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Before you embark on your SaaS journey, it is particularly important to have a well-defined business plan in place. There are various aspects of creating a strong business plan, following which will certainly yield desirable results. Creating a strong SaaS business plan is extremely crucial to ensuring the success and longevity of the business in the long run.
Planning is bringing the future into the present so that you can do something about it now.Alan Lakein
If you are planning on launching your software start-up or a new SaaS product, a proper business plan is the soul of it. You have to draft a perfect business plan, which will empower you to raise your company’s required funding. No matter how innovative your idea is, if you do not have a business plan in place, you just cannot execute your idea. So, without further ado, let us have a look at how conveniently you can come up with a good business plan. If you follow these simple rules, the complex idea of creating a business plan will eventually get clearer and more straightforward.
What is a SaaS business plan?
Your business plan is best defined as the blueprint of your company. When you have a start-up idea, it is not enough to inform the audience or the investors about what you plan to do. An elaborate business plan is required to explain to your investors and your target customers what your main goal is and how you will be achieving it.
Preparing a SaaS business plan is as essential for your investors as it is for you. The business plan you will create is written documentation of your every plan, strategy, target, strength, weakness, risk analysis, etc., for your business. Some of the fundamental questions that your SaaS business plan should answer are: –
- What is your idea?
- Why are you pursuing this business?
- Who are your target customers?
- How are you planning to make money?
- How will you create a strong customer base?
- How will you expand your business?
- How will you bring investors abroad?
- What is your revenue or business model?
- What will you do to expand the business?
- What is the timespan before the market reaches saturation?
So, when you are writing down a business plan, these are some of the questions you should answer. Every SaaS business plan should be written in a specific format. You might have a single page business plan or a scribbled plan at the back of your notepad, but if you want to impress the investors, you should look at what all you must include in the SaaS business plan.
What to include in your SaaS business plan?
The list of benefits of opting for the SaaS business model for software entrepreneurs is quite exhaustive. This is the reason that a large number of start-ups are leveraging this cloud technology for their business. But in order to succeed in the highly competitive SaaS space, you must have a carefully drafted business plan in place. Here are some of the essential elements that you must include in the SaaS business plan.
This part is more like an abstract for your research paper. This section briefs the audience about your company, what the goals are, why your company is valuable, etc. While writing your SaaS business plan, make the executive summary very catchy so that the investors are interested to know more.
The company description will provide a more elaborate idea of what your company is planning to do. It will give the audience a sense of direction that your company is moving towards.
Your SaaS business plan should vividly point out the main problem faced by your target audience. It is your responsibility to come up with a catchy phrase or tagline that will describe the issue your company is aiming to solve.
Right after you mention the problem statement, focus on how your SaaS product is the perfect solution to this crisis. This part of your business plan should be elegant and direct. Do not make it sound like you are struggling to establish a proper relationship between the solution and your SaaS product.
How does your product work?
In this part, give a brief about how your SaaS product will work. Draft a good product description along with an explanation of why it is better than other existing solutions in the market.
You should enlighten the investors about the following questions in this section.
- Who is your target customer, and who can be the potential customers?
- What is the size of the market, and if the market size is growing or almost reached saturation?
- What is the scope of your investors if they invest in your SaaS business?
Your business model comprises revenue and operating models. Here, you will answer questions like how will you earn money from your SaaS product, will you have a range of subscription models, how the prices will vary, what are the price of similar SaaS products in the market, how will you manage costs, etc.
This is one of the vital parts of a business plan, more importantly, SaaS business as your service can be consumed at a global level. Conduct thorough research and figure out strategies to convince your target audience or appeal to them to buy your product.
You should have a fixed amount in your mind that you need from the investors to make your SaaS business plan a big success. You have to explain how you plan to invest the money you will raise from funding and the investment agreements.
Speaking about your competitions is also very vital for your business plan. You have to let your investors know,
- How powerful your competitors are and how are you planning to beat them?
- How are you planning to use their weak spots for your advantages?
- What is the amount of risk the new start-ups in your domain possess for your business?
Extra something to consider
- While you are writing a business plan for your SaaS product, do not make it too long. Try to make your business plan a brief of 15-20 pages, or the chances of your investors going through all the pages reduce.
- No matter if you have a unique SaaS business idea or that you don’t have much competition, good research is mandatory. Try to learn everything about your market, potential expansion opportunities, your target customers, a time before it reaches saturation, etc.
- You can also use business planning tools and software like LivePlan or StartPad for a step-by-step business planning approach.
- Use data representation wherever needed to make your business plan more visually impactful.
An impactful SaaS business plan will go a long way in helping you achieve your desired results. Not only will you have a clear path in front of you, but you will also be able to impress the investors and stakeholders. So, make sure you do not rush through or overlook the importance of a SaaS business plan and allocate adequate time and resources.