A business plan is essential for any business, large or small. It helps entrepreneurs focus on their goals and develop a clear path to success. Without a business plan, it is easy to lose sight of the big picture. A well-written business plan can help a business get funded, attract investors, and make sound decisions about growth.
For businesses that offer software as a service (SaaS), a business plan can be a valuable tool for outlining how the company will generate revenue and achieve profitability.
If you are a founder or a founding team member trying to create a business plan for your SaaS startup, we have created the ultimate guide that will help you do so.
Creating Your Business Plan
A great SaaS business plan comprises several individual constituents. You can use them to create a plan or a pitch deck. These are the points you need to cover.
- The Executive Summary
- The Problem
- Your Solution
- Market Size & Opportunity
- Competitive Analysis
- Your Product Description
- Business Model
- Product Roadmap
- Go-To-Market Strategy
- Revenue Projection
- Your Team
Now, let’s look at these in more detail.
1. The Executive Summary
An executive summary is a crucial component of a business plan or model. It provides a brief overview of the plan's main points, including the business's strategy, products or services, target market, and financials. For a SaaS business, the executive summary should also include a brief description of the company's technology platform and how it delivers value to customers.
There are a few things to remember when writing an executive summary. Try to keep it short and to the point. It should summarise the business plan and set the reader up for getting into the finer details of the plan.
Here are a few tips from us at Blox to help you write an excellent executive summary.
- The ideal word count for an executive summary is 800 to 1000
- Make sure the summary is a snapshot of your overall business plan
- Highlight the opportunity
- Showcase your strengths
- Discuss the investment opportunity
2. The Problem Statement
A problem statement is a short and clear description of the issue to be addressed by a business plan. It should be concise and specific and identify the problem, the target market, and the proposed solution.
A good problem statement will help engage readers. It is also important to ensure that the problem statement is specific and focused.
Here are some things to consider that will help you write a good problem statement.
- Focus on the causes (Why is it still a problem?)
- Highlight the timing (Why is it essential to address the problem now?)
- Try to make a business case out of the problem.
- If you need to write about multiple problems, tie all those together with one main problem.
- Use statistics or reports to affirm that it is indeed a problem.
3. Describe Your Solution
When writing a business plan, you will need to include a description of your product or service. It gives your potential investors a clear understanding of what you are offering.
When writing a product description, include critical information such as the benefits of using your product, what makes it unique, and how it will meet the needs of your target market. Keep your language clear and concise, and avoid making any false claims. A well-written product description can boost your business plan and set you up for success.
4. Market Size & Opportunity
Your business plan must include information related to the market size and opportunity. It is especially needed if you are selling a SaaS product, as the market for these products can be immense. To get started, you'll need to identify your target market and then research the size of that market.
Once you understand the market opportunity, you can begin to craft your go-to-market strategy. Keep in mind that market size and opportunity are constantly changing, so it is crucial to stay up-to-date on the latest trends.
Venture capitalists and investment firms love to invest in products that target a big market. So, do a lot of research to ensure you get the market size and the relevant numbers right. Additionally, use industry reports from Gartner and Forrester to support your market size claims.
5. Competitive Landscape and Analysis
To write competitive analysis for your business plan, you must first understand your industry's landscape. It means understanding who your competitors are, what they offer, and how they position themselves in the market.
Once you understand the landscape well, you can start to analyse your business and see where you fit in. Then, you must look at your strengths and weaknesses and compare them to your competitors. This research will help you identify your unique selling points and develop a strategy to best compete in your market.
6. Your Product Description
Describing your product differs from writing about your solution. When writing about the solution, you often focus on how it addresses the problem rather than how the software works. Solution writing is generic, while a product description is very detailed, often highlighting features and capabilities specific to your product.
Focus on your product’s features, capabilities, and relevant specifications. Screenshots can also help illustrate the product's features and capabilities and give potential investors or users a glimpse of your product in action.
In addition, it is important to communicate how the product can benefit users. The ultimate goal is to provide a clear and concise overview of the product to help potential investors or users understand what it offers and how it can meet their needs.
Remember not to reveal everything about your product in the business plan. Your plan will be sent to many people and you want to ensure your unique product ideas are safe.
7. Business Model
A business model is a plan that highlights how a company will generate revenue and profit. It includes the products or services the company plans to sell, the target market, the price point, and the channels through which the company will reach its customers. A business model also includes a company's plans for funding and profitability.
To create a business model, you must start with a business plan. The plan will help you map out the steps you need to take to get your business off the ground. Once you have your plan in place, you can start to think about how you will generate revenue. Then, you need to look at your target market and determine what they are willing to pay for your product or service. You will also need to consider your costs to price your offering accordingly.
8. Product Roadmap
A product roadmap is a high-level overview of a product's development plan. It is a document to communicate a product's vision and direction to stakeholders.
Creating a product roadmap is an integral part of planning for the future of your product. By laying out a clear roadmap, you can ensure that your product stays on track and meets your goals.
Here are a few tips for creating a successful product roadmap:
- Define your product goals.
- Research the competition.
- Identify your target market.
- Create a timeline.
- Define key performance indicators (KPIs).
9. Define a Go-to-Market Strategy
A go-to-market (GTM) strategy is a plan for how a company will sell its products or services to customers. The GTM strategy includes deciding which markets to enter, what products or services to offer, how to price them, and what channels to use to reach customers. A well-crafted GTM strategy can help a company to enter new markets, grow its business, and better serve its customers.
SaaS companies often use go-to-market strategies to win over early adopters and build word-of-mouth buzz. They may offer lower prices or free trials to get people to use their product.
A GTM strategy can be complex. However, when you need to write down your go-to-market strategy as a part of your overall business plan, ensure it gives an overview rather than explaining everything in detail.
10. Revenue Projection
A revenue projection is crucial to any business plan, especially for a SaaS company. A SaaS company's revenue projection must consider several factors, including the number of customers, the average monthly subscription rate, the churn rate, as well as other factors.
A well-crafted revenue projection will give investors and stakeholders a clear idea of the company's potential revenue stream. However, it is important to remember that a revenue projection is just that- a projection, and is not guaranteed.
Try our Blox SaaS revenue calculator to predict your financial outcomes.
11. Your Team
The management team section of a business plan is critical in conveying to investors that the company has the right people in place to execute its vision. It is crucial for SaaS businesses, which require a deep understanding of technology and customer needs. A CEO should lead the management team with a strong vision for the company.
The team should also include a Chief Technology Officer (CTO) or Chief Product Officer (CPO), who will be responsible for developing and executing the product strategy. Other key management team members include a Chief Revenue Officer, responsible for sales and marketing, and a Chief Financial Officer, responsible for financial planning and analysis. The management team should have a proven track record of executing similar business plans.
To sum up, your SaaS business plan should include a solid understanding of your target market, unique selling proposition, go-to-market strategy, and business model.
Finally, you'll need to have a handle on your financial projections and key metrics. With all of this in mind, you will be in an excellent position to create a detailed and comprehensive business plan for your SaaS business