You have got an amazing SaaS business idea in mind, but not how sure how to go with it? Don’t worry; we will guide you step by step to get the winning plan. Before taking a deep dive into the business plan, we will explain what is meant by SaaS. SaaS stands for Software as a Service, which means the users can access the Software through the website based application or through the internet browser. In general, business plans give the complete walk-through of the whole business, such as your product or service and how it solves the problem your target audience is facing. The main steps in the business plan are:
Problem Statement: Before thinking about anything else, the business plan should clearly define the problem it is trying to solve and how big the target audience is for this problem. The solution can then be designed accordingly to solve this problem. The vision and mission statement is also aligned with the problem statement and its solution.
Traditional Vs. Lean Plan: Gone are the days of traditional plans where you had to write the notebook as your business plan. The current business models are iterative; they should mention your strategic goals and how you are planning to achieve them. As discussed above, the business should have a clear idea of the target market and its different segments; it should know the competitors and what its unique selling proposition is.
Idea Validation: Once you have defined the problem you want to solve and the addressable market, then the next step is to validate your idea. This can be done through strong market-based research, both primary and secondary. The team members can personally go and meet with their target audience or do the research digitally. It is crucial to get the real feedback and then refine the plan accordingly.
Competitor Analysis: After researching your potential customers, it is critical to know who the competitors are and their existing products or service. It is an excellent thing to note how your product or service is different from what they are offering. Along with that, it is important to see what their pricing model is and what they are charging from the customers.
Business Model: The business model is one of the crucial parts of any business plan. It gives the idea of how the business is going to make money. At this stage, all that is required is to have some estimate or forecast on what the sales, expenses, and major cash flows will be in the future.
Customer Acquisition Strategy: The product or the service will not do the magic unless your customers don’t know about it. Planning for the sales and marketing and how you will acquire the users is very important. There are different possible paths to get to your prospective customer, such as you can use the Google search engine, visit the trade shows and exhibitions, or maybe you can plan to shine on Instagram or the other advertising platforms. Whatever you decide to do, make sure you have a clear and well-crafted marketing plan with you explaining how much money will be spent on acquiring customers.
Team: No platform can be built without the right team to run that. A team with the correct skillset and experience can turn an idea into a successful business. The management team’s structure should be clear, and the gaps should be appropriately identified. The roles and responsibilities of different team members should be clearly defined.
Financial Plan: As also mentioned above in the business model, it is important to forecast its sales. The sales of the SaaS business is based on the subscription model. Hence, it is easier to predict how many customers will sign up or drop in each month. In calculating the sales forecast, the churn rate is important to note, which is how many customers are canceling the subscription each month. To have a sustainable business, the churn rate should be lower with a higher Lifetime Value (LTV) value, which should be more than the Customer Acquisition Cost (CAC).
We have discussed the SaaS Business Plan in detail above as what is meant by SaaS and what the critical components of a SaaS business plan are. We started by explaining the problem statement, how important it is to validate the idea in the market, and the significance of competitor analysis. Another critical component of the business plan discussed in the business model or the financial plan is how it will make money and acquire customers. Hence, the business plan is a very good indicative document for both the chief executive officer and the investors in getting the complete snapshot of the business.