Building SaaS for SMBs: 4 Things to Know

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Small businesses increasingly turn to Software-as-a-Service (SaaS) products to handle everything from bookkeeping to HR and project management. In light of that, creating SaaS solutions can provide tech pros with another opportunity to start their own technology company in an area where there’s real demand.

Of course, there’s always a “but,” and in this case it’s much the same as it is for traditional apps: building your business depends on a lot more than having the greatest technical solution. Yes, your engineering and development knowledge will be critical, but having effective marketing, sales and customer service is a bottom-line requirement for success.

Some tech pros have innate skill in at least some of these areas. Others will need a partner to handle them. Whatever your approach, creating, selling and supporting a small-business SaaS product requires you to face a number of challenges. As long as you’re prepared, you can certainly handle everything successfully. With that in mind, here are some of the critical things to consider as you make your plans.

Find a Need and Fill It

You can’t base your business on the fact your family thinks your solution is cool. The first thing to ask yourself is whether a real market need exists for your tool. Michael Fraser, president of Infinite Ops just outside Seattle, had spent years working in managed and cloud services when he recognized a need to automate and manage virtual workspaces. His company’s “IO Console” allows service providers to quickly deploy hosted desktops, virtualized apps, plugins and cloud resources.

By simplifying the task—deployment can be accomplished in about an hour with three clicks—Fraser dramatically streamlined the work involved in integrating a company’s cloud with the likes of Google Compute, Amazon’s AWS and Microsoft’s Azure. Software that actually fulfills a need is the bedrock of a potential business.

Timing Matters

Fraser had been working on Infinite Ops’s product for several years when he formerly organized the company in 2015 and launched the product earlier in 2016. He made the leap because he believed his product had the right level of maturity and there was demand for it in the channel. “I realized the channel was ready because people I knew and key players indicated they were ready for these features,” he said. “That quantified it for me.”

Remember: This is Business

The process of starting a business involves a process of conceiving and building a viable product, and also having a good idea of how you’ll market and promote it, suggests Bob Weber, president of Weblications, a hosting and development company in Princeton, N.J.: “It takes thought and research” from the very beginning.

Planning must encompass more than development and marketing, Weber noted. As with apps, many SaaS products require a fair amount of infrastructure to support them. “Let’s say you’re building an Uber for babysitters,” he said. “How will you qualify the babysitters? How will you pay them?” All of those details need to be worked out in advance, sometimes before you even start building the product.

“It comes down to having a good product, the right product, one that solves a problem. You don’t build products just to build products,” Fraser added. “Figure out the business side first. That includes things like packaging and pricing. You have to wear both hats, and you have to be an expert in the market you’re going into.”

Partners Can Be a Plus

Though many tech pros like to tackle projects on their own, that’s rarely possible when you’re talking about starting a business. While SaaS presents low barriers to entry, if you don’t have the necessary expertise in marketing, selling and supporting your product, you’re probably doomed from the start. “A mediocre product can succeed with the right market research and campaign,” Weber said. “Those are as important as the product itself.”

For many tech pros, the solution is to find partners who can take responsibility for the non-technical side of things. Whether those people will handle the finances, marketing or sales, do as much due diligence on them as you have on your market. While there’s a good chance you already know them, and maybe have even worked with them, be sure your skills and temperaments fit.

Weber has an additional suggestion: Even in this age of Skype and Dropbox, he believes partners should be within 50 miles of each other, or at least in the same time zone. “Face to face conversations are valuable,” he said.

However you decide to proceed, remember starting a SaaS-based business isn’t going to be easy. Still, “if you’re passionate, go for it,” Fraser said. “But look on it as a calculated risk. Don’t be oblivious to what you’re jumping into.”

Image Credit: Ellagrin/Shutterstock.com

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