Procrastinating Your SaaS Business Plan? Five Reasons to Get It Done!

Our latest article, “SaaS Business Plan Tips,” on Software Marketing Advisor is about SaaS business planning… how critically important having a solid business plan is for software-as-a-service providers.

You may ask: why should I write down a lengthy business plan? Sure, there are too many things to do already when you’re trying to start or grow a business, and often business planning does not seem as critical as the other urgent calls on your time.

SaaS companies should not make that mistake… Here’s a quick summary of the top 5 reasons why you need to write that SaaS business plan now:

  1. SaaS involves selling and delivering a standardized solution that solves a customer need broadly without too much expensive customization. Getting that right requires up-front planning: there’s little opportunity to customize during the sales cycle or during installation and still make money.
  2. SaaS usually requires more up-front capital than a more traditional software startup. That means investors are going to be looking more closely at that SaaS business plan and financial projections.
  3. Because it is newer, the SaaS business model is less proven, requiring more ongoing analysis and adjustment as the industry matures. It’s hard to determine which assumptions worked and which didn’t if you don’t write it down.
  4. One of the most important SaaS metrics is low customer acquisition costs. Without a SaaS business plan, it is too easy to over-invest in lead generation or focus on the wrong leads, leading to unsustainable marketing and sales costs.
  5. There is additional complexity to SaaS business metrics that necessitates an ongoing plan to forecast and track them reliably. It is not sufficient to simply forecast and track quarterly bookings, as with licensed software.

So stop procrastinating… and start writing your business plan! This SaaS business plan template can be a useful place to start.

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22 Responses to “Procrastinating Your SaaS Business Plan? Five Reasons to Get It Done!”


  1. 1 Sharon Wilson August 20, 2009 at 6:59 am

    Great post! As a Business and Life Coach, I always make sure that I teach my clients to write a business plan for something they really want. In this way, they will be able to move forward and see quick results because they have gained clarity.

  2. 2 jleescastro August 22, 2009 at 2:54 am

    Thanks for the comment, Sharon. You’re absolutely correct that a business plan is essential to get what you want out of any business… and often times it is the process of writing the business plan in the first place that allows you to gain that clarity into the business opportunity. My point is just that it’s even more true for SaaS ventures! Thanks,

    Joanna

  3. 3 Patricia September 12, 2009 at 1:20 am

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  4. 4 Canada Business Plans December 28, 2009 at 8:10 am

    Business plans should sell your idea. Be precise and to the point.

  5. 6 Gregory Despain April 24, 2010 at 7:53 am

    I totally agree with Barbara’s comment. Many thanks for discussing such an informative article with all of us. I’ve bookmarked your blog will come back for a re-read again. Keep up the excellent work.

  6. 7 Emma April 29, 2010 at 7:19 am

    It is good to see increasing numbers of articles on wise ways to approach SaaS, as this backs up our hope that SaaS is becoming more established and will continue to thrive. For anyone interested in reading about the advantages of using SaaS, I’ve written a blog: http://blog.bitzesty.com/saas-opening-up-new-opportunities-for-busines

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