Think about the tools you use every day in your business: HubSpot for marketing, Salesforce for customer management, Shopify for e-commerce, Slack for team communication, Adobe for creative work, and Zoom for meetings. What do they all have in common? They’re all SaaS (Software as a Service) businesses that have transformed how we work in 2025.
These online businesses deliver services to customers in ways that simply weren’t possible before the digital revolution. SaaS businesses typically have lower barriers to entry than traditional businesses and can often be more profitable due to their agility and capacity for innovation. It’s no wonder the global SaaS market is projected to reach $334 billion by 2027.
What is a software as a service (SaaS) business?
Put simply, SaaS companies use software to provide services to customers. Unlike traditional software that you’d install on your computer, SaaS products are accessed through your web browser or a mobile app. The software provider hosts everything on their servers, which is why you might hear SaaS products called “hosted solutions,” “web-based solutions,” or “cloud-based solutions.”
A SaaS business delivers software applications online rather than requiring customers to install or manage them locally. Most SaaS companies operate on a subscription model, where customers pay monthly or annually for access, with updates and ongoing support typically included in the price.
The beauty of this model lies in its simplicity for both provider and customer. As a SaaS startup, you’re in charge of the entire product lifecycle, from initial development through to hosting, maintenance, and continuous improvement. For customers, it makes managing data, creative work, or team communications 10 times easier through digital platforms like these.
Can you start a SaaS company without technical expertise?
The short answer is absolutely, yes.
Anyone with a solid idea and the determination to learn can build a SaaS business; it just requires patience and commitment to developing new skills. If you’re willing to learn coding yourself, you’ll retain full intellectual property rights, which can be valuable down the road. However, if you choose to outsource development, make sure you have robust intellectual property agreements in place from day one, so no ideas are stolen.
At the end of the day, many successful SaaS founders started with minimal technical knowledge but surrounded themselves with the right people and weren’t afraid to learn and apply their new skills as they went.
Steps to start a SaaS business
Thinking of starting a SaaS business in 2025? Let’s dive into how to do it.
Step 1: Develop a solution to a common problem
Every successful SaaS business starts with identifying a genuine problem that many people face. No problem means no business, it’s that simple. Your job is to find a solution that effectively addresses a pain point that people would want and need to solve.
To do this, the key is in knowing your industry inside and out. Understanding the daily frustrations, inefficiencies, and gaps that exist in your target market is crucial to knowing where to start. The more industry experience you have, the easier it becomes to spot these opportunities. Don’t just rely on your assumptions or what you ‘feel’ is needed; instead, dig deep into research, attend industry forums, speak with potential customers, and observe existing workflows to identify where improvements are desperately needed.
Step 2: Write out a plan
A solid plan takes your idea from concept to actionable strategy. Start lean with a simple outline to get your thoughts on paper, then develop it into a more comprehensive strategic document.
When you’re ready to iron it out, you should include these four components:
1. Strategy: Define your unique value proposition. Establishing what makes you different from existing solutions is essential. Clearly describe the problem you’re solving, your target market, and your competition. Be specific about market segments and how you’ll stand out.
2. Tactics: Outline your sales channels, marketing approach, and product distribution strategy. Consider potential brand partnerships and identify the core team members you’ll need to execute your vision.
3. Business Model: Get clear about the money side of things, as this can make or break a business. Develop initial sales forecasts and expense budgets, then list your primary revenue streams and key costs. This financial framework will be essential when validating your idea and seeking funding from investors on pitch nights.
4. Timeline: Create an action plan with specific dates and responsibilities. When will each milestone be achieved? Who’s accountable for what? No timeline = no direction.
Step 3: Validate your business
With your idea documented and your plan in place, it’s time for the crucial validation phase. You’ll likely have numerous assumptions about your market, customers, and solution, so now’s the time to test whether they’re accurate.
Primary research is invaluable here. Speak directly with potential customers, whether it’s face-to-face in a cafe or digitally through ads. You need to know what they think. You can validate demand by running targeted search ads, launching a crowdfunding campaign, or even creating a simple landing page to gauge interest. Remember: real-world feedback provides the parameters for success.
During this phase, also conduct a thorough competitive analysis and consider developing a minimum viable product (MVP) to test core functionality with early users. This can help to validate your business even further.
Step 4: Explore pricing and customer acquisition
Most SaaS businesses thrive on subscription-based pricing models, but finding the right price point requires experimentation. Consider factors like customer acquisition cost and what your target market is willing to pay for the value you provide.
It’s best to start by testing different pricing strategies out. It can be anywhere from freemium models to tiered pricing or flat-rate subscriptions; all will help you to see what resonates with your audience.
A subscription tends to work well for SaaS because of the increased potential lifetime value of each customer. The longer they are supporting your business, the higher their lifetime value, and the more they will continue to pay.
However, it’s important to remember that pricing isn’t just about covering costs; it’s a strategic tool that communicates value and positions your brand in the market.
Step 5: Establish and differentiate yourself
In a crowded SaaS marketplace, strong branding helps you stand out and communicate your vision clearly. Your brand should reflect your company’s personality and values whilst appealing to your target audience.
Start with a memorable domain name that’s easy to spell. It’s often just your brand name, think about salesforce.com, zoom.us, or dropbox.com. Then pick your TLD (Top-Level Domain), which is the last part of the name after the dot, used to classify domain names:
[ .com ] is the most trusted and common one
[ .io ] is used among tech-focused businesses
[ .ai ] is picked for businesses that heavily use AI
[ .co ] is a great option if .com isn’t available
[ .tech ] is for tech-heavy businesses
[ .solutions ] is best for businesses that offer problem-solving services
[ .digital ] is for digitally focused businesses
What’s important is that your domain name and TLD reflect your business purpose. With that picked, it’s then time to invest energy into developing a consistent visual identity, messaging, and tone of voice that will carry across all customer touchpoints. From social media to your website, you must have a clear brand feel so you’re communicating the same message to everyone.
Step 6: Legalise your business
To legally operate a business, you need to choose and register your business structure. You can pick between a sole trader (you on your own), a partnership (two or more people), a company (separate legal entity, such as shareholders), or a trust (trustee holds assets). Ensure your business structure is appropriate for your goals and jurisdiction. Once decided upon, it’s important that you register it through the Australian Government in order to legally operate.
Other factors to consider when starting up your business would be liability protection in place if anything were to go on, tax implications to be aware of each year, and future funding requirements in order to grow. Don’t forget about essential elements like terms of service, privacy policies, and user agreements, which are particularly important for SaaS businesses handling customer data.
Step 7: Find the funding to support growth
Determine how much capital you’ll need to reach profitability and consider various funding options: bootstrapping, angel investors, venture capital, or government grants. Each option comes with different tradeoffs in terms of control, timeline, and growth expectations.
1. Bootstrapping: Is where the startup founder uses their financial resources or those close to them to grow. This gives founders total control over the business in every aspect because the funding and spending are up to them. This method is more self-reliant and focused on sustainable growth rather than rapid scaling.
2. Angel investors: These are industry experts who invest their own money in exchange for equity or convertible debt. Angel investors bring both learning and strategy at the same time. They’ll give you personalised mentorship as well as access to networks that may have taken years to get to. As a founder, you have less control as it’s now shared with the investors.
3. Venture capital: These are firms that invest in the ideas of startup founders that have a high potential for success but limited access to traditional financing, like bank loans. It comes with mentoring, strategic guidance, and extensive connections, but less control over actions as an entrepreneur.
4. Government grants: Are non-repayable funds provided by government agencies to support innovation, research and development, or specific industry sectors. These grants typically come with fewer strings attached than private investment, allowing founders to maintain full ownership and control of their business. However, they often require extensive application processes, strict reporting requirements, and must be used for specific purposes aligned with government objectives.
Securing adequate funding is crucial for startup success, as it provides the financial runway needed to develop products, build teams, acquire customers, and scale operations. The choice of funding source directly impacts not only your company’s growth trajectory but also your level of control, strategic direction, and long-term vision as a founder.
Step 8: Build your SaaS site
Your website serves as both a marketing tool and a product delivery platform. Remember, first impressions matter enormously in the SaaS world, where customers can easily switch to competitors.
- Be clear with your messaging: Your homepage should immediately communicate what problem you solve and for whom. Visitors should understand your value within 5-10 seconds of landing on your site. Use compelling headlines, concise copy, and visual elements that reinforce your message.
- Use SEO to your advantage: Implement proper meta tags, keyword-rich content, and technical SEO best practices to improve search visibility.
- Build trust with customers: Include customer testimonials, case studies, security badges, and company logos to build trust. Display pricing transparently and provide detailed feature comparisons.
- Make navigation easy: Design with your users’ journey in mind, from initial discovery to product signup. Ensure navigation is logical, loading times are fast, and the path to conversion is frictionless. You want it to be easy for users to use your SaaS software, not confusing.
- Be mobile and desktop friendly: Test your site on different devices and browsers to guarantee consistency. Since a lot of B2B businesses search via phone, a poor mobile experience can instantly eliminate potential customers.
Step 9: Develop a Go-to-Market strategy
A go-to-market strategy is an overall plan of how you’re going to take your plan and make it a reality. There are a couple of key factors that need to be included:
- Have a value proposition clearly stated: Your value proposition should articulate the specific problem you solve, how you solve it differently from competitors, and the measurable benefits customers receive. This isn’t just a catchy tagline – it’s a strategic foundation that guides every business decision.
- Identify your target demographic: Go beyond basic demographics like age and location. Define your ideal customer’s pain points, buying behaviours, decision-making process, and preferred communication channels.
Next, your go-to-market strategy should outline how you’ll launch, reach customers, convert them to paid users, and scale efficiently. The best way to look at it is having a strategy in each of: sales, marketing, or pricing.
- Sales Strategy: Develop a plan on how you will acquire the right customers in your target audience, create direct sales, and form partnerships.
- Marketing Strategy: Have a plan set for how to generate awareness and interest in your Saas service to those you’re targeting. This would be specifically in social media and promotional activities.
- Pricing Strategy: Create a plan on how much you’ll be selling your service online, whether it’s a subscription or an annual payment.
Finally, to track how your SaaS service is performing and if it’s leading to success, include:
- Key Performance Indicators: Objective data to guide decision-making, identify problems early, and measure progress toward your goals.
With all of these combined in your go-to-market strategy, you’ll be more than ready to launch.
Step 10: Establish goals for success
While you’ll have your internal KPI’s through your GTP strategy, it’s also helpful to define clear, measurable objectives for your SaaS business to accomplish. In general, SaaS goals include:
- Monthly Recurring Revenue (MRR): The predictable revenue your business generates each month from all active subscriptions, providing a clear view of your recurring income stream.
- Customer Acquisition Cost (CAC): The total cost of sales and marketing efforts required to acquire one new paying customer.
- Customer Lifetime Value (LTV): The total revenue you can expect to generate from a single customer throughout their entire relationship with your business.
- Churn rate: The percentage of customers who cancel their subscriptions or stop using your service within a specific period, such as monthly or annually.
Regular monitoring, fortnightly or monthly, of these metrics helps you, as the entrepreneur, make informed decisions and identify areas for improvement in your SaaS service.
Why should you start a SaaS business?
SaaS businesses offer unique advantages: recurring revenue streams, scalability without proportional increases in costs, and the ability to continuously improve your product based on user feedback. They also allow you to serve customers globally without the constraints of physical location or traditional business hours.
The subscription model provides predictable income, making it easier to plan and invest in growth. Plus, satisfied customers become your best marketing advocates, often driving organic growth through referrals and positive reviews.
Start your SaaS business with the support you need today
Building a SaaS business doesn’t have to be a solo journey. Melbourne Connect co-working provides the perfect environment where innovators and entrepreneurs come together to transform business ideas into thriving ventures.
We offer comprehensive support, including networking events, mentoring communities, and diverse collaborative spaces designed to foster creativity.
Whether you need a quiet space to code, a meeting room to pitch investors, or simply want to connect with like-minded entrepreneurs facing similar challenges, the opportunities for growth and collaboration are endless.