So, your SaaS company has started to expand. This is fantastic news but managing that growth needs to be done carefully. You cannot just take your foot off the wheel at this point, and your management procedures must be in line with the growing success of your business. As more customers subscribe to your vital service, you will need to monitor increased payments, renewals, and possibly hire more employees.
The true success of a SaaS business is down to the management plan in place. Without a clear path set out, you won’t be able to make the necessary business decisions in time. Here are three tips to manage any growing SaaS company.
Create Automatic Schedules
As the business grows, you will need to manage a lot more responsibilities. This is the point where things start to fall through the cracks because the workload becomes too much to handle. By automating as many processes and procedures as possible, you can spend more time focusing on the larger aspects of the business, such as reducing customer churn. The less churn you can record the better, as it tells you that the business is retaining existing customers and bringing new business in at the same time.
Payments and renewals can be managed digitally using a variety of software applications. Use the system to monitor upcoming renewals and send automatic reminders to customers. Include an option to auto-renew each year and the system will do the rest, including monitoring when the payment has been received. These factors, although vitally important to deal with a growing SaaS company, can be easily managed with SaaS applications and invoicing systems that carry out those duties without any outside input.
Increase Seller Discretionary Earnings
The value of the seller discretionary earnings (SDE)is calculated by adding the current revenue of the business and deducting the cost of goods and operating expenses. This is known as a multiplier in the SaaS industry, and it values the business financially. There are several ways to calculate this multiple, including annual recurring revenue (ARR) against monthly recurring revenue (MRR). The lower each of these figures is, the less valuable the company is in the market. You want both monthly and annual revenue recurring at a rate that will yield more profits for less financial investment.
The only way to improve SDE is to evaluate the business using the various multiples that can be applied. If you keep up to date with multiples, you can assess when the business is succeeding and when it requires some attention and additional investment.
Focus On Staff Upskilling
Hiring a few extra employees should be on your list of things to manage the increased workload. You should also be educating your employees more often and hosting training sessions to make sure that everyone works with the same system, rules, and regulations. To manage the growing success, you will also look for other applications and management tools that can be incorporated.
This will require employee development to take place, as some business policies may change or be improved. Avoid any shadow IT by ensuring that all employees are working on the same system with the same resources. The simplest solution is often the better one, so don’t try to complicate the management system by introducing too many tools. Use only what is needed to manage the expansion of the business.
If your SaaS business needs more management because its success is growing, you’re doing something right. Don’t change the basics, but work on managing the increased workload with a few simple things to keep in mind. Managing the success of a growing business takes time, effort, and careful consideration into the various factors discussed.
This was a sponsored post.