I wanted to write this post for you as I've stumbled across a few things that I think are important when building a SaaS business while working with dozens of businesses that are building a SaaS company. 

I was recently at the Level Up Go High Level conference in November of 2022 and I was actually quite surprised at the number of businesses there that did not have a SaaS business with more than a hundred users.

Go High Level is coming into its 5th year in business so I expected to see more.

I found it quite astonishing and I also found it quite exciting because it tells me that there's a lot of room out there for people who actually want to build a SaaS business.

Throughout my time at the conference, as I was talking to people I started to notice a few themes and I wanted to bring them to your attention.

The first thing that was quite shocking was the number of people that were coming up to me and others asking how can I just make $10,000 a month really quickly.

What's the fast way to do this…. I was like well….  

And used my inside voice.

Immediately when I hear someone talk like this I know I'm not talking to a business owner. 

They do not have business experience and/or have not built a business successfully before or if they have they thought that this business was get rich quick which I'm  here to tell you it is not.

It’s just like every other business and as I say you need a room in your house for crying.

That's part of this process - can I get an amen! 

If you have built any type of business you know that it is extremely difficult work.

Another thing I saw is people were heading headfirst into the SaaS business without doing the front-end work.

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What Is The Front-And Work?

There are a couple of things I think you need to do on the front end when starting a business and the first is the thinking work.

People think they can just choose a random niche - let's just go after real estate agents. They don't have any interest in real estate, first of all, never been a real estate agent, don't even understand the real estate industry, what being a real estate agent is like today… 

You can hear me right - they haven't done the front-end competitive work and they have not dug in to determine what's the real problem that they're going to solve. 

I'm telling you it takes thinking work and when I say thinking work I mean you are going to have to break out and break free of your mind and environment and get into a place in your heart, mind, and soul where those ideas and that energy come from.

This takes us, especially as entrepreneurs, to an uncomfortable place because we need to slow down.

This was missing over and over and over again in the people I spoke to.

I would ask people: “What are you offering, what is your ‘system’?” And I heard the same thing as the last 16 people I just talked to.

There was no real niche selected, no amazing offer that was even remotely close to a problem that the industry was trying to solve or even wanted solved.

We've got to go talk to the business owners we want to serve. We’ve got to talk to dozens of business owners and do your competitive research.

Then you can come out with a real problem that you're going to solve for them.

The people I spoke to, a lot of them, didn't have a real problem that anybody would pay for or that was any different than other people so spending this time up front is very very powerful.

• It could be software with a service - SWAS

• It could be software as a service - SAAS

• It could be software and a service - SAAS

So thinking about how you handle that together with the other things that you do so that you can create a really powerful ecosystem around your business.

I think your success is determined by whether or not you did the additional up-front work.

Because it creates this beautiful ecosystem of my services need my software and my software needs my services.

The people that I found the most successful did the work and they had it dialed in and they were at 1000 - 2000 users.

Can we say Multi-Million Dollar Business.

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Business Takes Investment Capital

The other thing I found quite astonishing when I was talking to business owners was their unwillingness to invest in their SaaS business.

I always use the Pizza Hut example. What if you were starting a Pizza Hut franchise? 

You need rent and you need to buy your signs and you need to go through training and you need to pay your franchise fees. You need to get your staff trained, you need to pay rent etc. 

When I talk to an online business owner about just some pretty branding like something that's beautiful on the front that's going to grab people they don't even want to spend $100 on a logo. Never mind anything else that needs to be done to make sure that that business is represented really well online.

If you're thinking about building a SAAS business and it's going to make you 4 - 5 million dollars a year wouldn't you spend a couple of thousand dollars out front?

They wouldn’t pay for anybody to even sit down and try to help them think through this problem that they're going to solve and put together the offer.

Plugging The Leaky Bucket

The other thing that was quite shocking as I think they don't understand is churn rate.

What do I mean by churn rate? 

It's the number of people that are eventually going to stop using your software/service and if you don't figure out how to slow and stall your churn rate meaning how to keep people in the business you are on a really steep climb.

What is happening is they're selling out front but they're not supported in the backend. 

I was also shocked at how many would not pay for adequate support.

They have got a leaky bucket that they can't quite stop from losing water because they have not thought through support and how they are going to help their business owners actually fully solve the problem that they're saying that they can help them solve.

Support is one of the big issues I saw lacking and people were not willing to help their people with the software either through customized training or a call even just once a week.

I was actually quite surprised by that.

I learned from talking to the most successful business owners at the event that is what they chant - support support support support support.

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What Is Your Purpose Here And Now

The other thing I think you need to give some thought to when starting a SaaS business is what is the commitment that they've made to the universe to fulfill on - your own reason for being here.

There's nothing more soul-sucking and stressful than choosing a business and niche that you don't want to be a part of, never mind even talking to and working with.

It’s going to shine through in everything you do.

A SaaS business will make money! 

There's no business model sexier today than software because people even in recessions will stay on the software.

The churn rate is 9 percent versus in the client game it's 100% - the moment you get a client is the day you are closer to not having a client.

But people don't realize this. That client is going to leave, they're done with you, they don't like you - whatever the reason is they come and go and you know what I mean.

You're constantly on a treadmill but what if you implemented your SaaS which has an average of a 9% churn rate and you sold them your services as well - create a beautiful ecosystem where one feeds the other?

So I want you to tap into your why. The work is worth doing.

What is it that you want this business to do for you? Yes, it's hard, and yes you're not going to sleep sometimes. You're going to have to work like you do when you're opening a Pizza Hut.

You know it is going to hurt, so what is it that's going to push you past all the crap and get you to do the uncomfortable thinking work 

Get you through the initial fears around your money mindset.

What is it that's going to get you to put the money and the time and the energy aside knowing that you can build a 3 million dollar per year business?

We haven't even talked about selling the business for 5- 10 X multiple.

Final Thoughts/Wrapping Things Up

In my experience, these are the things that you come up against all the time when starting a business. 

A SaaS business is no different.

If you are thinking about building a SaaS business - give some of these points a think.

If you are not willing to do the things that I talked about - perhaps SaaS is not for you.

• The thinking work 

• The offer - find a painful problem to solve

• Support - making sure that you're taking great care of your people

• That you understand what sacrifices you need to make to build a business 

• That you've tapped into something that's going to give you the energy

• The grit you need to push through to make this work 

You can have the business and the life you dream of.

I'm an expert in this as you probably guessed and if you've been around my world for a while you know I love to High Level.

You know I love businesses and I love helping people make money if you'd like my help in any of these steps I'd love to help you you can reach out down below 

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