Key Activities

The primary activities of the business planning center around understanding the target market and the potential customer segments, estimating the opportunity based on market dynamics, building a preliminary financial model, setting goals and expectations, aligning internal teams, and securing initial investment and resources for the SaaS initiative. These strategies will vary widely across the different company profiles will change based on where you are starting and the level of business transformation that may be required. It is essential that this strategy evaluates the full spectrum of considerations that will inform your business strategy, including how the staffing profile of a company may need to change to support the development, operations, customer support, marketing, and sales mechanisms that will be required to successfully release and grow your SaaS offering.

We have identified core pillars that are often part of the business planning exercise. The following is a high-level summary of these pillars and the role they play in the business modeling process:

Assess the Opportunity

• Goal: Determine if a SaaS delivery model is well-aligned with customer needs and market dynamics.

• Outcome: Assessment of whether this a valid opportunity and the key elements that will define the vision for what you are (and are not) targeting with your SaaS offering.

• Key Decision Point: Are there clear strategic, grow, and financial benefits that will offset the cost and effort of transforming to a SaaS delivery model?

Define Target Segments

• Goal: Create a profile of the different types of customers that this SaaS product would target to learn as much about your buyer as possible.

• Outcome: A list of the target segments accompanied by a breakdown of the experience, cost, and value proposition for each segment.

• Key Decision Point: Do you have data and confidence in your understanding of the customer segments that you target, and will these segments enable you to serve as the foundation of how you will build, market, and sell your offering?

Evaluate the Market and Customer Strategy

• Goal: Define your approach to market and sell your SaaS offering to new customers and the incremental staffing or costs that might be associated with taking your new offering to market.

• Outcome: Unique aspects of SaaS market and customer strategy that capture the key mechanisms, resources, costs, and strategies that will be used to acquire, expand, and retain customers.

• Key Decision Point: Does the company have the resources, skills, tools, and budget needed to support the market and sell requirements defined by this process?

Model Market/Segment Growth

• Goal: Create projections for your customer growth for each of the target customer segments.

• Outcome: A forecast of net customer sales projection over a 1-2-year window that provides a view of how the ramp of new customers will unfold. This will provide the backbone for modeling the anticipated financial growth of the company.

• Key Decision Point: Does your strategy and target segments suggest that there will be enough growth in your offering that it warrants the investment? Do you need to re-evaluate your target segments and/or the opportunity?

  Finance

• Goal: Develop a target monetization model for the customer segments, project the target revenue, growth, and retention for each of your segments.

• Outcome: A correlation of new customer acquisition (by segment) with the pricing and packaging model that will yield the projected revenue over time. This will provide a sense of the how growth within each customer segment will contribute to the overall revenue growth of the company.

• Key Decision Point: Does the mix of new customers and price points yield enough revenue to justify moving forward with the SaaS initiative?

  Sales Transformation

• Goal: Develop a profile for the sales organization and determine any transformation or incremental costs will be associated with these changes.

• Outcome: A clear definition of the following: how sales team will be staffed, how resources will be transitioned into SaaS roles (or new resources acquired), and how compensation will be defined for SaaS sales representatives.

• Key Decision Point: Is new staffing required for the sales team? Should you develop an enablement plan for the existing sales team? How will the compensation model change (if at all) for the SaaS sales representatives?

  Marketing Transformation

• Goal: Develop a strategy to build a brand for your SaaS offering and a profile for the marketing company.

• Outcome: A clear definition of your SaaS solution brand, your marketing staffed profile, any transformation or incremental costs that might be associated with these changes, and resources that might be transitioned into SaaS roles (or new resources acquired).

• Key Decision Point: Is new staffing required? Can the existing team successfully transition to a SaaS marketing model?

  Define Operational Model/Resources

• Goal: Define the new SaaS operations footprint and identify any incremental costs associated with hosting, operating, and staffing the operational elements of your SaaS business.

• Outcome: A definition of the target operational experience that will be required to support the end-to-end needs of the business, including any resources and/or transformation steps needed to fully staff this effort with the appropriate resources.

• Key Decision Point: Does the company have the resources and readiness needed to build the operational elements to support and operate a SaaS delivery model?

  Develop a Staffing Profile

• Goal: Assess the business and technical skills of your team and develop a training or hiring plan to fill in any skill or industry gaps in the existing team.

• Outcome: Create a list of skills gaps that need to be filled and determine what incremental resources will be needed to support your company (incorporating the sales, marketing, customer success, product, operations, or other resources identified throughout this modeling process). This captures all the staffing considerations that will need to be addressed by your business plan.

• Key Decision Point: Do you have the resources and skills needed to operate and support the SaaS offering? If not, do you have the budget to fill these gaps?