Software as a service companies are an emerging trend within business that enables consumers to have access the same software capabilities delivered by manufactured products, with a zero risk for piracy, low marginal distribution cost, and ongoing update capabilities. The SaaS market is ripe with investment capital due to the sector’s high margins and low holding period, allowing limited partners a quick return on their investment within the five year holding target. This makes business plans for SaaS companies in high demand, but still important to communicate the unique positioning of the software in the market and how it delivers value for the customer.
Pro Business Plans helps entrepreneurs to develop SaaS business plans that communicate the key points investors look for when considering to place their funds in a company. This often entails a strong management team with a good background of previous exits, a good business model that is both scalable and has the ability to generate revenue, and has a competitive edge. These elements are often intrinsic to the business, but a good business plan for a SaaS company succeeds in clearly communicating the exact value points that investors are looking for.
Many Software as a Service firms seek to raise money from venture capitalists or angel investors in order to successfully scale their platform. Angels may make early round injections of amounts below $1.0 M applied towards product development and enabling the preparation for commercialization. Companies that are prepared to enter the commercialization and scaling phase often require substantially more capital of well over $1.0 M, which is typically requested by venture capitalists. More venture firms dealing with SaaS companies require a business plan at some point in the due diligence process.
Having a strong SaaS business plan can help your company to be perceived as more organized and professional, to instill confidence and credibility of the team’s business acumen. Moreover, investors like to see a clearly defined financial model outlining customer acquisition cost, break-even point, and other metrics that a business plan for a SaaS company will provide. The trick to writing a good plan is to include just enough information that will deliver the key points investors are reviewing the plan for. For instance, Pro Business Plans includes a scenario analysis variance for the revenue projections in the SaaS business plan. However, it does not perform more than two scenarios to keep investors aware of the high level best case and worst case scenarios.
The key factors to remember when preparing a SaaS company business plan are to understand your market positioning, convey a well-rounded and qualified team, perform good analysis in the business plan, and convey your competitive edge. These elements are what investors will look for in terms of the future viability and potential returns of your business. If you do not adequately communicate your case, they may assume situations that are not in your favor. Pro Business Plans can help your SaaS company to prepare a full investor business plan that will help your company be prepared to acquiring the financing that it needs to build or scale its product to market.