5 Milestones on the Journey to Scaling a SaaS Business in 2024

5 Milestones on the Journey to Scaling a SaaS Business in 2024Photo byCanva

Looking to scale your SaaS business?

When not correctly executed, scaling can quickly become a growth trap.

Poor scaling can lead to rapid growth that generates more revenue but sucks up so much money and resources that it minimizes your returns.

Maxio revealed that SaaS businesses grew at 14% per year in 2023. This represents a considerable decline from previous years.

With companies struggling to grow and scale, this emphasizes the importance of plotting and observing strategic milestones when scaling a SaaS business to avoid mistakes and ensure you get the process absolutely spot on.

Scaling your business takes time and effort and results won’t be instantaneous, but if you do it correctly, the results will come and, more importantly, they’ll be long-term.

In this article, we’ll discuss important milestones on the journey to scaling a SaaS business in 2024 to help unlock sustainable growth and higher revenue.

Let’s get started.

1. Implementing document management solutions

Still rely on paper to keep your SaaS workflow afloat?

Paper may get the job done when you’re still running a small-scale operation. However, your document storage and handling needs unsustainably multiply as you take on more clients and expand your SaaS business.

So as your business scales, paper-based processes compound inefficiencies, and increase operational costs to slow down and undermine growth.

DeviceMagic revealed that 47% of businesses cited catalyzing business growth as the top advantage of going paperless. This was largely because a paperless workflow reduces expenses and frees up focus and productivity for growth.

So one of the most important things to consider when scaling a SaaS business is adopting cloud-based, document management solutions to support your growth.

With a great document scanning platform, you can automate the routine digitization of incoming paper documents for SaaS business. This allows you to keep your physical storage needs low, enhance efficiency and take on an infinite number of clients.

You can also reduce filing, printing, and other paper-related expenses to increase cost-efficiency by leveraging a great document scanning software. This helps ensure that you can profitably scale your business without breaking the bank.

Additionally, cloud-based digitization supports collaboration to help you grow faster.

It’s the first step to making information more accessible, enabling you to improve information sharing and team collaboration for your SaaS brand.

As a result, you can enhance problem-solving, encourage innovation and improve group productivity, all of which are necessary ingredients to help boost business outcomes.

2. Achieving product-market fit

The success of your software depends on market fit.

If your product is not satisfying market demand, you’ll struggle to generate a consistent stream of customers and you may even fail to break even let alone make a profit.

Eventually, poor product-market fit dissuades investments, and makes you burn through cash reserves quickly, and your business may pay the ultimate price.

A study by CB Insights revealed that 35% of SaaS startups fail for the simple reason that there was no market need for their products. This made it the second topmost reason for business failure, closely behind startups running out of cash.

Therefore, another important milestone you need to achieve before you can even consider scaling a SaaS business is product market fit.

So how can spot poor product-market fit and overcome it?

A few tall-tale signs that may point to this include poor user engagement, difficulty in attracting new customers and negative feedback. If you spot this, it may be time to start thinking about how you can realign your product to resonate better with your market.

This could mean going back to the drawing board with your market research. You may need to conduct a fresh round of interviews and surveys with your target customers so you can understand their needs and preferences better.

Overall, I advise against fixating on just one idea, and suggest you be open to switching directions if you find that a different product might be a better fit for your market.

3. Building a strong team

Want to build a high performing SaaS team?

It’s commonplace and understandable to wear multiple hats when you’re just starting your SaaS business. However, your needs will grow as you scale your operations, and going at it alone will come at the expense of quality.

Without a specialized SaaS team to help bring new ideas to the table, growth for your business can also stall because of limited innovation and creativity.

A survey by Alludo revealed that 61% of businesses agree that poor collaboration can stunt business growth and decrease revenue. This stems from resulting productivity losses and the inability to effectively exchange and act on ideas.

So building a high-performance SaaS team is an important cornerstone for scaling a SaaS business successfully and more sustainably.

Before you can put together your SaaS dream team, you need to identify core roles.

This depends on your objectives across each stage of growth. For instance, if you’re at a point where you want to obtain funding from donors and investors to expand your offerings, it’s prudent to bring on board a professional fund manager.

They may have the expertise, experience and industry connections to link you up with the loans and grants that you need to boost cash flow and scale operations.

Overall, I recommend building efficient, cross-functional teams.

While each employee should have a focus role in line with your growth objectives, you don’t want them working in silos. So it’s important to create a cross-functional collaboration culture that unifies scaling efforts across different departments.

4. Enhancing digital reach with SEO efforts

SaaS growth is joined at the hip with online presence.

If your business doesn't amplify its SEO efforts and grow its digital presence alongside its operational capacity, you’ll struggle to attract new business and safeguard subscription renewals.

Essentially, your customers are your revenue source, and if there’s not enough of them, you’ll struggle to create a strong financial base for profitable growth.

Databox revealed that 43% of SaaS marketers say SEO is their most effective strategy for user acquisition. This places it way above paid advertising tactics like PPC which was deemed nearly twice less effective.

So if you want to get more customers and generate more revenue for scaling, SEO is an important strategy that your SaaS business should explore.

But scaling isn’t only about attracting new business.

It’s also about encouraging subscription renewals, upsells, cross sells and generally generating more revenue from your existing customer base as well.

This is why I recommend working with a great SaaS growth partner, who can help you provide recurring value & personalize brand experiences to boost engagement & loyalty.

For customers who are already at their maximum value to your brand, your SEO agency can improve brand visibility online to help you generate new high-quality leads to expand your revenue stream.

Partnering with an SEO agency is a great way to hack SaaS growth because it helps keep you ahead of the latest market trends, while enabling you to get around a lack of expertise and internal resources to scale your business cost-effectively.

5. Expanding market reach

Keen to turbocharge SaaS growth and profits?

While your initial tool may have been an overwhelming success, you can only tap this existing market for so long before the tap runs dry or you hit maximum growth potential.

What’s more, if you fail to diversify your market and income streams, your SaaS business will be more vulnerable to customer churn and abrupt market changes.

A ChartMogul study revealed that 54% of SaaS companies doubled their Annual Recurring Revenue (ARR) by raising their subscriber count by 5 to 10 times. So you have your work cut out if you want to reach similar levels of success.

If you're already maxed out in your market, you’ll need to diversify and explore new opportunities for growth.

One way to diversify your market is by providing different product levels.

For example, if you have a product that only targets enterprises, you can create a lightweight version for SMEs. This is an extremely effortless and resource-conservative of scaling a SaaS business and expanding your customer base.

You can alternatively create new product offerings to tap into a whole new market segment altogether, and even get more revenue from existing customers.

A great example you can borrow a leaf from is HubSpot. They initially started out offering marketing automation tools, then moved onto other complementary products like a CRM and customer service solutions.

What we can learn from this is to identify other auxiliary needs of your target market, and provide complementary software to your initial offering to widen the net.

Conclusion

Scaling is necessary to keep your doors open.

That’s because failing to scale will inevitably constrict your revenue streams.

When you don’t effectively scale your SaaS business, you’ll struggle to reach new customers, while the competition will only keep pulling ahead.

A study by Paddle revealed that 49% of software companies are unlikely to achieve their ARR targets in 2024. One of the biggest would-be inhibitors is SaaS businesses failing to scale and diversify their markets.

So if you’re to ensure your long-term survival and increase your ARR, knowing the ins and outs of scaling a SaaS business successfully is essential.

By implementing digitization technologies, improving product-market fit and building a high-performance SaaS team, you can increase your chances of scaling sustainably and achieving profitable growth for your brand.

When you set the right milestones for scaling, you’ll be able to get your strategies and timing right and make more informed decisions about product-led growth.