How to Start a SaaS Company

If you are thinking of starting a SaaS company, you are thinking in the right direction. Now is a better time to start a SaaS company. Since 2019, SaaS companies remain the fastest growing market and the largest segment in the software industry. Their unrestricted and immediate access to the global market is jaw-dropping.

Software as a service (SaaS) is a cloud-based technology that uses a software delivery model to render services to its users over the internet. It is a great way to build a passive income business as it is a subscription-based business model.

There are a lot of successful SaaS products out there making hundreds of thousands of dollars or even millions every month, and you may be using some of them.

You don’t need to have any technical expertise to build a SaaS product. A lot of SaaS founders don’t even know how to code or build software. You just need to work with a good team that understands what you want to build.

Without much ado, here is a guide on how to start a SaaS company that will be successful in the future no matter your background.

How to Sart a SaaS Company

  1. Pick an Industry

The first thing you have to do is pick an industry you want to create software in. There are a lot of SaaS products in different industries. Uber (transportation), Grammarly (writing), Netflix (entertainment), Canva (designs), Binance (Blockchain).

Which industry are you venturing into? You can decide to go with ecommerce, SEO, lead generation, sports betting, fashion, or movie streaming. These are all thriving industries you can jump into.

So, before you even think of a name for your software, you first need to decide on the industry you want to jump into.

  1. Carry Out a Feasibility Study

Now that you have decided on the industry, you should carry out market research on your industry. The whole essence of doing this is to know and understand your market well, identify your target audience, competitors, available channels, etc.

Conducting an efficient market survey before kick-starting a SaaS company will give you an edge and introduce you to the industry like a veteran.

  1. Identify a Problem You Want to Solve

There are a lot of problems in every industry that can be solved by software. There is no point in establishing a SaaS company without identifying the problem your software will be solving.

The reason Uber became widely successful was that it solved a big problem in the transportation market.

Take your time to find the problem you want to solve and make sure your software will provide a solution better than any software in the market right now.

  1. Research the Problem

Not all SaaS companies turn out successful. This is where researching the problem comes in.

Will your target audience spend money to get the solution your software will be solving? How are your competitors solving the problem and what are you bringing to the marketplace that provides a better solution?

Also, how big is the problem you are solving? How much are your competitors charging?

The answer to these questions will give you a better perspective of how to go about your software.

  1. Choose a Team

No one ever achieved anything worthwhile alone. They all had a team that helped put things together to achieve their greatness.

In starting a SaaS company, you will need a team of experts like developers to design and develop the software, a website designer, a marketing expert, a business consultant, and even a lawyer to help with the legal process.

This part won’t be easy but it is necessary. You can’t go on this journey alone, even if you are a software developer.

  1. Plan the Company Model

This is the part where you state how your software will be run – what the primary revenue stream will be and how it will be structured, the expenses, marketing strategies, company mission and vision, privacy and security, etc. You will need to sit down to create a detailed business plan for your software company.

Remember, the success of your start-up lies in an effective business plan. It is the foundation upon which the company will be built.

Your ability to effectively plan the proposed SaaS company on paper will go a long way in establishing a successful Software-as-a-Service business venture in the long run.

  1. Get a Business Name

What will be the name of your software? There are no straight rules in choosing a name for a product. Write down as many names that come to your mind. Share the list with business friends and hear what they have to say. Make sure the name is short and easy to remember.

Also, make sure that your business name hasn’t been used already somewhere else. One way to find out is by typing it into Google search. The confirmed way is by submitting it to the authorized body in charge of business registration in your state. If the name has been taken, they will inform you.

Immediately you find out that the name is free, quickly register the name. Choose your ideal business structure while putting your goals in mind. It is up to you whether to go for LLC, LTD, C corps, and the likes.

Additionally, inquire if there’s a need for a license, work permit, or any other paperwork to be filled before operating a SaaS company at the registry.

Understanding and complying with your industry rules and regulations, and your state laws will have a legal impact in setting up your company.

  1. Unveil the Freemium Version First

This is a strategy used by almost all SaaS companies to test their products in the marketplace. This is where you give users access to your product for free but with limited features. As more users begin to use your software, you then launch the paid version for them to upgrade.

And this is after you must have collected a lot of reviews from your download page. From the reviews dropped by users, you get to know what should be included in the paid plan so users will be willing to pay for an upgrade.

  1. Marketing

There are many ways to market a SaaS product. You can make use of online advertising, affiliate marketing, billboards, radio, and television. Experimenting with different mediums is a good idea at the launch stage.

You will need to work with a marketing agency to come up with good marketing strategies to create a buzz for your product in the marketplace.

With adequate and effective marketing, your SaaS company will, without a doubt, grow into one of the best in the industry. You can also take advantages of these free marketing methods to promote your business.


Keep your mind focused on your long-term goals. Operating a SaaS company is a long-term game. Do your PR. After all, who knows the business better than you? Enjoy the process and be willing to adjust to the market needs. As long as you are working hard and smart, your product will hit success.

Francis Nwokike

Francis Nwokike is a Social Entrepreneur and an experienced Disaster Manager. I love discussing new business trends and marketing tips. I share ideas and tips that will help you grow your small and medium business.

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