In recent years, the number of people running their own businesses has increased. Whether it’s a full-time job you quit to start your own business, or you’re just taking the plunge and dipping your toe into the entrepreneurial world, there are many reasons why starting a SaaS (software as a service) business as a side hustle could be the right decision for you. Let´s get right into it!
9 Advantages of SaaS Businesses
Side Hustle
You can do it on the side of your day job and earn a nice extra income. SaaS businesses can be run in the evenings and on weekends, so you can still have a full-time job.
As the data shows, one-third of Americans (34%) currently have a side hustle. In 2021, 61.1 million Americans (24%) intend to start a side hustle.
smarts
Flexibility
As a SaaS entrepreneur, you can run your business from anywhere in the world and you set your own schedule.
The majority, 59%, report working on their side hustle in the evenings from 5 to 9 pm to avoid interfering with their regular job.
Luisa Zhou
Low-Risk
You can start your SaaS while you’re still employed. In fact, it’s a great way to test the waters and see if your business idea is viable.
Low investment
SaaS businesses require very little up-front investment, which makes them a great option for side hustlers. In most cases, all you need is a computer and an internet connection.
Low overhead
Starting a SaaS business doesn’t require a lot of money or risk. Mostly, you only need a website to promote your MVP, which you can set up for very little money. For example, web hosting with Bluehost starts at $2.95 per month, you can set up unlimited websites in one account, and you get a free domain for the first year.
Scalability
SaaS can be scaled up easily because it is a digital service. This means that it is delivered over the internet and does not require any installation on the user’s part. SaaS can be quickly and easily scaled up to meet the needs of the user, making it an attractive option for businesses of all sizes. This makes it a great option for those who want to keep their day job while they build their business.
High Income Potential
There are a few reasons why SaaS provides a high-income potential. SaaS is a very new and growing industry with low overhead and high-profit margins.
Typically, most privately held SaaS businesses we work with have gross margins in the range of 70% to 85%. Anything below 70% begins to raise a red flag, requiring additional analysis.
Software Equity Group
Access to Funding
The most commonly cited reason for the easy access to funding enjoyed by SaaS companies is the predictability of their cash flows. Unlike traditional software licenses, in which a customer buys a license and then pays for future upgrades and support as needed, SaaS customers typically sign up for a subscription and pay regular fees upfront. This upfront payment allows SaaS companies to forecast their revenue with a high degree of certainty, which makes them more appealing to investors.
Massive Growth
The SaaS industry has experienced significant market growth in recent years. This is largely due to the increasing popularity of cloud-based software, which allows users to access applications and data from any device with an internet connection. SaaS providers offer a wide range of applications, from CRM and HR software to email and collaboration tools and more businesses move their operations to the cloud. The worldwide SaaS market was 130.69 billion in 2021 and is expected to grow to $716.52 billion in 2028 at a CAGR of 27.5% [Fortune Business Insights].
Finally, let´s have a look at two inspiring founding stories.
SaaS Startup Stories
Easlo
Back at the beginning of the year, Easlo didn’t have any followers or hadn’t earned a single dollar online. Now, he’s gained more than 18,000 Twitter followers, over 25,000 customers on Gumroad, and has raked in over $25,000 online. Easlo creates personalized Notion templates, promotes on Twitter, and sells on Gumroad.
Canva
Canva is a graphic design company that has seen phenomenal success in a very short amount of time. The company was founded in 2012 by two Australians, Melanie Perkins, and Cliff Obrecht, and has since become one of the most popular online graphic design tools in the world. Over those first two years, they reached 2 million users, averaging 3,600 signups each day, or 111,111 signups per month, and Canva has been valued at $3.2 billion. What makes Canva so unique is its user-friendly interface and wide range of templates and tools that make it easy for anyone to create professional-looking graphics.
Conclusion
There are many reasons to start a saas business. Saas businesses are growing in popularity, and there are many opportunities for success. If you have the right idea and the right team, starting a saas business can be a great way to achieve your entrepreneurial goals.
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Peter is a solopreneur in Salzburg, Austria, a husband, and a family father. He runs a little publishing company, and blogs about starting and running online businesses. In his spare time, he enjoys hiking with friends and reading the Bible, and sometimes he takes a trip in his roaring old black 2001 Jaguar XJ8.
