Growing and scaling a business is not for the faint of heart. Though it has a similar connotation, scaling is different from simply growing a business. Effectively scaling your SaaS business takes strategic planning and there are certain structures that need to be in place to maintain a growing business, without it falling apart.
Scaling your SaaS business (the right way) will enable you to handle an increase in sales in a way that is not only cost-effective but also sustainable. You want to ensure that every aspect of your business, from product development to your employees, will be able to withstand the changes when the time comes to scale.
We have compiled advice from 7 SaaS founders who have successfully scaled their business. Their expertise will help you decide how to scale your business and the best time to do so.
1. Streamline Your Processes – Dave and Jon Dickson
Dave and Jon Dickson, entrepreneurs and former owners of MyShopManager. The father and son duo successfully scaled and exited their SaaS business – a tool was created for independent auto repair shops offering a unique view of the customers’ business and customer base. The tool also assists with automation of marketing to improve customer retention.
With decades of experience between them, the importance of streamlining your processes and specifically marketing is something they highlight as key to scaling.
Dave was operating a highly successful business and started consulting, running his whole operation analog – just one customer at a time. That changed when his son Jon, a successful businessman in his own right, came into the picture.
“When I got into Dave’s business, the first thing I saw that was just obvious to me was that they were doing everything by hand,” Jon says. With a background in coding, he was able to streamline Dave’s processes. Then he started helping their auto shop clients streamline their processes, too.
“Part of Dave’s process was to ask shop owners to send customer and sales data over manually via email. The first breakthrough was when I got sick of asking the shop owners to email Excel sheets to us and said, let me just hop on your computer, let me just remote into your shop’s computer and take a look at this database behind your point-of-sale system,” Jon explains. “It turned out that they were mostly SQL databases that I was already familiar with, so I wrote a quick little program over a week or two that would just hook to their database and send me their customer data instantly.”
By automating the marketing processes, Dave and Jon were able to, not only, help their clients grow but, also, grow MyShopManager.
Read more about their journey in this article: Exiting a Growing SaaS: Lessons from MyShopManager
2. Delegate as Much as Possible - Kenny Schumacher
Kenny Schumacher is a serial entrepreneur and has built and sold two businesses. Schumacher scaled his most recent business, a digital high-growth B2B recurring subscription business in the graphic design services niche, from a team of four to over 60 employees.
“To be a successful entrepreneur, you need to understand that delegation is the key to growing and scaling. When starting a new business, I try to do most of the tasks myself to understand them well. But once I know them, I’ll make processes and procedures and then hire and train others to take some of those tasks off my plate.
As I hire people, whether it be for marketing, sales, social media, or account management, it frees up time for me to focus on the next aspect of the business that’s not being delegated but is still high value.”
“A lot of entrepreneurs find it scary to delegate. They might believe the person they’re hiring won’t be as good as them, and a lot of the time, that’s probably true. But the reality is that even if they’re only 60% as effective at the job as the entrepreneur, it still gives you many more hours to focus on other areas. Over time the people you hire will get better and will probably do that job better than you can. Start by hiring people for lower-value tasks so that you can focus on activities that really move the needle.”
Read more about Schumacher’s philosophy around scaling and how he built his business from the ground up Delegating: The Key to Scaling Your Business and Overall Success
3. Keep Your End User in Mind – Denise Purtzer
Denise Purtzer is VP of Partnerships & Alliances at ClearSale, a global leader in e-commerce fraud protection solutions. A key component of ClearSale’s strategy has been keeping the customer top of mind. This has helped the company surpass its goals.
“It’s important to not have the mentality of building it once and it’s complete. Consider building in enhancements and updating your software to change and meet the needs based on the feedback you receive. Ask for reviews so you can solicit feedback on your software. Above all, keep your end-user in mind and make sure you are delivering a customer experience that exceeds their expectations. In the case of fraud prevention, the more that is unknown to the customer as far as backend checks, etc. the better. Onboarding should not be an issue either. In order to appeal to all merchants and skill levels, you should make it easy and quick to add your software and go live. Eliminating barriers on the end consumer and merchant side of things will help make your product more successful.”
4. Invest in Your Employees – Rafael Sweary
Rafael Sweary is the president and co-founder of WalkMe, a digital adoption platform that enables businesses to simplify their online experience and eliminate user confusion.
“The team, the team, the team. Invest in your employees. Let them grow and create a culture where people aren’t afraid to speak their mind, but at the same time can also disagree and commit. It’s fine that everybody has an opinion, but in the end, once the decision is made that’s everyone’s mind. To build a great company, you need a great team.”
5. Don’t Be Afraid to Hire Out – Jane Portman
Jane Portman, the co-founder of UserList, advises that SaaS founders shouldn’t be afraid to hire other people to pitch in, at any point in their business. You don’t have to try and do everything yourself—and you shouldn’t.
“Start thinking beyond your own hands. Don’t think that you can do everything yourself. With modern software, and especially for your founding team of a couple of people, you can make a ton happen in-house, but at some point, you will need extra helping hands.”
She concludes by sharing another secret to scaling: having a realistic timeline and not burning out. Scaling at a reasonable pace can make sure that you won’t burn out and you will create a successful business.
Read more about Jane Portman and her keys to scaling: Userlist: The Art of Communication
6. Figure Out Paid Acquisition – Franco Caporale
Franco Caporale, the CEO and founder of SaaSMQL, believes “the key to scaling a company is to figure out paid acquisition. Not the free stuff, the free is not scalable, but once you figured out paid, and once you can spend a dollar to get five back, that’s when you can scale the company.”
Read more from Franco Caporale and his expertise on SaaS: Franco Caporale: The Messy World of Lead Generation
7. Focus on Repeatability – Harris Kenny
Harris Kenny, the founder of IntroCRM, advises that people shouldn’t scale too early on. They need to make sure they are in a place of scalability before executing. He also suggests that founders focus on repeatability.
“We really try to focus on repeatability. Do you feel like you have repeatability with the new business that you’re bringing in? Can you accurately explain to someone else who your customers are and what the thread is between them? If you can’t do that, I don’t care how much money you’re making. You will struggle to scale on the revenue side of the business.”
He continued, “I’ve been in companies that are literally making tens of millions of dollars in revenue and cannot answer this question. They might just be riding a wave. It might just be a fast-growing market. They might just nail a product just right. Maybe they got there first, who knows. But if you don’t have repeatability, then the chance of you falling off that wave is pretty high.”
He finished off by reminding SaaS founders of a key to marketing success, that ultimately leads to a scalable business. He also shared an example.
“So that would be a prerequisite: understanding the problem that you’re solving for customers. ‘We sell a product that helps do this thing.’ It can’t be vague. It must be really specific. You have to be able to explain it to me so that I independently can go out and find someone and bring them to you and say, do you mean like this? And they say, yes, that’s our customer. And then: can I do it again? And they say, yes, I do it again. Now we have repeatability. Now we can go do some marketing,” Harris said.
Remember, use repeatability to validate if you’re ready to start doing scaling efforts or not.
To read more from Harris Kenny check out this article: Harris Kenny Has a Vision: A Software Company That Cares About People Over Profits.
So, is it Time to Scale?
There is a multitude of components to scaling a SaaS business. At the end of the day, how you choose to scale your business is up to you and should be in the best interest of your business. Slow and steady often wins the race in the SaaS industry, even though it is easy to only want to stay in the fast lane. It is better to take your time and be intentional than it is to rush without a well-thought-out strategy.
If you are looking to learn more about scaling your business with your exit in mind, read our SaaS exit planning overview. We also offer free valuations of SaaS businesses. Finding out what your business is worth will help you determine what next steps are right for you to scale with the end goal in mind.