Growing strong and successful software as a service (SaaS) business requires more than just having faith in your product and secured financing. Managing this type of business requires in-depth knowledge of the market, your business, and yourself. Taking it to the next level requires continually getting new customers and reducing the number of canceling customers. Meaning iterating and providing services that people want to use year after year so that you can grow.
However, in the ocean of information on achieving a successful and thriving SaaS business, frequently. Five basic approaches remain under the radar. In this article, we are taking a closer look at these often unnoticed, yet fundamental roads to achieving sustainable growth of your SaaS business.
Table of Contents
#1 Know Your Business Value
Every business owner should contemplate the question, “What is the true value of my business?” It is a vitally important question because the real value of your business has a significant impact on your current and future professional (and personal) perspectives. Frequently, the company itself is the owner’s most valuable asset. Knowing the real value of this asset gives you a realistic ground to plan your business’ future path- whether that be a business expansion, selling your company, retirement, or insurance cover.
The best way to get a good sense of your SaaS company valuation is to speak with a broker. Once you are aware of your company’s value, you can focus on making adequate plans and strategies for future growth.
#2 Create a Growth Plan
The difference between failed SaaS startups and successful SaaS companies is a robust development plan. Having a good one enables you to plan and track the growth and change in your business revenue. It allows you to be more efficient in making new income generated from normal business operations by focusing on the value that customers can see. Importantly it enables you to find more growth opportunities, avoid common mistakes, and differentiate yourself from your competition.
The essential thing is that your SaaS business growth plan needs to be strong, reliable, and help you scale your business. Indeed, no one knows your business better than you. Still, some moments in developing your business require critical thinking to make better decisions. For this reason, consider using strategic consulting services when preparing your growth plan. Having experienced consultants working with you can help you identify the best longer-term growth opportunities and create a roadmap for implementing the best business strategy to achieve your desired goals.
#3 Make Leadership Development a Key Priority
Making leadership development a key priority on every organizational level in your SaaS company can help you grow faster and reduce tension and conflict in the process. To increase your and your team’s leadership quotient, you need to work on a few vital leadership skills.
Inspire others, develop a vision-
As a leader, it is your job to inspire employees, investors, and customers. The best way to start doing it is by creating a compelling vision and sharing it with them.
Set specific goals-
A key role of a leader is to clarify what’s essential and what’s not. You need to classify all of the distractions and objectives and make it clear to your teammates what they need to focus on first and foremost.
Create engagement within the group-
Whatever you do, avoid micromanaging. Give your employees and colleagues space and freedom to figure out the best way to accomplish goals and complete tasks. Once your people see you trust them, they will do their best to stay engaged and successful in completing their projects.
Delegate and communicate effectively-
Delegating is a critical skill you need to master to be effective. Not grasping this skill will leave you stuck, overworked, and probably will hinder your advancement. Assess all of your work and tasks and sort them by importance and complexity. Keep your focus on highly critical and complex projects and delegate simple ones. However, do not underestimate your direct reports. Pay attention and also delegate meaningful tasks, so they feel challenged and eager to work. Importantly, communicate effectively with your team. Efficient and open communication is a powerful way to eliminate misunderstandings, encourage a healthy and peaceful work environment, and get work done quickly and professionally.
Everyone wants to grow and improve. Real leaders know they need to support the education and evolution of their team if they’re going to keep their people engaged and dedicated. So, set learning and development goals for your teammates to advance and add more value to the company. Meet with them regularly, review their progress, invest in them, or help them when they’re stuck.
Continuously sharpening yours and your team’s leadership skills will help you provide a vision for your business and motivate your employees to excel.
#4 Strike a Balance Between Users and Revenues
Growing a SaaS business might seem challenging in the beginning. Yet, as you advance, it will become easier to predict the growth of your business in terms of recurring revenue. Precisely for this reason, SaaS businesses are great to experiment with upfront plans to drive in cash by striking a balance between users and revenues. Many experts advise that you need to price your product based on your customer behavior and what they value, not based on perceived costs.
How do you do that?
Communicate with your paying customers and find out why they are spending their money on your SaaS product. Through using their feedback, you can discover a lot about your services and why they are valued, often in ways you did not imagine. Keep in mind that renewals determine your revenue. It can take several months or more, depending on your business, to recover the cost of acquiring new customers. When existing customers don’t renew their subscription, the revenue stream dries up, and the company collapses. That is why you need to offer your existing customers sustainability and reason to come back.
#5 Security is Paramount in Your Business
Every SaaS business has to deliver exceptional business-to-business (B2B) customer support and experience in one crucial area: security. The security of your SaaS application can make or break your business. Every day, your company accesses, analyzes, and manages your customer data. If you fail to keep these data safe, it will have a direct and lasting impact on your business. The best way to tackle this aspect is by ensuring that your IT team is informed of unique security issues relevant to each specific client. Further, by establishing security controls to manage customer support and client teams. And lastly, by performing regular security reviews and implementing robust security controls, data encryption and tokenization to protect data.