS product idea.
• The name should of course be unique. Check the state registry to ensure that there are no other businesses operating with the same name.
• Check the availability of domain names and social media handles before finalizing the name.

Brainstorm different ideas for the name using online name generators. And, don’t forget to get help from friends and family members to help finalize a suitable SaaS company name.

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6. Register Your Business

It’s important to legally register your SaaS business by complying with the applicable state and federal rules. Now, the registration process may vary depending on the industry you are planning to enter. So check that with an expert or official pages to ensure complete compliance.

Select a business entity

A business entity is the legal identity of your SaaS company that dictates its liabilities, tax structure, and regulatory compliance. It separates you from the business making it a completely separate entity.

SaaS companies can choose between sole proprietorship, LLC, C.corp, partnership, or LLC partnership business structure models for their business.

Identify the pros and cons of each business structure before determining the ideal structure for your software company.

Also, consider how you want your company to look in front of investors and the public. This will help you pick a business entity that’s suitable for your idea.

While registering a business, consider getting a DBA (doing business as) name if you plan to operate your business with another name.

Apply for tax registration & business EIN

Comply with the state rules and apply for tax registration of your SaaS company. Also, get your EIN number from an Internal Revenue Service (IRS) portal.

Employer’s identification number (EIN) is like the social security number of your business giving it a unique identity. This unique number is essential while applying for a business bank account, filing taxes, officiating payrolls, and filling out an application for a business credit card.

7. Build Your Product

After validating your ideas and gathering feedback from MVP, it is now time for software development of your product. Select a development methodology and get your test models working.

To build your product and work on software development, you will need a team with technical expertise. At this stage, you have one of the following options to consider:

• Hire an in-house team- remote or on-site
• Hire freelancers/ agencies

It is recommended to keep the development process in-house instead of outsourcing it. Having an in-house team will allow you to have complete control over the development and its scope. You can rigorously monitor the quality and speed up the process to meet your requirements.

Instead of renting a commercial place, it is better to hire a remote team and individual software developer. This will help you save unnecessary expenses on lease and monthly rentals. Don’t be afraid to make overseas hires. Invest in collaboration and communication tools to allow a seamless flow of development process in your company.

Also, stop waiting for a perfect time. Start as soon as the MVP of your product is ready. Get your landing pages in line and start with light advertising. It’s recommended to start collecting contact information of your target customers and running targeted ads on them.

8. Consider Your Funding Options

Now comes the funding. You need funds to start software development and work on your SaaS company. The question is how much fund will you require and where will you acquire that funds from?

If you haven’t made the financial projections earlier, it is the perfect time to work on it. Get detailed projections for sales, revenue, startup costs, and overhead expenses to assess the flow of money in and out of the business.

Many SaaS companies venture into the market by bootstrapping their projects. And ideally, it’s the right way to do so. However, if you don’t have enough funds, here are a few options for you to consider:

• Angel investors
• Venture capital firms

It’s also a feasible option to get lending from friends and family instead of relying on angel investors right from the beginning. Doing so will have two advantages. Firstly, you will have complete control over the product and secondly lower liabilities.

However, venture capitalists and angel investors can offer an influx of cash that can prove to be beneficial in development and marketing activities.

Overall, assess your needs and understand the implications of each before pitching your plan to potential investors.

9. Establish Your SaaS Brand

The market is crowded with SaaS businesses trying to capture their share of the market. To stand tall in the competition, you need to create a remarkable brand with a solid competitive edge.

The first step in branding would be to determine the look and feel of your software product and your overall SaaS company. Begin by putting together the logo, colors, and designs that will dominate your SaaS software.

Ensure that the visual elements of your software align with the tone you want to establish in the market. For instance, if you want to come across as a functionally professional but quirky software brand, you need your user interface to align with that image.

Even the domain name is part of your branding strategy. Splurge a little and get a powerful domain name for your SaaS company. A short, simple, easy-to-spell .com extension will help you establish a solid presence right from the beginning.

Lastly, ensure that you have your core values, mission, and purpose clearly aligned. Having clarity in vision will help you create a compelling brand value in the minds of your target customers.

10. Develop a Marketing Strategy

Now, that your software is ready, what are your plans for customer acquisition? Even the most brilliant SaaS software needs to make its presence in the target market to start getting sales.

In this step, you will design your go-to-market strategy to market your SaaS software. Even if you are testing the product on early adopters, you do need a proper marketing plan to reach the target audience.

Wondering what makes a perfect marketing strategy? Well, answer these questions to get your answer:

• What will be your sales strategy and the sales channel?
• How much budget will you spare for marketing activities?
• What marketing tools will you use?
• Will you work on marketing in-house or hire an agency?
• What marketing channels can benefit you?

Now, you can choose a variety of marketing channels to build brand momentum in the market. From content marketing to paid Google adverts, email marketing, influencer marketing, and Social media- your marketing strategies can be as extensive as your budget and resources.

Understand that different marketing activities serve different purposes.

For instance, content marketing by writing educational and informative blogs can help establish your credibility as an expert in the market but not necessarily get you sales. Landing pages and Email adverts on the other hand are a perfect go-to-market strategy for converting your potential clients.

Ideally, you should do a bit of everything initially to figure out what might and might not work for you. Don’t sweat much about the marketing costs. This is an investment you make in increasing your outreach as a SaaS brand.

11. Measuring Success with Metrics

You successfully launched your SaaS company after conducting market research and a series of trials. But hey, this is not it.

In order to run a successful business, you need to consistently monitor and track the performance of your product and marketing activities.

Using the customer data, design customer surveys and understand what these people like and dislike about your product. Get an in-depth analysis

Gather the customer data and run surveys to understand customer satisfaction with apps, products, pricing, websites, and other factors. Dive a little deep to check if the customer is in tune with your value proposition and business offerings.

Now, use this data to measure your KPIs (key performance indicators) and enhance the effectiveness of your product and marketing strategies.

And, that’s pretty much everything to get you started. Now, read along and make sure to not make these mistakes while starting a SaaS company.

Key mistakes to avoid when building a successful SaaS company

Thousands of SaaS startups start every year. However, most software companies lack a solid foundation to withstand the dynamically changing market.

Here are a few mistakes you must avoid to set a strong foothold in the market.

1. Passive marketing

Don’t make a mistake like other SaaS entrepreneurs who skimp on marketing activities. Marketing is a costly affair- accept it.

Building an amazing product won’t bring you customers. Consistent, proactive marketing efforts will. Conduct a detailed market analysis and identify different strategies that might attract customers to your business.

SaaS businesses thrive in a competitive market space. Figure out a way to increase your marketing reach and also measure the performance of each activity to determine what works for you.

2. Focused on too many problems

Instead of solving all the problems in an ineffective way, stick to one customer problem and solve it efficiently.

Only solve one primary concern with your product. Build your SaaS features around that problem and focus on simplicity and ease. Having one core problem will help you market your SaaS solution effectively in the market.

3. Leaving behind security

Invest heavily in the security aspects of your SaaS application. Not only will you establish yourself as a credible business, but having well-built security will save you from major security breaches.

In many cases, negligence on your part can result in heavy fines and penalties from the government.

4. Undermining the importance of maintenance

The customer experience is of utmost importance for the SaaS business model. Maintaining software might not be at the top of your priorities until a significant issue pops up.

However, such untimely chaos will result in prolonged downtime of the SaaS application and extra costs, something that can be avoided by having a proactive maintenance plan in action.

5. Not accepting the change

Most SaaS startups fail because of their inability to change and adapt. If you plan to stay successful for decades, you need to be flexible.

Sometimes the strategies that worked for you initially might not work later on because of certain reasons. In such moments, it’s upon you to nourish your business outlook with a new approach.

Avoid these mistakes and keep yourself abreast with the changing market while starting a new SaaS company.

Can you start a SaaS company with no technical background?

Absolutely, you can. Having technical expertise can be an added advantage when starting your own SaaS company. But it is not absolutely crucial.

Partner with the right people with a strong foundation of technical know-how. It’s ideal to have a Chief Technical Officer on board when the owner or the CEO lacks the stronghold on the technical front.

However, to get the right people on board, you must know at least the basics of technical aspects to understand the severity of the situation whenever a technical roadblock arises. It’s easier to acquire knowledge online and learn basic coding if you put your mind to it.

Lastly, consider acquiring a ready SaaS product from the market and getting it white-labeled for your SaaS startup.

Evaluate your options and enter this thriving marketplace with a stellar SaaS business idea.

The process of starting a SaaS company is time-consuming. From filtering the business ideas to developing an MVP to working on its development and marketing it to the right audience- it will take a whole lot of work on your end to set it right.

However, more important than anything, is to get started quickly. Get your product out there in the market- ASAP. Don’t wait to perfect the dreamy ideas while someone else captures the market with your idea.

Once the product is out test it, monitor it, iterate the changes, and keep refining it to sail through the tough waters of a competitive world.

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Frequently Asked Questions

How is saas different from traditional software.

SaaS and traditional software differ primarily in their method of delivery and pricing. SaaS is hosted over the cloud whereas traditional software is downloaded over desktop and PC devices. Further, SaaS generates revenue through monthly subscription fees, whereas traditional software companies charge a one-time flat fee to download their software.

How do I identify a target market for my SaaS product?

Begin by conducting thorough market research to understand the needs, pain points, and preferences of your potential customers. Draw a clear persona of your potential buyers to understand who will pay for your SaaS services. Also, dive deep into the market analysis to identify your potential competitors and your competitive edge.

Do I need a business plan for my SaaS startup?

Absolutely, yes. A business plan is essential regardless of whether you are starting a new SaaS startup or scaling the current SaaS model. However, instead of having a traditional 40-page plan, begin by writing a lean plan. Once your SaaS business idea is validated you can add detailed projections for finances and other details to your plan.

How do I create a financial model for my SaaS company?

Before launching your SaaS business, you need to determine the revenue model suitable for your particular target market. Most SaaS companies generate their revenue through subscription-based models by charging flat fees, tiered pricing, or user-based pricing fees.

Identify what pricing model will suit your customer and create a suitable hybrid mix.

What are some common mistakes to avoid when starting a SaaS company?

Here are a few mistakes you must avoid while starting a SaaS company:

• Solving too many problems.
• Not focusing on marketing activities.
• Leaving the aspect of security and maintenance unattended.
• Not identifying the right problem or target market mix.

About the Author

Shyam Dua is a seasoned tax professional with 40+ years of experience & a mentor at SCORE. He stands out due to his exceptional business planning skills. With a keen eye for detail and a strong financial acumen, Shyam crafts compelling business plans that pave the way to success. A CPA with a philanthropic heart, Shyam's strategic expertise, and dedication make him an invaluable asset in shaping thriving business ventures. Read more

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Table of Contents

SaaS Marketing

SaaS is a hectic industry. It’s an ever-growing, straight-talking, constantly innovating world of solutions that help people and businesses do better, every day. That’s why we love it.

And if you’re an entrepreneur, you’ll also love the fact that it’s a market worth billions of dollars that is literally taking over the world.

Perhaps you have an idea for a SaaS product, and you’re looking for resources to help you put your ideas into action and get the wheels turning. It’s been a crazy year, but technology is still moving and you don’t want to get left behind.

We’ve put together some helpful SaaS business strategies, plans, and advice to help you with setting up your business and planning the scale-up journey.

Let’s get started.

Define: SaaS Business

SaaS (software as a service) products play an important role in our personal and professional lives.

It’s a market worth $105 billion in the US alone and it grows by 30% each year . If you’re an ambitious entrepreneur, that’s all you need to hear.

SaaS businesses stretch across all industries, from music to team management to healthcare, so you’ll find innovative software solutions in every specialized sector and niche.

So, how do we know something can be classed as software as a service?

SaaS is a software product that…

• Is accessed via an online platform or app
• Solves a particular problem
• Targets a particular group of people
• Uses a subscription model

We have cloud computing to thank for the evolution of SaaS businesses.

It’s a simple concept nowadays – software is stored and maintained in the cloud, and businesses pay for access to this software.

But it’s taken some serious technological advancement to get here, a point where high-performance software is readily available to anyone with an internet connection.

I’ve got a simple (maybe too simple) analogy for explaining SaaS businesses compared to other, older, methods of software use. You can use it when your parents ask you why you’re moving out of their cup noodle-littered basement and into your super yacht.

Let’s say you want a pizza. Because let’s be honest, everyone wants a pizza, all of the time. I’m so hungry, man.

You have two options:

• Planting some wheat
• Picking up the phone

You could buy a farm. You plant all your crops and take care of all your livestock. You harvest the grains, store them, and grind them to make flour. Etcetera. You now have all the ingredients required to make a pizza – all from your own premises. This is like “On-Premise” software. It’s installed, stored, maintained, and run on-premises.

You could also call your local pizza place, order your favourite – Hawaiian, obviously – and enjoy a delicious pizza within half an hour. The quality is always good, you don’t have to know anything about yeast, and it’s pretty cheap.

This is SaaS. Fresh, hot, Hawaiian pizza, delivered to your device.

SaaS Vs. Legacy Systems

Businesses in every industry, if they weren’t already built with cloud-based software, are making the switch to SaaS from traditional legacy systems.

To your average business owner, particularly if they’re a boomer, legacy systems are what they’ve always known.

It’s a scary thing to learn that all data is now stored in ‘the cloud’, but they’re starting to realize that competitors are moving faster because they’re using more modern tools.

Take wealth management, for example. It’s an old industry and it’s often run by older people (who are very good at what they do and have decades of experience).

The thing is, a shocking amount of wealth management takes place using clunky, ancient legacy systems (I’m talking about the software, not the people).

Heck, billions of dollars in assets might be tracked using a mission-critical spreadsheet. Let’s say old wealth manager Joe presses the wrong button in Excel – beep boop, he’s lost his client’s data.

This is where SaaS businesses save the day. When presented with the pros and cons, it’s a no-brainer:

In every industry – banking, beauty, education, finance, music, travel – SaaS businesses are riding the wave of cloud computing to offer businesses (and consumers) a far more advanced tool that is much simpler to use and, critically, far cheaper to run.

So, Mr/Ms. Entrepreneur, what kind of SaaS are you going to sell?

What Is Your SaaS Business Going To Look Like?

When mapping out a SaaS strategy for your startup, there are some fundamental parameters that should be in place.

• Solving a specific problem
• Catering to an audience you know and respect
• Pricing that demonstrates value

Your SaaS product is only going to be valuable if it solves a real, tangible problem for people. A problem that is so crucial that the solution is an urgent requirement.

At the most basic level, your SaaS business should be selling a product that helps other businesses make money.

Then there’s the audience for your SaaS business. You’ll get the best results from targeting a group of people that you know very well and, most importantly, that you respect.

Why? Because, if you want to succeed, you’re going to have to talk to them. A lot.

Now, price is obviously an essential factor because that’s how you make a seamless transition from your current clunker to a golden lamborghini. But it’s also how people perceive the value of your product.

If your product is valuable enough, if it truly solves a problem and helps businesses make money, they’ll be willing to pay for it.

Creating Your SaaS Business Plan

Okay, so you’ve got the concept for your SaaS business, you might have even started to dabble in development.

But you’ve got to get investors on board. To do that, you need a clear SaaS business plan that’ll persuade even the meanest dragon in the den that your product is the one.

SaaS Startup Business Plan: Traditional Vs. Lean

When you approach creating a business plan, you’ve got two options:

• Traditional Business Plan
• Lean Business Plan

A traditional business plan is a full-scale, 40-odd page manifesto that covers the following essential aspects of your SaaS business.

By the end of it, you’ll have a very serious-looking document that’ll have you feeling like a very serious business person.

The thing is, this is quite an old school method of business planning that doesn’t suit the environment where SaaS thrives.

In this industry, the entire market will shift, new competitors will emerge, new technologies will be invented, all in the time it takes you to write a 50-page document to send to Peter Jones.

So how do SaaS businesses plan their growth strategy without pinning themselves down? A Lean business plan.

Why A Lean Business Plan Suits SaaS Businesses

You’ll still need to cover the essentials, but there’s more wiggle room around areas that are constantly changing in the SaaS world.

Lean SaaS Business Plan Template

As well as your SaaS business plan, you need to provide two things:

• Clear vision and goals
• Assurance of profitability

Showing clarity and decisiveness around your business goals not only gives your business direction and momentum but impresses potential investors who will share your confidence in your SaaS business.

Of course, confidence is all hot air without proof of profitability. Make sure you’ve defined a clear path to profit and know your numbers because that’s what it boils down to when gaining investors.

Understanding The SaaS Business Model

So, we’ve established that SaaS is not like other girls because it sits on the cloud and, instead of investing a ridiculous amount into on-premise tech, businesses pay a small fee to access the data on a subscription.

All the major hallmarks of selling a tech product go out the window with SaaS – no physical product, no end-user license, no infrastructure needed to host the software – just log in on a web browser and maybe an app download.

Therefore, the core business model of any SaaS business is recurring subscription fees.

One-off sales are no longer the goal, instead, the focus is on the lifetime value of a customer. There are a number of ways a SaaS business can grow to maximize revenue, such as up-selling, partnerships, and affiliate marketing, but the core moneymaker is the subscription.

This is where the value of your product is everything, and I’ll circle back to the essential ingredient – helping businesses make money.

Think of the top SaaS businesses out there right now: Salesforce, Monday, Zendesk

If your software product is valuable enough, a business will:

• Use it for vital business activity – from task management to CRM organization to selling products
• Start building processes around the program – so even if a competitor comes along, they’ll stick to what they’ve been using
• Become reliant on the service it provides
• Pay just about anything to continue using and benefitting from it

SaaS leaders have cracked this code – and you can too, but there are many challenges to overcome (and that’s if your product is decent).

The SaaS business model sounds relatively straightforward, but it comes with many challenges. Let’s go over them:

Yikes. No wonder 92% of SaaS startups fail . That super yacht looks so far away when you’re deep in the Valley of Death, running through the last of your capital, and desperately pitching to investors while sleeping on your friend’s couch.

Knowing Your SaaS Business Has Made It (Key Metrics)

So, how do you know if you’ve made it? What are the SaaS marketing metrics for success if you’re running a SaaS business?

Let’s run through them. You should know these figures off the top of your head when you’re approaching investors.

• Customer acquisition cost
• Monthly recurring revenue
• Average revenue per account
• Customer lifetime value
• Customer retention rate

Churn is the most powerful metric for measuring SaaS success.

Customers will inevitably unsubscribe, whether it’s because they’ve found a better solution, they can’t afford the subscription, or they simply no longer need your product.

To calculate churn for a specific period, simply divide the number of unsubscribed customers by the total number of customers.

If your churn rate is increasing each month, you know you’ve got a problem.

Customer Acquisition Cost (CAC)

This is a great indicator for profit.

Divide the total cost in marketing and sales by the number of acquired customers.

Monthly Recurring Revenue (MRR)

A simple way to predict incoming revenue so you know how you’re tracking, without taking into account fluctuations in churn and customer acquisition. Multiply the number of customers by the average revenue each month.

Average Revenue Per Account (ARPA)

The average revenue acquired from one client each month or year. Calculated by dividing the total MRR by the number of customers.

Customer Lifetime Value (CLV)

This one’s a bit more complicated, but it’s one of the most important SaaS business metrics to track. It represents the average amount of revenue you can squeeze out of customers for the amount of time they stay with your company. Multiply the average revenue per account by the percentage gross margin, then divide it by the average churn rate.

Customer Retention Rate (CRR)

This just shows how many customers have stuck to using your software over time, proving the success of your marketing efforts and the value of your product. Divide the number of customers currently using the software by the total number of customers at the start of the specific time period, then multiple by one hundred to get the percentage.

The Marketing Approach To SaaS

You’ve developed your SaaS business plan, you know it like Chewbacca knows the Millennium Falcon, and you’re ready to send that sh*t into hyperspace.

SaaS growth is serious business. Every SaaS company navigates it differently, but it tends to look like the following stages:

When it comes to growing your SaaS business, you need a killer SaaS go-to marketing strategy.

This is obviously our area of expertise, so we’ll share our top SaaS marketing strategies and show you how to tackle the challenge of attracting customers with marketing.

Build Your Audience First

To truly master SaaS marketing, you should be thinking about it right at the start of your startup journey.

Before you start perfecting and developing your MVP, we highly recommend you start investing in your marketing essentials, including:

• Social media profiles
• Email marketing campaigns
• Product demonstrations

We’re not suggesting you invest in an inbound marketing agency right at the start, that wouldn’t be wise at all, you need that early capital.

But simply investing time and some resource into your marketing essentials, particularly your website, helps you build your audience alongside product development.

This helps you achieve a number of things:

• Test your USP
• Increase awareness of audience pain points
• Establish a relationship with your ideal customers
• Develop your brand voice
• Build anticipation for your product launch

By keeping marketing in mind from day dot, you save yourself from crafting an entire brand personality at a time where your product is ready and marketing should just plug and play to get the results you want.

It might mean doing a fair amount yourself, from writing the odd blog to posting on LinkedIn and setting up a mailing list.

For example, this fintech startup has been publishing high-quality blog content on its beautiful website since way before they started scaling up this year.

This means that, by the time they hit the hyper-growth phase and customer acquisition skyrockets, they’ve got a goldmine of epic content ready to make sure none of that organic traffic goes to waste.

Outbound vs. Inbound SaaS Marketing

Okay, so you’ve figured out how to start a SaaS business. You’ve got your MVP ready to go, some investors on board, and it’s time to start building an online presence to attract customers.

You know this means marketing, and you know that costs money, but you’re unsure how to best use allocate your funds to maximize results. The last thing you want to do is throw all your marketing spend at an ineffective campaign.

When it comes to B2B SaaS marketing, you’ve got two methods:

• Outbound marketing
• Inbound marketing

Outbound marketing uses tactics that directly target your audience, reaches into their day to day world, and initiates a conversation.

Traditional forms of outbound marketing involve radio ads, infomercials and those insidious cold calls at dinner time that provoked your Dad to swear in your presence for the first time.

Today, outbound marketing is all about social media and Google Ads. Companies pay to have their content displayed in front of users who Google, Instagram, LinkedIn, or Facebook recognize as belonging to their target audience.

Outbound marketing had a bad reputation for being manipulative and too in-your-face, which says a lot about a society that is sick to death of looking at advertisements. I mean, 81% of people will close their browser due to a pop-up ad.

But outbound marketing can be useful for businesses, particularly startups who need some traction with their online presence. It’s a useful way to track ROI – you pay a certain fee and get a certain amount of engagements.

Then there’s inbound marketing. Inbound marketing tactics are subtle – where outbound deals in flashy fonts, inbound provides education, subtlety, and value.

Rather than selling your SaaS product outright, inbound marketing educates your audience about the product and topics relating to it – how it works, how it solves a problem they face, what they can achieve with it, why it’s better than other products, why they should care about it.

Rather than persuading people to ‘buy now’, inbound marketing methods seek to gently steer your audience towards your product and showcase it’s value – with the goal that they’ll know where to find you when they need the product.

The most powerful form of inbound marketing is SaaS content marketing – words that work wonders for your business.

Inbound marketing is highly valuable to B2B SaaS for numerous reasons:

• SaaS products require more explanation for people to understand their value
• B2B customers take longer to make decisions so need more to read
• B2B decisions require discussion so need well-researched content
• SaaS relies on recurring revenue so customers need consistent value from content

There are many SaaS inbound marketing examples out there, all of which demonstrate the long term ROI that comes from building a goldmine of valuable content for your audience.

What’s more, SaaS inbound marketing is far more strategic. Different tactics and types of content can be engaged to guide leads down the marketing funnel to the point where they make the decision to purchase.

The SaaS Marketing Funnel

In every B2B SaaS marketing and lead generation guide , you’ll learn about the marketing funnel.

Basically, the funnel maps out every stage in a buyer’s journey from just noticing your product, to buying it and raving about it.

At its most basic level, the B2B SaaS marketing funnel has three stages:

• Consideration

By taking the time and using your knowledge of your customer persona, buyer journey, and your product, you can create an inbound marketing strategy that leverages the right content to attract customers at each stage of the marketing funnel.

With a future-proof inbound marketing strategy and a team of SaaS marketing experts by your side, your scale-up journey can be supported by high-value content that takes care of new leads and turns them into sales.

Conclusion: Let’s Get Down To Business

Let’s face it, inbound marketing is a serious long-term investment. To build a goldmine of content to nurture your leads, you’re gonna need a serious amount of high-quality blogs, case studies, landing pages, and videos.

If you’re an entrepreneur who’s just figuring out how to start a SaaS business, you likely won’t be able to hire an inbound marketing agency for a little while.

But that doesn’t mean we can’t help out. We want to support entrepreneurs looking to take SaaS further with solutions that’ll shape the world we live in tomorrow.

That sounded pretty cheesy, but we mean it. If you’re putting together inbound marketing strategies for your SaaS startup, let’s talk .

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Chris Onyett

Chris is one of the managing partners at Roketto. His area of expertise is digital marketing and loves sharing and educating on topics like Google Ads, CPC bidding tactics, Google Analytics, and marketing automation. When Chris isn't in the office, he enjoys playing volleyball, mountain biking, and hiking with his American Eskimo.

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How to Write a SaaS Startup Business Plan [Sample Template]

Are you about starting a Saas startup company? If YES, here is a detailed sample Saas startup business plan template & FREE feasibility report. A software as a service (or SaaS) company is one of the businesses that is bound to become highly successful in this age and time. This is because processes and systems in our daily lives are becoming automated and this can only be achieved with the help of software apps.

Software as a service (or SaaS) is an emerging paradigm Business model or concept that enables software to be delivered as a service to customers. This is an arrangement that enables companies to expand their network capacity, and run applications directly on a vendor’s network, offers a host of advantages with the most primary being radically lower IT costs.

The lower budgetary requirements and commitments allow even smaller companies to piece together an IT project without spending on purchasing legacy server, and storage systems. It is important to state that, due to the technical nature of this business and the need to understand what you will be getting into from the business aspect, it would be wise to consult with a business consultant before starting the business.

This is to enable the business consultant go through your business concept and advise you on whether to proceed with the business or not. Below is a sample software as a service (or SaaS) business plan template that can help you successfully write your own with little or no stress.

A Sample SaaS Startup Business Plan Template

1. industry overview.

Software as a service (or SaaS) is part of the Business Analytics and Enterprise Software Publishing industry and players in this industry consist of companies that are into ERP software, bi software, crm software, scm software and other software development and they may decide to strictly adopt the Software as a services (SaaS) business model.

A recent report published by IBISWorld shows that the Business Analytics and Enterprise Software Publishing industry has grown steadily due to favourable demand conditions caused by high corporate profit and investment. Over the five years to 2018, industry revenue rose at an annualized rate of 7.1 percent, driven by businesses’ increased technological complexity and eagerness to adopt efficiency-enhancing software.

The report also shows that many industry products, such as customer relationship management and enterprise resource planning software systems, have become basic tools in the management of large companies. In 2018, industry revenue is expected to rise 2.6 percent to $55.4 billion. The world’s largest software companies have spent the past five years acquiring high-performing enterprise software vendors, cloud companies and data.

The report further states that over the past five years, the Business Analytics & Enterprise Software Publishing in the US industry has grown by 7.1 percent to reach revenue of $55bn in 2018. In the same timeframe, the number of businesses has grown by 10.0 percent and the number of employees has grown by 10.2 percent.

The Business Analytics and Enterprise Software Publishing industry is indeed a growing industry and is gaining grounds around the world. Statistics has it that in the united states of America alone, there are about 2,869 registered and licensed business analytics and enterprise software publishing companies (Software as a services (SaaS) business model inclusive) responsible for employing about 139,347 people and the industry rakes in over $55 billion annually.

The industry is projected to grow at 7.1 percent annual growth within 2013 and 2018. The companies holding the largest market share in the US industry include SAP SE, International Business Machines Corporation, Salesforce.com Inc. and Oracle Corporation.

Some of the factors that encourage entrepreneurs to start their own Software as a services (SaaS) business could be the growing recognition of economic and operational benefits and the efficiency of this business model. As companies ease out gradually from the economic uncertainties and financial shackles, widespread adoption of

Software as a services (SaaS) services is in the offing. The pragmatic and successful adoption of this technology concept will pave the way for mass enterprise adoption of Software as a services (SaaS) in the upcoming years.

The transition of enterprises from virtual machines to the cloud will additionally extend the impetus required for strong growth of Software as a services (SaaS). Poised to score the maximum gains will be end-to end cloud-computing solutions that offer complete functionalities ranging from integration of internal and external clouds, automation of business-critical tasks, and streamlining of business processes and workflow, among others.

The bottom line is that starting a Software as a service (SaaS) company requires professionalism and good grasp of the ICT industry. Besides, you would need to get the required certifications and license and also meet the standard security expected for players in the industry.

2. Executive Summary

Rex Boston™ Software as a Services (SaaS) Company, Inc. is a player in the Business Analytics and Enterprise Software Publishing industry that will specialize in offering software as a service (SaaS) for a wide range of clients all across the United States of America and the globe.

The business will be based in San Diego – California and we were able to secure a well – positioned and standard office facility. We are aware that to run a standard Software as a service (SaaS) company can be demanding which is why we are well trained, certified and equipped to perform excellently in our chosen line of business.

Rex Boston™ Software as a Services (SaaS) Company, Inc. is a client – focused and result driven Software as a service (SaaS) company that is into ERP software, bi software, crm software, scm software and other software development. We will provide broad – based software development and business support services at an affordable fee that won’t in any way put a hole in the pocket of our clients.

We will offer standard and professional services to all to our clients at local, state, national, and international levels. We will ensure that we work hard to meet and surpass our clients’ expectations whenever they buy our products (software) or hire our services.

At Rex Boston™ Software as a Services (SaaS) Company, Inc., our client’s best interest would always come first, and everything we do is guided by our values and professional ethics. We will ensure that we hire professionals who are experienced in the business analytics and enterprise software publishing industry in general.

Rex Boston™ Software as a Services (SaaS) Company, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

Our plan is to position the business to become the leading brand in software as a service (SaaS) business in the whole of San Diego – California, and also to be amongst the top 10 SaaS companies in the United States of America within the first 10 years of operation.

This might look too tall a dream but we are optimistic that this will surely be realized because we have done our research and feasibility studies and we are confident that San Diego is the right place to launch our SaaS business.

Rex Boston™ Software as a Services (SaaS) Company, Inc. will be owned and managed by Rex Boston.  Rex Boston has a Bachelor of Technology. He is a certified SOC 2 – Trust (SOC 2 is designed specifically for SaaS operations) and has over 10 years’ experience working in related industry as a senior software engineer prior to starting Rex Boston™ Software as a Services (SaaS) Company, Inc.

3. Our Products and Services

Rex Boston™ Software as a Service (SaaS) Company, Inc. is going to offer varieties of services within the scope of the business analytics and enterprise software publishing industry in the United States of America. Our intention of starting our SaaS company is to work with a wide range of clients.

We are prepared to make profits from the industry and we will do all that is permitted by the law in the United States to achieve our business goals, aim and ambition. Our business offerings are listed below;

• ERP software development
• BI software development
• CRM software development
• SCM software development
• Other software development
• Back – end business support

4. Our Mission and Vision Statement

• Our vision is to build a Software as a services (SaaS) company that will be listed among the Fortune 500 companies in the United States.
• Our mission is as a software as a services (SaaS) is to help a wide range of clients develop customized software that will help them simplify their businesses and operations and also give businesses the needed back – end support.

Our Business Structure

We would have settled for two or three staff members, but as part of our plan to build a standard SaaS company in San Diego – California, we have perfected plans to get it right from the beginning which is why we are going to ensure that we have competent, honest and hardworking employees to occupy all the available positions in our firm.

The kind of Software as a service (SaaS) company we intend building and the business goals we want to achieve is what informed the amount we are ready to pay for the best hands available in and around San Diego – California as long as they are willing and ready to work with us to achieve our business goals and objectives. Below is the business structure that we will build Rex Boston™ Software as a Services (SaaS) Company, Inc. on;

• Chief Executive Officer
• Programmers and Software Developers

Admin and HR Manager

• Digital Marketers (Marketing and Sales Executive)
• Customer Care Executive/Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Office:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Programmers and Software Developer

• Responsible for designing, installing, testing and maintenance of software systems for the organization
• Researching, designing, implementing and managing software programs
• Testing and evaluating new programs
• Identifying areas for modification in existing programs and subsequently developing these modifications
• Writing and implementing efficient code
• Determining operational practicality
• Developing quality assurance procedures
• Deploying software tools, processes and metrics
• Training users
• Working closely with other developers, UX designers, business and systems analysts
• Reviewing current systems
• Presenting ideas for system improvements, including cost proposals
• Working closely with analysts, designers and staff
• Producing detailed specifications and writing the programme codes
• Testing the product in controlled, real situations before going live
• Maintaining and upgrading existing systems once they are up and running
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Design job descriptions with KPI to drive performance management for clients
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defining job positions for recruitment and managing interviewing process
• Carrying out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversee the smooth running of the daily office activities.

Marketing and Sales Executive

• Identify, prioritize, and reach out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts
• Writing winning proposal documents, negotiate fees and rates in line with company policy
• Responsible for handling business research, market surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develop, execute and evaluate new plans for expanding increase sales
• Document all customer contact and information
• Represent the company in strategic meetings
• Help increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Prepare the income statement and balance sheet using the trial balance and ledgers
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Technical Help Desk Officer

• Responsible for providing technical assistance and support for incoming queries and issues related to our software
• Identifies problems and issues by performing relevant research using the appropriate tools and by following established procedures.
• Utilizes custom and standard software programs and applications as well as manual review to analyze transactional and customer record for fraud.
• Maintains control of an inbound call while following proper procedures in order to resolve open fraud cases.
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Consistently stays abreast of any new information on the company’s services and products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients

6. SWOT Analysis

Rex Boston™ Software as a Services (SaaS) Company, Inc. engaged the services of a core professional in the area of business consulting and structuring to assist the firm in building a well – structured SaaS company that can favorably compete in the industry.

Part of what the team of business consultant did was to work with the management of our organization in conducting a SWOT analysis for Rex Boston™ Software as a Services (SaaS) Company, Inc. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Rex Boston™ Software as a Services (SaaS) Company, Inc.;

Rex Boston™ Software as a Services (SaaS) Company, Inc. can boast of a competent technically sound team that has analytical and critical thinking skills that can help them find creative solutions for clients when they request for customized software apps. Aside from the synergy that exists in our carefully selected workforce, we have a very strong online presence are and we are well positioned to attract loads of clients from the first day we open our doors for business.

A major presumed weakness that is apparent to us is the inability to compete with big players in the industry especially as it relates to leveraging on economy of scales.

• Opportunities:

The opportunities in the business analytics and enterprise software publishing industry is massive considering the fact that the world is going the way of technology and software as a services (SaaS) is indispensable in the value chain of the info tech industry.

Some of the threats that we are likely going to face as a Software as a services (SaaS) business operating in the United States are hosting issues, installation or upkeep troubles, piracy, unfavorable government policies , and global economic downturn which usually affects purchasing/spending power.

7. MARKET ANALYSIS

• Market Trends

Beyond every reasonable doubt, the advancement we are enjoying in our world today can be attributed to the advancement of technology. Technology has indeed given leverage to all aspects of the human endeavor. To start with, it is the advancement of technology that landed man in the moon.

It is the advancement of technology that made transportation faster and perhaps cheaper. It is the advancement of technology that made the manufacturing of goods faster and cheaper. It is the advancement of technology that made it possible to treat terminal diseases like cancer, kidney failure et al and we can go on.

Interestingly, loads of businesses have started adopting automatization of their business processes and this is where SaaS business providers come in. There is no limit to what a software as a service (SaaS) company can do if they are creative and competent because their business model is all about proffering easy ways of doing things by creating software apps to simplify the process. Going forward, no business can survive if they don’t optimize their system with the needed software.

8. Our Target Market

We are aware that the nature of our business is geared towards serving B2B clients. Hence Rex Boston™ Software as a Services (SaaS) Company, Inc. will initially serve small to medium sized businesses, from new ventures to well established businesses and individual clients, but that does not in any way stop us from competing with the leading SaaS companies in the United States.

Will develop software apps for the following clients;

• Financial services providers
• Insurance companies
• Businesses in the health sector
• Supply chain businesses
• Other related businesses that may need SaaS technology

Our Competitive Advantage

The level of competition in the business analytics and enterprise software publishing industry does not in any way depend on the location of the business since most companies that offer software as a services (SaaS) can operate from any part of the world and still effectively compete in the industry.

Rex Boston™ Software as a Services (SaaS) Company, Inc. might be a new entrant into the business analytics and enterprise software publishing industry in the United States of America, but the management staff and owner are licensed and highly qualified software programmers and developers in the United States. These are part of what will count as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

We are mindful of the fact that there is fast – growing competition amongst Software as a services (SaaS) companies and other players in the business analytics and enterprise software publishing industry in the United States of America and around the globe; hence we have been able to hire some of the best business developers cum digital marketers to handle our sales and marketing.

Our sales and marketing team will be recruited base on their vast experience in the industry and they will be trained on a regular basis so as to be equipped to meet their targets and the overall goal of the organization. Rex Boston™ Software as a Services (SaaS) Company, Inc. is set to make use of the following marketing and sales strategies to attract clients;

• Introduce our business by sending introductory letters alongside our brochure to all companies, institutions, and internet – business oriented people and organizations within and outside the United States
• Promptness in bidding for SaaS contracts from companies, and internet – business oriented people and organizations within and outside the United States
• Advertise our business in relevant programming magazines, radio and TV stations
• List our business on local directories / yellow pages
• Attend international software as a services (SaaS) developers related, seminars, and business fairs et al
• Create different packages for different category of clients in order to work with their budgets
• Leverage on the internet to promote our business
• Join related associations around us with the aim of networking and marketing our services; we are likely going to get referrals from such networks.

Sources of Income

Rex Boston™ Software as a Services (SaaS) Company, Inc. is established with the aim of maximizing profits in the business analytics and enterprise software publishing industry and we are going to ensure that we do all it takes to attract clients on a regular basis and to get referrals from our clients.

Rex Boston™ Software as a Services (SaaS) Company, Inc. will generate income by offering the following services and products

10. Sales Forecast

Rex Boston™ Software as a Services (SaaS) Company, Inc. is well positioned to take on the available market in San Diego – California and in the cyberspace and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six months of operation and grow the business and our clientele base beyond San Diego to other cities in the United States of America and in the cyberspace.

We have been able to examine the business analytics and enterprise software publishing market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Rex Boston™ Software as a Services (SaaS) Company, Inc., it is based on the location of our business and the services and products that we will be offering;

• First Fiscal Year (FY1):  $350,000
• Second Fiscal Year (FY2):  $550,000
• Third Fiscal Year (FY3):  $1.5 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and internet shutdown within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.

11. Publicity and Advertising Strategy

Rex Boston™ Software as a Services (SaaS) Company, Inc. have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market.

We are set to take the software as a services (SaaS)/business analytics and enterprise software publishing industry by storm which is why we have made provisions for effective publicity and advertisement of our company. Below are the platforms we intend to leverage on to promote and advertise Rex Boston™ Software as a Services (SaaS) Company, Inc.;

• Place adverts on both print (community – based newspapers and magazines) and electronic media platforms
• Sponsor relevant community – based events / programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our brand
• Install our Bill Boards on strategic locations all around San Diego
• Ensure that all our workers wear our branded shirts and all our vehicles are well branded with our company’s logo et al.

12. Our Pricing Strategy

At Rex Boston™ Software as a Services (SaaS) Company, Inc. we will keep our product and service fees a little bit below the average market rate for all of our clients by keeping our overhead low. In addition, we will also offer special discounted rates to startups, nonprofits, cooperatives, and small social enterprises who want to develop software apps for their business.

• Payment Options

The payment policy adopted by Rex Boston™ Software as a Services (SaaS) Company, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Rex Boston™ Software as a Services (SaaS) Company, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via online bank transfer
• Payment via mobile money
• Payment via Point of Sales Machines (POS Machines)
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment without any stress on their part.

13. Startup Expenditure (Budget)

Essentially, these are the areas we are looking towards spending our startup capital on;

• The total fee for incorporating the Business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services P.O.S machines – $3,300.
• The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400.
• The amount needed to acquire a suitable Office facility in a business district for 6 months (Re – Construction of the facility inclusive) – $40,000.
• Marketing promotion expenses for the grand opening of Rex Boston™ Software as a Services (SaaS) Company, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The total cost for hiring Business Consultant – $2,500
• The cost for equipping the office (computers, software apps and hardware such as Application-specific integrated circuit (ASIC) machines, internet server, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $25,000
• The cost of launching our official website – $800
• Budget for paying at least two employees for 3 months and utility bills – $75,000
• Additional expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
• Miscellaneous – $10,000

Going by the report from our research and feasibility studies, we will need about Two Hundred and Fifty Thousand US Dollars ($250,000) to set up a small scale but standard Software as a services (SaaS) company in the United States of America.

Generating Funds/Startup Capital for Rex Boston™ Software as a Services (SaaS) Company, Inc.

Rex Boston™ Software as a Services (SaaS) Company, Inc. is owned and managed by Rex Boston. He is the financier of the company, but may likely welcome partners later which is why he has decided to restrict the sourcing of the startup capital for the business to just three major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $50,000 (Personal savings $40,000 and soft loan from family members $10,000) and we are at the final stages of obtaining a loan facility of $200,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future or better put, the sustainability and expansion of a business lies in the number of loyal customers that they have per time, the capacity and competence of their employees, their investment strategy and the business structure as it relates to succession plan. If all these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Rex Boston™ Software as a Services (SaaS) Company, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to offer our SaaS services a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while. Rex Boston™ Software as a Services (SaaS) Company, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of.

Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check : Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Conducting Feasibility Studies: Completed
• Leasing a standard and well positioned office facility in the heart of San Diego – California: Completed
• Generating part of the startup capital from the founder: Completed
• Applications for Loan from our Bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the needed software applications, internet server, furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with vendors and key players in the industry: In Progress

More on Online Startups

SaaS Business Plan Templates: A Roadmap for Success

As a CEO deeply immersed in the dynamic world of Software as a Service (SaaS), I intimately understand the exhilaration and challenges of steering a SaaS company. Thereby, I crafted from a place of both experience and empathy this article that will hopefully help you in your SaaS journey. In this era where agility meets innovation, the SaaS model stands as a testament to our collective quest for smarter, more efficient business solutions. Here, we’re not just discussing a business plan; we’re sharing a blueprint for success, tailored for the unique rhythm and nuances of the SaaS universe.

Part 1: Introduction to SaaS Business Plan Template

Understanding the saas business model.

The Software as a Service (SaaS) model has revolutionized how businesses operate and deliver value. In a SaaS setup, software is provided as a service, typically accessible online and billed on a subscription basis. This model’s scalability, flexibility, and cost-effectiveness make it a preferred choice for many entrepreneurs and investors.

Benefits of Having a Business Plan for a SaaS Company

A well-crafted business plan is pivotal for any SaaS startup. It serves as a blueprint, guiding entrepreneurs through the complexities of market dynamics, competition, financial planning, and strategic growth. A robust business plan helps in securing funding, setting realistic goals, and navigating the path to profitability.

Key Components of a SaaS Business Plan

A comprehensive SaaS business plan encompasses several critical elements:

• Executive Summary: A snapshot of your business strategy.
• Mission Statement and Company Overview: Defines your company’s core values and purpose.
• Market Analysis and Research: Provides insights into your target market and competition.
• Product and Service Offering: Describes your SaaS product and its unique value proposition .
• Marketing and Sales Strategy : Outlines how you’ll attract and retain customers.
• Operational Plan: Details the day-to-day operations and organizational structure.
• Financial Projection and Analysis: Presents a financial roadmap and key metrics.

Part 2: Creating a Comprehensive SaaS Business Plan

Executive summary.

In this section, we succinctly articulate the essence of your SaaS business. It includes a compelling description of your business concept, emphasizing the unique aspects that set it apart. Key financial projections are outlined, showcasing the promising trajectory of your venture. Additionally, a concise overview of the market highlights your product’s relevance and potential impact. For instance, if your service automates inventory management for small retail businesses, highlight any notable successes or endorsements from early adopters.

Mission Statement and Company Overview

Your mission statement and company overview are more than formalities; they are the heart of your business identity. Here, we detail how your company’s mission aligns with specific, actionable objectives. A narrative thread might be woven in, illustrating the evolution of your vision – perhaps a story about how a particular challenge in the industry inspired the foundation of your company.

Market Analysis and Research

• Identifying the Target Market and Customer Persona : This part includes a deep dive into your ideal customer profiles, using data-driven insights to paint a detailed picture of who they are, what they value, and how your product fits into their professional or personal lives.
• Analyzing Market Size and Trends : Leveraging recent statistics, this section underscores the growth potential of your sector. For example, data might show an increasing trend in cloud-based solutions in the healthcare sector, suggesting a ripe market for your services.
• Assessing the Competitive Landscape : A comprehensive SWOT analysis is presented here, offering a clear view of where your product stands in the competitive arena. This analysis provides strategic insights into leveraging your strengths and addressing potential weaknesses.

Product and Service Offering

This segment delves into the specifics of your product or service, detailing its features, functionality, and user experience. It also illustrates real-world applications and scenarios where your product solves key problems. Your Unique Selling Points (USPs) are highlighted here, pinpointing why customers should prefer your service over others. The section concludes with an overview of your Customer Relationship Management (CRM) strategy, emphasizing how it fosters lasting customer relationships and drives satisfaction and loyalty.

Marketing and Sales Strategy

This comprehensive strategy outlines your approach to capturing and retaining your target audience. It details the segmentation of your market, tailored marketing plans for each segment, and the channels and tools to be utilized. This part also discusses innovative customer acquisition and retention tactics, demonstrating a keen understanding of modern marketing techniques.

Operational Plan

The operational plan provides an in-depth look at your company’s structure, introducing key team members and their roles. It covers the product development life cycle, maintenance processes, and how these elements contribute to a seamless customer experience . The section on customer support and project management highlights the systems and methodologies in place to ensure operational efficiency and customer satisfaction .

Financial Projection and Analysis

In this subsection, we project the company’s revenue growth over the next three to five years. These projections are based on a combination of market analysis, historical data, and growth strategies. For example, Year 1 may show modest revenue as the company focuses on market penetration and building a customer base, with subsequent years showing a steeper revenue curve as brand recognition and market share increase. Different scenarios, like conservative, realistic, and optimistic forecasts, provide a comprehensive view of potential financial outcomes.

Here, we break down the various costs associated with running the SaaS business. This includes fixed costs such as salaries, office space, and utilities, and variable costs like server costs, customer acquisition expenses, and support services. A detailed analysis of these costs helps in understanding the breakeven point and how scaling up affects the company’s profitability.

Cost Structure

Income statement projection.

An income statement for the next three to five years is presented, offering insights into the company’s profitability. This statement includes revenue, cost of goods sold (COGS), gross profit , operating expenses, and net profit. The trend of these financial metrics over the years will illustrate the company’s growing financial health and its trajectory towards profitability.

Cash Flow Statements

Cash flow statements are critical for understanding the liquidity of the business. They provide a detailed view of the cash inflows and outflows over a specified period. For a SaaS business, this is particularly important as there may be significant upfront costs before steady revenue streams are established. Visual representations of cash flow help in quickly grasping the financial dynamics at play.

Balance Sheets

The balance sheet provides a snapshot of the company’s financial standing at a given point in time. It includes assets, liabilities, and equity. For a SaaS company, key aspects to highlight might include intangible assets (like software and patents), long-term liabilities (like loans), and equity capital.

Here is our template on an effective SaaS Balance Sheet, please note we added a tab that explains every data point that is used and how to get them :

Profit and Loss (P&L) Analysis

A detailed analysis of the profit and loss statement helps stakeholders understand the primary sources of income and major areas of expense. This section is crucial for identifying the drivers of profitability and areas where cost efficiencies can be improved.

Key Financial Metrics

Key financial metrics specific to SaaS businesses, such as Monthly Recurring Revenue ( MRR ), Customer Lifetime Value (CLV), Customer Acquisition Cost ( CAC ), Churn Rate , and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) are analyzed. These metrics offer a deeper understanding of the business’s performance and sustainability. For instance, a low churn rate combined with a high CLV suggests a strong, loyal customer base.

Part 3: Implementing and Refining the SaaS Business Plan

Execution and implementation strategy.

• Action Plan Development : Create a comprehensive action plan that aligns with your business objectives, detailing the specific steps needed to execute your business strategy effectively.
• Resource Allocation : Allocate resources judiciously, ensuring that each department has what it needs to meet its objectives, whether it be funding, manpower, or technology.
• Risk Management : Identify potential risks and develop mitigation strategies. This includes both internal risks (like product development challenges) and external risks (such as market shifts).

Setting Milestones and Objectives

• Short-term and Long-term Milestones : Establish clear, measurable milestones for different phases of your business. For instance, a short-term goal could be launching a beta version of your product, while a long-term goal might be achieving a specific market share.
• SMART Objectives : Ensure that each objective is Specific, Measurable, Achievable, Relevant, and Time-bound. This clarity will help in tracking progress and maintaining focus.

Outlining the Marketing and Sales Tactics

• Integrated Marketing Strategies : Develop a mix of digital and traditional marketing strategies tailored to your target audience. This might include content marketing, SEO, PPC campaigns, social media marketing, and offline events.
• Sales Funnel Optimization : Design a sales funnel that effectively converts leads into customers. This includes strategies for lead nurturing, upselling, and customer retention.

Establishing a Timeline and Roadmap for Growth

• Phased Approach : Create a phased growth plan. Start with the launch phase, followed by growth and scaling phases, each with specific objectives and strategies.
• Flexibility for Adaptation : While having a structured timeline, maintain flexibility to adapt to unforeseen circumstances or opportunities that may arise.

Monitoring and Evaluation

• Tracking KPIs : Regularly monitor key performance indicators that are aligned with your business objectives. This could include metrics like customer acquisition cost, lifetime value, churn rate, and revenue growth.
• Performance Reviews : Conduct regular performance reviews to assess the effectiveness of strategies and the progress towards goals.

Conducting Market Research and Surveys

• Continuous Market Monitoring : Stay updated with market trends and customer preferences through ongoing market research. Use tools like customer surveys, feedback forms, and market analysis reports.
• Leveraging Customer Feedback : Actively seek and incorporate customer feedback to refine your product and services, ensuring they continually meet market needs.

Making Adjustments and Refinements to the Plan

• Agility in Strategy : Be prepared to pivot your strategies based on market feedback and business performance. This could involve tweaking your product, altering your marketing approach, or revising sales tactics.
• Iterative Process : View your business plan as a living document, open to revisions and improvements as you gather more data and insights.

Team and Resources

• Building a Competent Team : Identify and recruit individuals who not only have the necessary skills but also share your company’s vision and values.
• External Advisors and Technical Support : Evaluate the need for external expertise, such as consultants or advisory boards, to fill knowledge gaps and offer fresh perspectives.
• Investment in Human Resources : Focus on continuous skill development for your team. Encourage training, workshops, and knowledge-sharing sessions to keep your team updated and motivated.

A SaaS business plan is more than a document; it’s a strategic roadmap that guides every aspect of your business. By meticulously crafting each section, you position your SaaS company for sustainable growth, innovation, and success. Good luck !

15+ years of experience in the software industry. Founder of Appvizer , the #1 website in Europe dedicated to professional software. President of B2B Rocks Association.

Product Led Growth vs Marketing Led Growth: A Comprehensive Guide for SaaS Entrepreneurs

SaaS Product Marketing: A Blueprint for Success

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A Full Guide to SaaS Financial Models - Template Included

SaaS financial models are documents that outline your SaaS business’s financial performance and projections for you and your investors. This can be challenging for entrepreneurs (and even some CFOs) because the SaaS business model poses unique challenges in terms of traditional financial modeling.

SaaS poses challenges like:

• Recurring Revenue: It can be difficult to predict future recurring revenue.
• Churn Rate: Your customer churn rate will directly affect your revenue projections.
• Costs: Costs are significantly different from traditional business operational costs for SaaS companies. 
• Value to Acquisition Cost Ratio: It can be difficult to determine an accurate customer lifetime value to acquisition cost ratio in recurring revenue models.

The good news is that there are tools that bring simplicity to developing a SaaS financial model.

Why Is It Important for Your SaaS Business?

SaaS financial models are important for both SaaS startups and established SaaS companies for several reasons. Among the most important include:

• Financial Planning: These models give you a better understanding of your company’s financial stability and where you may find hurdles in your financial plan. As a result, SaaS financial models are effective tools in financial planning.
• Service Pricing: When you build your financial models, you’ll have a better understanding of how much money it costs you to acquire and provide services to customers. You’ll also learn about the lifetime value of a customer. This gives you crucial data as you determine and adjust pricing for your services.
• Fundraising: Your SaaS financial models show where your company is and where it’s likely headed. They provide crucial information investors need to determine a fair valuation for equity in your company while showing investors that your interests are aligned with theirs, an interest in proper financial management.
• Business Planning: SaaS financial modeling can also uncover inefficiencies in your business plan, giving you the opportunity to improve operational efficiency and profitability.

What are the Main Types of Financial Models?

There are five types of financial models that you should build for your SaaS business. Each different financial model provides unique insights into your business and may reveal opportunities to make improvements.

Find the details on the five different types of financial models and what each type tells you below.

Operating Expense

The operating expense financial model is designed to outline your SaaS company’s operating expenses. These models are unique to SaaS businesses because your operating expenses are likely significantly different from the types of operating expenses a more traditional company might have.

Of course, you’ll have administrative, sales, and other expenses, but you’ll also have operating expenses that are unique to SaaS businesses, like:

• Server Expenses: Server expenses may be considered one of many in the cost of goods sold (COGS) column. SaaS companies typically require high levels of bandwidth, and the cost of that bandwidth will grow as more users sign up.
• Subscription Management Expenses: You’ll likely need a subscription management solution that adds simplicity to billing, client relationship management, and other aspects of running your SaaS business.
• Development Expenses: All companies have expenses associated with developing products and services, but SaaS companies must continue to innovate or they’ll be left behind by their competition. So, these expenses are likely quite a bit higher than what a more traditional company spends on innovation.

This model is important because it gives you the opportunity to prepare for expenses ahead of time.

Forecasting

A financial forecast model uses current data about your company to make financial projections. For example, this type of modeling results in earnings and revenue forecasts, both of which are significant factors for investors in your fundraising rounds.

Moreover, you can create forecasting financial models to forecast growth or lack thereof in metrics like gross margins, net margins, expenses, and more.

There are few seasoned investors who are willing to make an investment in a company without seeing its financial statements. These are statements that report how well (or how poorly) your company is doing to its stakeholders. Reporting financial models typically include three key financial statements:

• Balance Sheet: Your balance sheet outlines your company’s assets, liabilities, and shareholders’ equity.
• Income Statement: Income statements, also known as profit and loss statements or P&Ls, are financial documents that show how much income your company generated and how much it retained over a predetermined period of time, typically one quarter or one year.
• Cash Flow Statement: A cash flow statement is a financial document that tracks the inflows and outflows of cash that your company experiences from operations, investing, and financing activities.

Headcount Planning

As the number of customers your business serves grows, economies of scale begin to take effect. With a higher headcount, you’ll need more server bandwidth, but that bandwidth may become less expensive on a per-user basis thanks to increased volume.

A headcount planning financial model gives you the opportunity to plan for these changes ahead of time by forecasting future headcounts based on current growth and how higher numbers of members will relate to changes in operational finances.

Recurring Revenue

A recurring revenue financial model gives you more details on three key aspects of any SaaS business:

• MRR: MRR, or monthly recurring revenue , is the amount of money your company generates on a residual basis every month from sales.
• ARR: ARR , or annual recurring revenue, is the amount of money your company generates on a residual basis every year from sales.
• ARPU: Annual revenue per user is the amount of money you make each year for each individual user on your platform.

Your recurring revenue financial model gives you the data to make more accurate revenue growth projections and create effective financial and business plans.

Key Metrics to Include in Your Startup SaaS Financial Model

One of the biggest difficulties business owners have when developing financial models for their Saas businesses is that it can be difficult to decide which metrics are important to include. SaaS metrics differ significantly from the metrics you’d expect to include in a retail business.

However, financial models built using the wrong metrics do nothing for you.

The good news is that, while the SaaS industry is a relatively new one, the most important metrics for these businesses are already pretty well-established. These include average revenue per user, churn rate, customer acquisition cost, lifetime value (LTV) to customer acquisition cost ratio, and payback period.

Below you will find the details of each of these important metrics to use in your financial models.

Average Revenue per User

It’s important for SaaS companies to know how much revenue they generate per user on average at different time increments. Those include:

• ARPU per Month
• ARPU per Year
• Average Revenue Over a Customer’s Lifetime

When you determine your average revenue per user metrics it’s important to remember that subscription fees aren’t your only source of revenue. Make sure to also include sources of revenue like:

• Revenue from Upgrades: If 10% of your customers upgrade their services after working with you for three months, revenue per user increases after three months.
• Revenue from Add-Ons: You likely have multiple add-ons. It’s important to include the revenue you generate from add-ons in your ARPU calculations to get a complete view of the money your company generates from sales.

Customer churn rates tell you and your investors what percentage of your customers cancel their services over specific time periods. 

Customer churn rates tell you a bit about what percentage of revenue you’re likely to retain as recurring revenue because of renewals. If your three-month customer churn rate is 11%, you can count on retaining 89% of your recurring revenue every three months, even if you don’t bring any new customers in.

Investors also pay close attention to customer churn rates because they help determine how quickly your business can grow, or if it can grow at all. Your customer acquisition and retention rates must outpace your churn rate for your company to be successful.

Customer Acquisition Cost

Your customer acquisition cost is the amount of money you pay to acquire new customers. For example, if you run an ad with a $10,000 budget over the course of three months, and that ad directly results in 1,000 new subscribers, your customer acquisition cost is $10, meaning you paid $10 in advertising costs per paying customer.

It’s a good idea to track your customer acquisition cost with each advertisement to get a gauge for the advertisements that do better than others. However, from a business and investment perspective, it’s also important to average your customer acquisition cost over all campaigns to get an accurate number of how much it costs for you to acquire a new customer in general.

LTV: CAC Ratio

The customer LTV to CAC ratio may seem foreign, but it compares two metrics we’ve already talked about: the lifetime value of a customer and your customer acquisition cost. In order for your SaaS business to be successful, your customer lifetime value must be reasonably higher than your customer acquisition cost.

It’s wise to shoot for a minimum benchmark in this metric of three to one. That means you earn three times your customer acquisition cost over the lifetime of your relationship with your customers. For example, if it costs you $10 to acquire a new customer, you should earn at least $30 over the lifetime of that customer.

Payback Period

The payback period, often referred to as the CAC payback period, is the amount of time it takes for you to recuperate your customer acquisition costs after you’ve acquired a new customer. The longer this period, the more difficult it may be for you to scale in the future. For example, Company A and Company B both have a three-to-one LTV to CAC ratio.

However, Company A’s payback period is four months while company B’s payback period is nine months. Company A will be able to grow far faster than Company B because it receives a return on its customer acquisition costs more quickly.  This allows Company A to reinvest in growth faster than Company B.

How to Build a SaaS Financial Model

The best way to build a SaaS financial model is to take advantage of spreadsheet software like Microsoft Excel or Google Sheets. However, you don’t have to be a spreadsheet whiz to build your SaaS financial models; we’ve put together a template to make the process as simple as possible.

You can use our SaaS financial model as a Google Sheets or Excel template. Just follow the steps below.

How to Use Our Template

We’ve made creating a SaaS financial model easier than it’s ever been before. Simply follow the steps below to use our template:

• Download the Template: Navigate to our SaaS financial model template webpage and click “Download Template.”
• Answer a Few Questions: Answer a few general questions about your business, including who you are, who the founder of the company is, and your SaaS company website.
• Click Download the Scorecard: When you click this button, the download will begin.
• Open the Template: Use Google Sheets or Microsoft Excel to open our SaaS Financial  Model template.
• Fill In Fields: Fill in all empty fields with accurate information from your business.
• Review Your Financial Models: Our template does all the math and builds the financial models for you. Once you fill in all fields, you’ll be able to view accurate financial models for your SaaS company.

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Must-Have SAAS Business Plan Templates with Samples and Examples

Mohammed Sameer

Riches do not come by crossing your fingers and walking through the day hoping. Riches and wealth come from well-laid plans. - US entrepreneur Jim Rohn

Success is not a matter of luck but a result of strategic and actionable planning. To thrive in today's competitive landscape, you must acknowledge the importance of a well-crafted plan. Through this blog, SlideTeam invites you on an expedition of growth as we present our Must-Have SAAS Business Plan Template - a compass that directs you toward success.

Why do you need a SAAS Business Plan?

Let's take the example of “CloudMasters Inc.” Their meteoric rise from a startup to an industry giant is a testament to their finely-tuned SAAS business plan. They carved a market niche with a laser-focused approach and commitment to customer needs. This success story serves as validation of the potential that lies within a well-crafted SAAS business plan.

Now, let's talk about why our SAAS Business Plan Template is an absolute must for your entrepreneurial journey. It encapsulates years of industry expertise and best practices distilled into a comprehensive and user-friendly format. Whether you are a budding startup or an established enterprise, this PPT Set will be your compass, guiding you through the maze of the SAAS industry. It enables you to develop a clear and compelling value proposition, identify your target audience, and devise a winning go-to-market strategy.

Even better, our business plan ppt templates are 100% editable and customizable. The content-ready nature means you get a starting point and the structure you longed for with that perfect presentation. The editability feature means you can tailor the template according to the user profile. 

Let’s explore the template now!

One-Pager Business Plan For SAAS Company PPT Template

Step into the future of SAAS business planning with this high-impact PPT Set. Weaving together form and function, this PPT Layout presents a quick business overview that leaves no room for ambiguity. Using this PPT Design, you can address the core challenges head-on and present your solutions. Our template offers a well-structured layout, ensuring that your problem and solution section stands out as a testament to your strategic acumen and careful planning.

Inform stakeholders why you are ahead of the competition with a precise competitor analysis. Dive deep into the market landscape, analyzing industry-wise market revenue segmentation to identify untapped opportunities and potential growth areas.

Financial precision is a cornerstone of any successful business plan. This PPT Set provides a structured framework to present financial projections, budgets, and funding requirements with transparency. 

Targeting the right audience is key to driving success. With this resource, define your target market, understanding their demographics and preferences to tailor your SAAS company's offerings accordingly. Download now!

Download this template

From Wishes to Wealth

The words of Jim Rohn resonate with conviction, affirming that true wealth is born from well-laid plans, not from mere wishful thinking. Our Must-Have SAAS Business Plan Template is your launchpad, poised to drive you to new heights of success.

FAQs on SAAS Business Plan

What is a saas business plan.

A SAAS (Software as a Service) business plan is a strategic document that outlines a SAAS company's vision, goals, and roadmap. It encompasses a detailed analysis of the market landscape, target audience, competition, and revenue projections. The business plan lays out the product/service offering, marketing and sales strategies, operational structure, and financial projections to guide the company's growth and success.

What is the SAAS business model?

The SAAS  business model is a software delivery method where companies provide software applications over the Internet on a subscription basis. Instead of selling a one-time software license, SAAS companies charge customers a recurring fee to access and use their software on demand. The software is hosted on the provider's servers, and customers can access it through a web browser, eliminating the need for installation and maintenance on the user's end.

What are the three pillars of SAAS?

The three pillars of SAAS are:

• Scalability: SAAS  allows companies to scale their software and services to accommodate a growing number of users. The infrastructure can handle increased demand without significant investments in hardware or personnel.
• Accessibility: SAAS applications are accessible from any device with an internet connection, promoting seamless collaboration and remote work. Users can access the software and their data from anywhere, facilitating flexibility and productivity.
• Cost-effectiveness: SAAS operates on a subscription-based model, eliminating the need for upfront software purchase costs. This cost-effectiveness extends to maintenance, updates, and support, as those responsibilities lie with the SAAS provider.

Can SAAS be profitable?

Yes, SAAS  can be profitable. The subscription-based model allows  SAAS companies to generate recurring revenue, providing a predictable income stream over time. With the potential to scale efficiently and reach a global audience, successful SAAS companies can achieve high-profit margins. However, achieving profitability in the industry requires a well-defined target market, a competitive product, effective marketing and sales strategies, and a strong focus on customer retention and satisfaction.

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Powerful business plan templates

Plan for the future, no matter what your business plans are or the size of your business with these designs and templates. whether it's just one big project or an entire organization's worth of dreams, these templates will keep you and your company on track from ideation to completion..

Put your ideas to work with simple templates for every business plan

Every successful business took a lot of planning to get there, and these templates will be cornerstones of your future success. Whether you're looking to attract new business, pitch your services or reimagine your company, with these simple, customizable templates at your fingertips you can turn complexity into something tangible. These templates can become marketing assets or simply remain internal touchpoints for your team. And as your dreams change, you'll always have this template to refer to – it's easy to change what exists on paper. If you're a small business, focusing on your niche can help you dominate in your field, and you can forge a plan to figure out exactly what that niche might be and how to target your ideal customer . When it's time to share your vision with stakeholders, craft a presentation that outlines your plan succinctly and with style. Let these templates from Microsoft Designer be your partner in business strategy for years to come.

• Launch a Business
• Roll out New Pricing
• Expand Globally
• Shift to Subscriptions
• Move Upmarket
• Introduce Self-Serve
• E-Publishing
• OTT & Video
• North America
• Asia Pacific
• Founder/CEO
• Learning Hub
• Documentation
• Product Documentation
• API Documentation
• Services & Implementation
• Help & Support

• Retention & Churn
• Revenue Growth
• Updates & News

A Plug-n-play SaaS Financial Model Template and How to Use It

Done right, a SaaS financial model can be a very useful tool for strategic CFOs and finance leaders to make data-driven decisions and demonstrate future growth to internal and external stakeholders.

Irrespective of the growth stage you’re in, SaaS companies need financial models to drive insights from the company’s financial statements so that they can balance growth versus costs and forecast future revenue.

Before we get to the template , there are nuances to a SaaS financial model that one must understand.

What is a SaaS Financial Model ?

Simply put, SaaS financial modeling is a process of charting a summary of the expenses and revenues of your SaaS. It also includes present and future revenue forecasts and important KPIs that a finance leader must keep track of.

While traditional financial models might include these elements for a single product revenue projection, SaaS financial models must factor in the complexities of recurring revenue that comes in with subscriptions, churn , and the impact it has on predicting future revenue.

SaaS businesses typically incur high costs in their early stage , when the focus is on acquiring new  customers . Since the revenue is accrued over a period of time,  it is critical to track customer retention and reduce customer churn for SaaS businesses .

That’s why it is critical to use financial models that are tailor-made for the nuances of the SaaS business model .

Importance of a SaaS Financial Model  

There’s much more to efficiently running a business than having an understanding of your financial statements .

To earn a seat at the table and drive strategic growth, modern finance leaders must surface valuable insights that help leaders connect the dots internally. With a robust SaaS financial model in their arsenal, finance leaders can leverage data-driven insights to shape business strategy and the growth path for their company.

A SaaS financial model is important because:

• It gives you an understanding of the financial viability of the business.
• It gives you a sandbox to understand the impact certain strategies may have on your profitability,  through forecasting.
• It gives you a comprehensive picture of the cash flow in relation to the expenses.
• It helps you keep a close tab on your unit economics.

Key Components of a SaaS Financial Model

And with that, let’s begin with understanding the key components of a SaaS financial model and an excel model template we have prepared for you.

1. P&L Statement or Income Statement

The Profit and loss (P&L) report summarizes the cash flow statements and balance sheet of a company during a specified period. This report can act as the single source of truth to assess the financial health of a business and can be used to create viable financial plans .

From the P&L statement, you get a picture of expenses, profits before taxes, and ultimately, your gross profit.

2. Revenue Models

This is where you track your recurring revenue: Annual Recurring Revenue ( ARR ) and Monthly Recurring Revenue ( MRR ) . Common elements of this report include new MRR , expansion MRR , downgrade MRR ,  and churn MRR .

This report gives you an idea of revenue at the end of every month and also the % logo churn that has occurred.

The forecasting model can be used to create financial projections to predict future revenue growth for your SaaS.

3. Unit Economics

Unit economics express a company’s costs and revenue on a per-unit basis.  The importance of unit economics stems from the fact that it helps calculate profitability at the unit level, making it fundamental to most pursuits of growth and profitability. If you are profitable per unit, you must be profitable overall. So understanding unit economics also allows a business to make informed decisions with cost in mind. For example, we have Customer Acquisition Cost ( CAC ) , Customer Lifetime Value ( CLV ) , the CAC : LTV ratio , and the CAC payback period. These metrics act as crucial indicators in the efficiency of your SaaS operations and any SaaS business worth its salt should definitely keep its eye on them.

How to Use the SaaS Financial Model Template?

Our plug-n-play excel template for SaaS financial model is fairly easy to use. Here’s a complete walkthrough of the template .

There are some key points to remember when you begin using the template. The yellow cells are where you input your company’s numbers in order to populate the rest of the report. Here’s a step-by-step guide to using the template:

Revenue Report:

• Right at the top, we first calculate one of the most important SaaS metrics, ARR. We take the starting  ARR in January, add new and expansion revenue, subtract the downgrade revenue and churn to get the final ARR for that month. This figure becomes the beginning ARR for February.
• New ARR comes from multiplying the number of deals acquired in that month into the ARPU – average revenue per deal.
• The cost incurred in services like implementation and migration is accounted for, here. This figure multiplied by the number of deals gives us the total cost of ‘Professional Services’. Subscription revenue roughly shows you the revenue that can be recognized for that month.
• The last part of this report keeps track of the number of your customers. Like your ARR, we arrive at the customer count for a month by adding new customers and accounting for logo churn.

P&L Statement:

• The first section records income from two streams – Subscriptions and Professional Services. Here, we have broadly categorized our expenses into these categories. 
• The first expense category can be called cost of revenue – which is the cost we incur to support our existing customers. So under this, we have hosting expenses, customer support, and Professional Services. Together, they’re also known as Cost of Goods Sold ( COGS).
• These figures give us the gross profit and profit margin. 
• The next category maps out operating expenses – which is the cost of acquiring new business, developing the product, and keeping the company running. Here we have R&D, sales and marketing, and general and administrative expenses. Each of these expenses has an employee component and a non-employee component.
• Details of employee costs (salaries) and non-employee costs (benefits and tech infrastructure) can be entered in the respective sheets.
• The percentage of revenue taken by each of these expense categories, also called the efficiency ratio, is calculated to understand the impact of these costs.
• The last section takes the interest expense and tax payable into account to give us the net profit or loss. The interest expense represents the interest payable on any borrowed funds and the tax amount due typically depends on your geographical location.

Who is This T emplate  For?

Well, this template can be used by early-stage SaaS and well-established businesses alike. Finance leaders such as CFOs or financial controllers can make use of this template to draw valuable inputs while strategizing for a business plan or even while projecting growth to stakeholders during fundraising.

Is this template useful? Yes. But is it scalable for SaaS businesses with high growth rates? Not so much.

Excel  T emplates are Great, But…

With growth, come complexities. As you scale, your SaaS might offer multiple product lines, expand to multiple geographies, and experiment with different pricing models.

A single-sheet financial forecast can no longer catch up with your growth ambition. Our SaaS Finance Ops Maturity Model clearly outlines the indicators that you may be outgrowing your tech stack and what you need to upgrade to prepare for the next stage of growth. Declining efficiency in your acquisition channels, increasing revenue churn , compounding manual errors, and rising costs of expansion are all indicators that your tech stack needs a change.

That said, you need not sacrifice your agility at the cost of sophistication. And that’s why you need a scalable revenue infrastructure like Chargebee that lets you stay nimble as a startup while you soar new heights to achieve enterprise-like sophistication.

Closing Notes

Setting up a fully functional financial model for SaaS is not easy, but this excel template will help you get all the necessary outputs required for you to make sound decisions. However, spreadsheets are not scalable as you grow rapidly, and you must evolve your tech stack to match your ambition.

Chargebee’s RevenueStory gives you the reporting capabilities that match your growth aspirations. Check it out here !

RELATED BLOGS

Nupura Ughade is a dedicated B2B SaaS marketing professional and subscription industry enthusiast. With a focus on content marketing, Nupura excels at crafting persona-specific content journeys that drive results. Her expertise is a valuable asset in the ever-evolving world of SaaS marketing.

How to Start a Successful SaaS Company

Candice Landau

33 min. read

Updated March 19, 2024

Free Download:  Sample SaaS Business Plan Template

If you’re interested in starting a software as a service (SaaS) business, you’ll want to start by outlining your needs. If you’re unsure of what you’ll need to launch and want an idea of what entrepreneurs in this industry do, then you’re in the right place.

I interviewed SaaS entrepreneurs from all over the world, including our own COO Noah Parsons, who has been a key figure in the making of LivePlan, our own SaaS product. With these insights we’ll dive into 10 steps you’ll need to take to plan, launch, and grow a successful SaaS company. 

• What is a software as a service company?

Let’s start by defining what exactly a SaaS company is. SaaS (software as a service) means that users access the software through their internet browser or a web-based app. The software maker hosts their product on their own servers, which is why SaaS products are sometimes referred to as a “hosted solution” or “web-based solution.”

It’s also common to hear SaaS products talked about as “cloud-based” solutions. In contrast, a desktop-based model is where an individual or company would install software on their computers and run it on their own servers. For your own business, you’ll need to be able to quickly explain this general benefit and elevate it with the value proposition of your specific solution.

• Can you start a SaaS company without technical expertise?

If you have an idea for a software as a service business, but you don’t have the technical expertise to build your app yourself, it’s still possible to run a successful business. In his book “ Lost and Founder ,” Rand Fishkin talks about his journey as a non-technical CEO of Moz, a service company he founded and transformed into a SaaS company.

He emphasizes how important it was for him to learn (and keep learning) enough about the technical aspects of his business so that he was able to make good hires and understand technical roadblocks when they surfaced. And it’s not completely impossible to learn to code yourself — but it does take time.

Be mindful of your intellectual property — the code — whether you bring on an employee or outsource the technical work. A good contract can go a long way.

• 10 steps to start a software as a service company

1. Develop a solution for a problem

Before diving into pricing, branding, or building a team, it’s important to make sure you have a clear problem to address and a solution that alleviates it. After all, if you’re not solving a problem, you don’t have a business. 

There are different ways to go about finding a problem worth solving. Here’s what others have to say:

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Fix a problem better than anyone else

“If you can fix a problem for someone and do it better, quicker, and/or cheaper than your competitor, you’re off to a good start.” — Gabriel Kuperman, founder, and CEO of CuePin.

Solve a problem you can relate to

“The number one rule for any SaaS business should be to solve your own, real problems and not someone else’s problems. Only by solving a problem, you have struggled with yourself will you fully appreciate how to solve the problem in the best possible way.” — Uwe Dreissigacker, founder and CEO of InvoiceBerry.

Use your knowledge of an industry to solve a problem

“I had industry experience and knew that there was a big void to be filled for small and medium-sized businesses that could not afford to pay for local servers and an IT team. We created UpKeep to fill this void—a cloud-based solution that was affordable for any size business.” — Ryan Chan, founder of UpKeep.

2. Write up a lean plan

There’s no way to get around it, you’ll need a business plan. But instead of sitting down to write a 40-page plan, start with a one-page pitch.

It’s the fastest way to get your idea onto paper, and it’s the very first step in the lean planning process, which is much easier and more iterative than traditional planning methods. It’s also more suitable for SaaS businesses that are constantly testing new ideas.

Your pitch is going to roughly cover your strategy (what you’re going to do), your tactics (how you’re going to do it), your business model (how you will make money), and your schedule (who is doing what and when).

If you’d prefer to work through the lean plan on your own, you can either use our free business pitch template or read our guide on how to build your pitch. Regardless of the method you choose, here’s what you’ll want to cover:

In the strategy section you will want to include:

• A one or two-line description of your business— your unique value proposition.
• A description of the problem you’re solving for your customers, and your solution to the problem, which is usually your product or service.
• A description of your target market or the different market segments you’re targeting.
• Your competition, and a brief description of how you differ from them.

In the tactics section, list your sales channels and describe how you will be selling your products. You’ll also want to list out marketing activities that will drive customers to your door. List key partners and resources you will need, and then list your core team as well as their roles. If you don’t yet have a team yet, list the roles you need to hire for.

The business model

While it’s useful to be able to have a sales forecast and expense budget early on, it’s not something you need until you’ve validated your idea. At this stage, simply list what you think your primary revenue streams and your key expenses are. Later you will want to come back and create a proper sales forecast, cash flow forecast, and expense budget. In this section, you really just want to document how your business will make money.

In this section, you’re going to outline your action plan for moving forward with building your business. Your action plan will include a schedule of tasks or milestones . These will be mapped onto dates, responsibilities, and budgets so that you hold yourself accountable. Given the iterative nature of planning a business, you will likely come back to your action plan and add more steps as you go.

Once you’ve got your ideas in one place and a clearly defined problem and solution, you’re ready to move on to phase three—validating your idea.

3. Validate your SaaS idea

Now you’ve spent some time creating your lean plan, which is essentially a list of assumptions. In this step, you’re going to find out whether those assumptions are true or false. And then adjust your plan so that it addresses what you’ve learned. 

You’ll do this by attempting to answer the following question — Can my idea make money?

Instead of rushing headlong into your first and favorite idea, this step acts as a check. It will help you determine whether or not you have a good idea that can be turned into a viable business.

Talk to your customers

The best way to do this is to get out and talk to your potential customers.

One of the biggest mistakes companies make is doing mostly secondary market research, instead of primary research (getting out of the building to talk to people face-to-face). But here’s the thing, you can also do this digitally and get similar feedback. It can be as easy as launching a coming soon website , running search ads or even launching a kickstarter to see if you gain any traction.

The important thing is that you are getting real-world feedback and setting parameters for success to determine if your idea has merit.

Gene Caballero, co-founder of GreenPal, validated his idea by getting out and speaking with random people. “We went door to door and even rented a kiosk in the mall to get feedback to see if people would use a product like ours. It’s a very humbling process.”

Through talking to people in real life, you want to learn:

• Have I identified a problem they actually have?
• Do I have a solution that solves their problem, whatever it is?
• What is the best way to sell to them, and what’s the worst way to sell to them?
• What would they pay for my product or service? Have I priced it too low or too high?
• What products do they currently use to solve their problem?

Based on what you learn, you may find you need to go back to your lean plan and revise it or refine it. You may even need to consider another idea if you find there’s no real market for your initial idea.

Conduct a competitive analysis

Beyond knowing your customers really well, it’s also important to know your competitors. The presence of competitors in your market is actually a good thing. It means a problem has in fact been identified. The trick then is figuring out what part of your competitors’ solution is inadequate. What do customers want that they don’t currently get?

Noah Parsons, COO of Palo Alto Software, says, “LivePlan’s competition is often Word and Excel. We know that Word and Excel are time-consuming, error-prone, and offer no help and resources. Our solution, an automated business planning tool, helps eliminate those pains for customers.”

Keep in mind that your competitors may not be immediately obvious. The industry your entering may simply have very disparate companies currently providing services. Be sure that you take the time to explore and understand how customers and competitors solve the problem you’re addressing and look for a way in from there.

Create your minimum viable product

Another great, and somewhat necessary testing method in the SaaS space, is creating a minimum viable product or MVP. This is the simplest version of your product.

It’s a particularly popular strategy in the world of product development and is used to quickly and quantitatively test a product or a product feature. Eric Ries, a Silicon Valley entrepreneur and author of The Lean Startup, popularized this strategy for web applications.

Eric says, “The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

If you can get an early prototype built, all the better. If you don’t yet have the resources to do so, you can still create an MVP.

Noah Parsons says, “Start with cheap mockups, wireframes, or even sketches on paper to make sure that your customers are going to want what you build.”

Besides software prototypes, MVPs come in many flavors, including:

• Explainer videos
• Landing pages

An MVP is a great way to save time and money before you go ahead and build anything, so take the time to make one and run it by your potential customers.

4. Explore pricing models and initial customer acquisition

SaaS products often use a subscription-based pricing model. So instead of paying once for a lifetime of use, your customer pays on an ongoing basis — usually monthly or annually. You can think of it as a software license.

It’s a popular model because of the increased potential lifetime value of each customer. Instead of a flat lifetime value — like $120 for the single sale opportunity you have with each customer or user, you might charge $10 a month per user for as long as your customer uses your service. The longer they stick around, the higher their lifetime value.

You likely spent some time modeling different subscription-based sales forecast scenarios during the creation of your lean plan. It hopefully gave you a rough idea of how reducing churn (the number of canceled subscribers) and other variables can affect your path to profitability. But now it’s time to officially establish a pricing model.

Test to find the right price

Growing SaaS companies are always testing their pricing models. You need to be willing to shift your pricing to fit what your customers are willing to pay. And in a crowded industry, you’ll likely need to be ok with offering your services, even if they’re better, for far less when starting out.

If you’re not sure where to start with your pricing, start with your competition. For Uwe Dreissigacker, founder and CEO of InvoiceBerry, looking into the competition was a good way to figure out how to price the company’s services. “Once you identified your competitors you can determine the lowest, highest, and average price your competitors charge for their services in order to determine a good starting point for your pricing.”

Your pricing model should be something you’re considering and testing during the validation phase, but you may need to treat that element of testing separately. A separate strategy, separate customer acquisition funnel, and separate goals you’re hoping to accomplish. Now there are a lot of different ways to get customers in the door to kick the tires, from offering free trials, to freemium services with upgrade options. You can check out the Bplans guide to SaaS pricing models for more on how to get started.

5. Establish your brand

If you’re looking to stand out in an already-crowded marketplace or simply be a memorable company, figuring out how to brand and differentiate yourself is key. You may want to pull from the competitor research you did above to help position yourself.

This isn’t a process you have to outsource to a brand agency — it’s one that can begin in-house. In fact, we’ve got a hands-on guide to building a brand right here on Bplans. You can also leverage tools like Canva to workshop designs, brand colors, and logos with little to no design knowledge. But before you start putting together mockups, here are a few branding elements you’ll need to consider. 

Brand to stand out

For UpKeep founder Ryan Chan, spending some time on the branding process helped set his company apart from the competition. “There are a lot of competitors in this space, many with much more money than us. However, we have been able to differentiate [ourselves] and also excel by making enterprise software fun and enjoyable. Our biggest differentiator has really been our design, from the ease of use to our playful tone.”

If you want to learn more about how to develop your own unique tone of voice, check out this article by branding expert Elicia Putnam.

Brand to clarify your vision

Branding isn’t only a design-oriented initiative. In fact, it can be used to get everyone on board and ensure messaging is consistent. GreenPal co-founder Gene Caballero says it’s a great way to get buy-in from partners, “In our case, we had to make sure that our vendors knew our vision and that we had a plan to execute.”

If you’re working closely with partners who are helping you distribute your product, it’s especially important to make sure they understand who you are, how you speak, and who you serve. If you don’t have a brand guide , it may be worth putting one together. This will make mixed messaging much less likely, and make it that much easier for your partners to help you spread your message.

The importance of a domain name

For Gabriel Kuperman, founder and CEO of CuePin, finding a good domain name was a key part of his branding strategy. Gabriel says, “With an online SaaS business, it starts with a powerful domain. I recommend sticking with a short .com domain that’s easy to spell and [that is] memorable.”

If you find the domain name you want is taken, Gabriel suggests turning to a domain marketplace that sells premium domains. He says, “Spending a few thousand on a domain could make a big difference long term, and give you the credibility and advantage over the competition, especially in the very beginning and early stages of the business.”

6. Make it legal

While you don’t need any qualifications to build software, you may need to comply with the industry you’re looking to serve. Be sure to look into that industry’s specific rules and regulations, as well as legally set up your company including the following elements.

Choose your business structure

One of the only things you’ll need to do in order to be legally in business is to choose and register your business structure.

In terms of the best business structure, it really depends on your needs. For GreenPal, Gene Caballero says, “We knew that if we ever wanted to be looked at seriously by venture capitalists, we would need to be a C-Corp in Delaware.”

In fact, GreenPal wasn’t the only one that figured it was best to go for a Delaware-based C-Corp. Ryan Chan, founder at UpKeep said, “We created an LLC at first, but after realizing that we wanted to take on venture capital, we decided to move to a Delaware C corp.”

You can read more about setting up a C-Corp in Delaware here; it’s a particular favorite for technology startups, and there are plenty of reasons why:

• The ability to incorporate without needing to reside in the U.S., or even be a U.S. resident. Establishing a U.S. presence via a Delaware-based C-Corp also gives non-U.S. residents access to U.S. resources such as U.S. venture capital.
• Delaware’s corporation law is known to be favorable to owners and is considered more flexible and certain than in most other states.
• Delaware permits a single-member board of directors.
• Delaware does not require the Secretary of State to review and approve filings before they are effective.
• Delaware law gives preferred stock investors of a corporation certain voting rights and control over the corporation.

Pick a name for your business

You can’t register your business until you’ve given it a name. This is a part of the startup process you may actually enjoy. Ideally, you would have run your ideas by your potential target market first, but if not, there’s still time to figure out what will resonate with them.

Noah Parsons and the team at Palo Alto Software chose “LivePlan” as the name for their business planning product because they wanted the name to reinforce the nature of the product. Noah says, “We wanted a name that would resonate with our customers, help explain what we do, and reinforce the nature of ongoing use.”

If you’re no good at coming up with names on your own, try a business name brainstorming tool. There are plenty to choose from!

Also, be sure to read our guide on how to register your business name . You need to be sure it’s not already taken, close to another company name, or even just confirm that the website and social channel handles are still available.

7. Financing and funding

How do you get the funds to start your business? There are multiple solutions to this problem. You could bootstrap your startup and do most of the tough legwork on your own . You could also go for a larger sum of capital right from the start by pitching an angel investor or a venture capitalist for funding. And, if all else fails, what about asking friends and family to help out?

On the one hand, bootstrapping your business gives you much more control over it. You get to call all the shots, including how you want to operate the business and who you want to be involved with. On the other hand, it’s a slow process.

On the flip side, getting the right investors on board from the beginning can expedite both your learning and your go-to-market strategy. You might also get immediate access to channels that might have otherwise taken years to break into. But, you’ll give up some control of your company the moment you bring on outside investors.

Circle back and create a more detailed forecast

Before deciding on which funding and investment routes you’ll pursue, the best thing you can do is develop a more detailed financial forecast. The reason we advised holding off on creating a detailed forecast until now was that you hadn’t yet validated your pricing or your market and hadn’t fully explored startup costs.

What if you’d found out your customers wouldn’t be open to paying your initial price? Or, what if you’d learned you were charging much less than people were willing to pay? Your forecast would have been for nothing.

But if you’re planning on seeking out a loan, pitching your company to investors, or even self-fund, a detailed forecast is necessary. For investors and funding organizations, having a thorough and well-thought-out forecast can improve your chances of actually getting funded. For your own use, it acts as a management tool that can help you better understand the health of your business, set milestones, and guide decision making.

A few resources you may want to check out include:

• How to Forecast Your Sales
• A Complete Guide to Forecasting Sales for Your Monthly Subscription Business

According to Noah Parsons, “Without a real sales forecast and budget, you have no idea how much money you’re going to need to get your business off the ground. After all, with a subscription business, you’re only going to get a small payment every month from each customer, and you don’t know how long customers are going to subscribe, so you have to constantly update your forecast as you learn more about your customers. This forecast will help you predict how much cash you’re going to need to fund your growth.”

Sales forecasting isn’t impossible, or even all that difficult. Anyone can do it so long as they know their customers and their market. The great thing about the sales forecast is that it will really help you, and investors, answer that central question — Can my business really be a business?

Once you’ve done your forecast, don’t forget to go back and update your lean plan. You will do this throughout the life of your business, so get used to it and enjoy it.

Do it yourself

If you have the ability and the passion to do the work yourself, you can save yourself a lot of money. Joe Kindness, co-founder at Agency Analytics, says, 

“Since Blake and I were both developers (and still are), we were able to create this company without any funding or additional resources. We set a goal to be profitable within one year and if that did not happen, we would move on. After about a six-month development cycle, we launched a beta version in July 2010, and three months later, started earning revenue that grew each month. The real motivation in all this was passion. Sure it was great (and essential) to be validated with revenue, but ultimately we enjoyed what we were creating so much that it resulted in a very nice product.”

If you can use your own savings or get a small bank loan, or even fund yourself via a third-party platform, you can avoid taking on too much risk. Gabriel Kuperman, CEO of CuePin, says, “Try testing an idea with a small budget that you can obtain through your own savings, a small bank loan, or even a Kickstarter campaign. Bringing in investors too early, before proof of concept is hard and may be unnecessary. You might also be giving investors too much equity early on, as the risk is extremely high for them in the beginning stages of growing a SaaS company.”

Taking the slow and careful approach can also save you from making some costly mistakes, says David Batchelor, President, and co-founder of DialMyCalls. “[Doing this] helps you really learn and get a feel for your industry, and lets you make mistakes on a smaller scale. It’s not as sexy as getting a big VC investment upfront and takes a bit longer, but at the end of the day, it has been much more rewarding for us to build it with our own capital.”

Seek out venture capital funding

In the event that you’re seriously thinking about pitching for VC funding (scary statistics aside), it’s useful to know a bit more about what venture capitalists are looking for. You can start by reading a few (or all) of these 17 venture capital blogs, reading Tim Berry’s thoughts on what venture capital firms want, and his advice on finding venture funding.

Even though Konstantinos Bratanis, co-founder and CTO of Goodvidio, and his partner started the business with their own hard-earned money, they were able to eventually raise VC funding. The great thing about raising money after they’d already started was that they’d had time to validate their idea and start building a team of good employees.

Konstantinos says, “As we were validating the value of our solution and recruiting early adopters, we started talking to a few VC firms. At the time, we didn’t have a sales pipeline yet or revenues coming into the firm. What encouraged us, was learning that at such an early stage VCs are more interested in the people behind the new company and their potential to build a viable business. They have modest expectations when it comes to cold hard sales and revenue numbers, so they want to see that there is a healthy team spirit behind the wheel that has the potential to reach growth. They want to see commitment, drive, vision, and hard work. Thanks to a combination of these traits we were able to secure a first-round of six-figure VC funding, which gave us a jump-start to start developing our sales and marketing channels.”

Just be sure that when you approach investors that you have your updated business plan, financial documents , and a refined pitch deck ready to go. These will help you prepare and give investors more holistic documentation to reference as you pitch your business.

8. Build your product

In this section, we’re briefly going to cover some of the things that are worth keeping in mind as you build your product.

Start as soon as possible

Noah Parsons says, “Start collecting contact information for interested, prospective customers. Develop a landing page, do some lightweight advertising, and generally reach out to as many potential customers as you can.”

In fact, you can even set up the landing page before you’ve finished building the product. Gleam.io has some great growth hacking strategies on their site; use these to give you that early boost.

Start small

Gabriel Kuperman, CEO of CuePin, also stresses the importance of starting small. 

“When starting our SaaS company, we set out to create and develop the most important features for our launch. As we went through development, we began to accumulate many other ideas for features—both internally and through users who were testing our app. When you’re working with a shoestring budget, you want to release your app, get some real feedback from your targeted audience, and have some funds left over for marketing.”

Use a development methodology

Noah says, “Agile is what most software companies use. Estimate what it’s going to take to get to a working alpha or MVP.” You can learn more about the agile development methodology on Version One’s site.

Keep core development in-house

According to Dharmesh Shah, outsourcing core product development is something most startups shouldn’t try doing as there are many risks involved. And Buffer’s CEO Joel Gascoigne believes much the same thing; according to him, a freelancer’s goals are entirely different to your own. They’re not invested in the product like you are, or perhaps like someone with a stake in the business might be. Plus, they’ll be more likely to think about limiting the scope of the project to the allotted time or budget. I highly recommending checking out Joel’s article as he also gives some actionable tips on what to do instead of outsourcing the development process.

However, if you have the option of working and hiring remotely (not necessarily freelancing or outsourcing), do it. Noah Parsons says, “Skip the expense of an office if you can, but invest in great collaboration tools. For example, Buffer, a successful social media company, just closed their only office. There are benefits to in-person collaboration, but unless you can get space very inexpensively, focus on developing your product first. Offices can be very expensive and add little value.”

At Palo Alto Software, we rely on tools like Slack, Trello, Basecamp, and Jira to keep us all abreast of what is going on in the company.

9. Develop your go-to-market strategy

There are many ways to market a SaaS product — from paid advertising and affiliate partnerships, through active outreach to media outlets, and content marketing. Experimenting with a combination of these methods is a good idea. Pay attention to what works and be aware that it may change over time.

Do your own PR

Whether or not you’ve got the budget, doing your own PR to start with is a good idea. After all, who knows your business better than you?

“The media is always looking for new content to write about,” says Gene Caballero. “Just ask. We sent press releases to all of the cities that we launched in and easily got press in all of them.” Start building up a list of writers and journalists interested in news you may have to share, that you can reach out to. Use Twitter’s advanced search feature, and sites like Contently to find people who may be a good fit.

Participate in online communities

You can also spend some time participating in relevant online communities. Noah Parsons says, “Become an expert. Start participating in relevant discussion groups, comment on relevant blog posts, and start your own blog. You can get a little initial lift through sites like ProductHunt. Otherwise, it really depends on your industry. Figure out where your prospective customers hang out online and work to get coverage in those locations.”

Konstantinos Bratanis, co-founder of Goodvidio, offers much the same advice. He says, “When you start your SaaS business, you’re hit with a cold hard truth that you’re just a spec of dust in the universe of fast-paced tech and innovative ideas. Nobody knows your company’s name or what you do, especially if you’re providing a solution that is very new for your market. So, your first task is to get your name out there.”

For Goodvidio, this meant starting with a local community. Konstantinos says, “Since our market is online retailers, we approached our local eCommerce association and started interacting with the community. We asked for feedback about our software and our growth ideas and took part in the conversation. Taking part in the daily life of the community and learning how the ecosystem worked paid off because we started getting referrals, word-of-mouth, and endorsement from community leaders. That’s a good approach to meet early adopters and people who will be willing to work with you. This helped us get traction in the first year of business.”

Go the content route

Today, it’s particularly important for SaaS companies to do content marketing, and it’s even relatively affordable. Content marketing, as defined by the Content Marketing Institute, is “the marketing and business process for creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience — with the objective of driving profitable customer action.” It’s a marketing strategy that has seen immense growth over the past decade.

Noah says, “Find your prospects and work to help solve their problems. Use content marketing to share your knowledge on a topic and attract prospects that way.”

It’s relatively easy to get started doing content marketing by simply maintaining a company blog your target audience will find useful and interesting.

CEO Uwe Dreissigacker says, “SaaS companies should definitely operate their own blog. We blog at https://blog.invoiceberry.com, in case you want to pop by and read about small business and freelancing. It is also useful to get listed on all the big SaaS directories early on in order to get websites linking to your product and to receive initial product feedback. Producthunt.com is a great resource for viral marketing for the product launch as well as community feedback.”

That’s two votes for Product Hunt from two separate entrepreneurs. It’s not hard to see why, especially as it surfaces cool new products on a daily basis. Be sure to check it out.

Do a bit of everything

How will you know what works for you, unless you try it? Online, there are so many different ways to do your marketing and it’s simply not feasible, especially when you’re just getting started, to do them all. You have to try them, see how they go, and then pick the best performing of the lot.

“In terms of marketing, you should try to stretch your budget to a few different advertising channels. Putting all your eggs in one basket is not ideal,” says Gabriel Kuperman, CEO at CuePin. “This way, you can see which marketing channel gives you the most value. Make sure you’re tracking ‘conversions’ so you can see which marketing channel has the best conversion rate. A good online campaign should include paid search engine advertising, social media advertising, email marketing, and a PR campaign.”

Don’t forget real-life products

Don’t forget the value of using real-life products to market your business. Yes, even for a SaaS company. Many SaaS companies send stickers, or small “thank you” present to their best or most loyal customers, and many if not most founders and key team members have business cards. 

Start with beta testing

Yet another great way to get started doing marketing is to launch a beta product. It’s also a good way to learn before the real thing is out there. Gabriel says, “Create a beta version of your app or software and get it released when it’s fully-functioning and bug-free. I’ve seen too many SaaS companies delay their launch because they continuously add features that they ‘want’ before they can release the first version. My advice is to get it to market when it’s in a usable and respectable form and let your beta users give you feedback and help shape the future of the software.”

10. Establish metrics for success

Whether or not you consider yourself a fan of numbers, if you run a business, you’re going to have to get used to looking at them.

For many people, tracking metrics can seem scary, boring, or time-consuming. But the truth is, these numbers are going to become your best friends. They’re going to help you make informed decisions, which will in turn take a lot of the weight of guesswork off your shoulders. Tracking your key metrics will also help you figure out how to grow, and whether or not it’s a good time to do so.

We use LivePlan’s Dashboard feature to keep track of our own metrics.

The benefits of tracking key metrics

In order to monitor your business’s health, it’s essential to understand what these metrics can tell you about your business. It’s also imperative that you monitor how these metrics are performing on a regular basis so that you can make better decisions and plan proactively for the future.

A few of the benefits of tracking your metrics include:

• Improving your current performance
• Improving future performance
• Catching things before they become problems
• Getting real feedback related to your goals and milestones
• Making decisions with more confidence

For those business owners who don’t keep an eye on the numbers, the statistics are not pretty. According to the SBA, 28 percent of businesses fail due to problems with the financial structure of their company, including keeping poor accounting records. If you don’t keep these records, or have a system in place that allows you to monitor them, you could run into problems.

The benefits of regular plan review meetings

At Palo Alto Software, we review our metrics in monthly plan review meetings. These meetings don’t take more than an hour, but they do provide insight into what is going on in the company. We use these meetings to ensure that we’re on track and in line to meet our goals. If we’re not, or something else has come up, we adjust our plan.

Here’s a brief summary:

1. We take some time to review the overarching numbers. How did we do compared to our forecast? How did we do compared to last month? Last year?

2. Review major milestones. Did you meet them? If not, how should they be adjusted?

3. Review long-range goals and strategy. Are you still on track to meet these goals? You may need to revise your long-term strategy based on the trends you notice in your numbers.

In order for your monthly plan review meeting to be successful, make sure to put it on your calendar, follow a repeatable agenda (so that everyone knows what is up for discussion), and be prepared to change your plan. These meetings aren’t about sticking to the plan if it no longer works, but rather about adjust the plan based on what the numbers reveal.

• Starting a SaaS business takes time

While the startup process for a SaaS business can be condensed down to these 10 steps, each component will take time, testing, and refinement. You may even find consistent overlap between steps that have you complete specific elements in a completely different order. Funding, for example, may be something your startup doesn’t seek out until years after you’ve launched, and developing your business plan will be a constant process you revisit throughout the life of your business.

If you take away anything from this guide, just know that the most important thing for a SaaS startup is to get your product out there. As long as you have a working plan, metrics to track success, and a willingness to iterate, the more likely your business will survive and stand a chance against the competition.

Candice Landau is a marketing consultant with a background in web design and copywriting. She specializes in content strategy, copywriting, website design, and digital marketing for a wide-range of clients including digital marketing agencies and nonprofits.

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5 Roadmap Templates for SaaS Businesses

Roadmaps are a unique tool for creating and maintaining stakeholder alignment, resource planning, and budgeting purposes. But what happens when you’re managing a product that is being continually updated?

This is the situation for countless SaaS product management professionals lucky enough to manage products via this model. When the only things standing between you and your customers seeing an update is deciding to push code to production, things can get fast and furious in a hurry.

Roadmaps can help reign in the chaos that might erupt when there are fewer barriers between coders and consumers. They can get everyone on the same page, carve out some boundaries, and focus on the big picture versus the daily grind.

Of course, not every roadmap is well suited for a SaaS operation, so we’ve selected five very different types of roadmap templates that can play a critical role in keeping a SaaS product’s house in order despite the non-stop pace of product development.

1. Product roadmap

The product roadmap is (or should be) the foundation upon which all other plans are laid. It is where the product vision is translated into a plan for execution. And it’s the ideal tool for getting the entire organization to understand and buy into the strategy the team has selected to make that vision a reality.

Traditional product roadmaps document the sequential order of features and enhancements and when they’re scheduled for delivery. Think “Single-Sign-On” in February or “Drag-and-Drop Editor” in Q2.

This approach emphasizes specific features and dates, which can obscure the product strategy ’s big picture goals. It also highlights individual items and particular dates, which many stakeholders (particularly salespeople and customers) can get very attached to. This limits the ability to adjust things over time as expectations have already been laid.

Basing a product roadmap on themes is an alternative to this model that allows for more flexibility during the implementation phase while reframing the conversation around strategy and outcomes versus a specific functionality checklist. Laying out a plan to “Improve Onboarding” before “Streamlining Checkout” shifts the spotlight to the significant picture objectives for the product, which is what matters, while avoiding the trap of committing to deliverables that may no longer make sense in a few months or years.

Without a reliable product roadmap, every other well-intended plan (or roadmap) is likely based on faulty assumptions or bad intelligence. So don’t pass Go, and don’t collect $200 until you’ve got your product roadmap locked down.

2. Product development roadmap

If there’s one roadmap SaaS businesses should use that is chock full of details and specifics, it’s a product development roadmap . Here is where each sprint’s target items are laid out, using swimlanes to denote which teams are working on what.

Because this roadmap is so detailed, it also has the shortest time horizon of them all, typically only spanning a couple of months. That’s because forecasting anything beyond that with this level of detail is a fool’s errand given the dynamic nature of the business and the emphasis on reacting to the latest data and opportunities.

The audience for this roadmap is primarily the teams responsible for delivering the projects it contains. It should definitely be limited on a need-to-know basis versus widely circulated since most stakeholders outside this part of the organization really don’t need this granular view into what’s being worked on when.

The purpose of this roadmap is to ensure timely execution and synergy across the teams working on getting these projects shipped. It’s not intended to convey strategy or business objectives, just how things are going to happen once those are locked in for the coming sprints.

3. UX/UI roadmap

The user experience and user interface aspects of products don’t always get the respect and attention they deserve, but these activities actually start well in advance of product development and extend far beyond the release of the product. To fully grasp the scope of what’s included on a UX/UI roadmap , you must consider the three types of activities these teams are responsible for.

First, there’s user research, which is essential in understanding users, their challenges, and their desires. Without this information, any product roadmap is missing an essential ingredient, and these activities extend from the planning phases to prototype/alpha/beta testing and then evaluating how users are interacting with the “finished” product before repeating the cycle all over again.

Next comes the user experience perspective, which must account for how the product fits into the overall user workflow, which tasks they must complete, and how they might accomplish that. And finally, there’s the user interface, where the details of buttons, menus, page design and the like come into play, which will inform the product development team’s activities.

Calling out these chunks of work and phases of the project in a roadmap is beneficial in a few key ways. It identifies dependencies for downstream activities so things can be scheduled appropriately, plus it can be a huge help with resourcing, particularly when UX/UI staff work on multiple products. The roadmap also highlights just how important this work is and the breadth of its scope, since too often UX/UI is often misperceived as just “graphic design” work.

UX/UI roadmaps don’t need to extend as far as some of the other types, since their priorities and schedules are driven by what’s being prioritized and slotted by the product teams and when product development needs things to move forward. A six-month view is usually sufficient.

4. Quarterly release plan

In a perfect world, the product organization, product development, and the UX team would be left to their own devices and trusted to deliver the highest-value projects in a timely fashion. But since this is reality, people still want to know when things are going to happen.

Providing some visibility and clarity around dates while still not pinning anyone down to an exact date is a bit of a tightrope act, but a quarterly release plan is often enough to satisfy the curious, impatient masses without boxing the team into a corner by committing to anything too specific. It’s the perfect complement to a theme-based product roadmap.

The estimated times of arrival for key features, functionality, and initiatives are quite helpful for many parts of the organization, particularly the sales and marketing wing of the operation. With a ballpark of idea of when things are coming to market, the marketing team will know when they should start thinking about budget, positioning, and launch events, not to mention training up the sales team on value propositions and talking points.

Limiting commitments to quarters and still not listing out the exact features but rather general themes allows the product team to maintain flexibility. They can pivot based on the health of KPIs based on popular SaaS product metrics such as Monthly Recurring Revenue, churn, and Net Promoter Score while still offering up a relatively accurate preview of what’s to come.

5. Marketing strategy roadmap

The greatest product in the world isn’t going to make any noise if it doesn’t have a solid plan in place to take it to market and drum up interest. That’s why no product strategy is complete without including an accompanying marketing strategy.

With so many channels and opportunities to promote a product’s benefits and capabilities, marketing teams need a detailed plan of their own to execute a winning debut and a continued long tail of attention-grabbing, lead-generating tactics. To keep everything straight and synchronized, a marketing strategy roadmap puts it all in one concise view that can ensure flawless execution and keep other stakeholders informed.

Marketing strategy roadmaps also come in handy when plans for the product itself change. The knock-on effect of a delay or shifting priorities will inevitably impact the communication plan and messaging, so this visual tool can quickly identify what must adjust downstream in the marketing department.

Takeaways: Sharing and caring

No matter which roadmap template you use, how and when you share your roadmap is just as important as its contents. It’s also vital to remember that every roadmap isn’t well-suited for everyone , and they should be shared selectively and intentionally for maximum impact.

And, obviously, roadmaps are only helpful when their accurate, so product teams must make it a habit to update them all regularly to avoid teams and stakeholders operating using outdated information. Using a purpose-built roadmapping tool makes this much easier and ensures every roadmap is a real-time view of the latest and greatest information.

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How User Feedback Should Influence Your Product Roadmap

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Schedule a few minutes with us to share more about your product roadmapping goals and we'll tailor a demo to show you how easy it is to build strategic roadmaps, align behind customer needs, prioritize, and measure success.

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