I run a moderately profitable bootstrapped SAAS business so I will share my thoughts based on my own experience:
- Product Market Fit: This is huge because if you cannot prove the market fit, you cannot build a successful business of any type
- solve one main problem: If your product does not solve one main core problem, it will ultimately lose out either to bigger players or just fail. A SAAS with too many features which does a little for someone is always less than a SAAS with few great benefits that does a lot for most.
- Cashflow In > Cashflow out: Simple math. If you are not able to make more revenue than your costs, you will eventually fail. So the goal is to not only maximize revenue but also reduce costs as much as possible.
- Listen to existing customers: Keep an eye your customers and where their struggles/issues are if any. Don't ignore them.
- Ability to sustain good customers: Very important. There will always be churn but as long as you are able to keep and sustain your good customers, that always helps.
- Make more from existing customers/up-selling: I realized that a lot of existing customers who are happy with the product are willing to pay more to get a few custom features from time to time. That adds to the revenue as well.
- Fire the bad customers quickly: Bad clients take more support time and expect to pay less. Fire them if needed. You can never grow your business with bad customers.
- Sales, Sales, Sales. Learn how to sell and go sell the thing. Without sales, there is no business.
- Marketing and Branding: Important but I put this after sales at least in my case. You need to spend time working on your branding even if small.
- Most importantly, learn to build a small team and delegate tasks. 1 person cannot do everything.Yes there are 1 man indie hacker type SAAS out there but they cannot scale beyond a certain point. But with a team of 2-5 people, you can do a lot more scaling.
EDIT: I realized that most of these points are applicable to any business so let me add a few more SAAS specific ones :
- Customers should be able to upgrade or downgrade their plans without much friction. A lot of SAAS businesses miss out on ability to make more because their upgrade process requires human touch. For enterprise, I can understand but for most regular SAAS businesses, make it easy to upgrade or even downgrade
- Grandfather the good clients if you are taking away any key features or raising prices significantly. Be careful about pissing off good customers. If do you have to take away something, please communicate in advance and set the right expectations. Nothing pisses me more than a sudden email that says "sorry bro. gotta pay more and we are doing this next week to you"
- Backups, servers, monitoring: Get the technical stuff in control and automate the hack out of things as much as possible.
- Cancellation and feedback: If a client is cancelling, try and get as much feedback from them as possible. A lot of times I have been able to win back cancelling clients because we addressed something they needed and did not know that they could ask us for that extra help/work.