SaaS business

Product Vision vs. Product Strategy. Do You Need Both?


mins to read

Trying to navigate the complex world of product development, but are unsure of the difference between a product vision and a product strategy? You're not alone in this. Many product owners struggle to understand the nuances and end up creating their own improvized version of strategic planning.

At Eleken, when we start the work on a design for a new client, we always ask them to share their vision and strategy. These two define a lot in product design, as well as in development, marketing, sales, and so on.

This article explains the importance of having a clear product vision to guide the development of your product, and how a solid product strategy can help you make that vision reality and bring your product to market.

What is product strategy and vision?

Product vision states the future that you aim to create. It describes the purpose of your product, highlighting what problem it solves and whom it serves. If this is too abstract for you and you need a more detailed explanation, read our article about 10 principles of great product vision.

The most common product strategy definition is closely related to the previous term: product strategy is a plan for how to achieve the product vision. It includes the specific goals, objectives, target market, competitive landscape, and positioning of the product.

To put it simple, product vision is where we want to get, while product strategy is how we want to get there.

product vision vs product strategy

As we have already written A LOT about product vision in this blog), I’ll focus on product strategy in this article. If you need to refresh your memories about product vision, check out our product vision guide (it includes examples and a template).

Characteristics of a good product strategy

  • Customer-focused. It is based on a thorough understanding of the target market and customer needs, and is designed to deliver value to the customer.
  • Clear and actionable. It includes a clear value proposition and a plan for achieving the product vision, with specific steps and actions outlined.
  • Prioritized. It prioritizes the development of features and capabilities based on their impact and the resources required to develop them.
  • Adaptable. It is flexible and able to adapt to changes in the market or customer needs.
  • Collaborative. It involves input and buy-in from all relevant stakeholders, including the product team, marketing, sales, and customer support teams.
  • Data-Driven. It is based on data and research, such as customer feedback, market trends, and competitive analysis.
  • Continuous. It includes a plan for ongoing monitoring and improvement, to ensure the product remains competitive and relevant over time.

Where to start when creating a product strategy?

Strategy is a key element that defines what your team will be doing in the next year or so. That’s what makes it hard to create. To get a starting point, you can follow the advice of Marty Cagan: build a product strategy around a series of product/market fits.

So, how do we get there? A common way of unfolding product strategy is to start with the customer. Who is your product serving? Define the total addressable market (TAM), and figure out how you can reach it. Starting with one segment (user persona, geographical) is the first milestone, then there is the next one, and so on until you cover all the TAM.

It can be just releasing a product on your domestic market and then expanding to other markets. Or, the strategy can be organized to reach different user personas, one after another. For a B2B product, product/market fits can be about different vertical markets.

To shape product strategy, you need to get together all key stakeholders: head of product, head of technology, and head of product marketing. When talking about a small startup, you can unite the whole team to get the best result.

What comes first: vision or strategy?

Product vision usually comes first, as it provides the overarching direction and purpose for the product. A product vision defines the desired future state of the product. This is a statement that guides the team and stakeholders and helps them with understanding the product's direction.

Once the product vision is established, the product strategy can be developed to align with the vision and outline the steps and actions necessary to bring the vision to reality. The product strategy is a plan on how to achieve the product vision, so it should be aligned with the vision in order to be effective.

As both vision and strategy are often developed during the same strategic session time, it’s safe to say that strategy affects the vision. What comes first and which one defines another is not that important. It's the consistency between the two that is crucial.

Difference between product vision and strategy

Whenever you have to explain a concept related to product design, you can always find parallels with a house construction project. So, let’s see where our product vision and product strategy are when we build a house.

Before you lay the foundation, you need a blueprint, a clear picture of what you want the finished product to look like. That blueprint is your product vision. But having a vision alone is not enough to build a great building. 

You also need a solid construction plan, a strategy that outlines the steps and materials needed to bring that vision to reality. Think of it as a contractor's plan for building the house.

product vision s product strategy

Without both a blueprint and a plan, your house may never be built or may not be built according to your specifications. In the same way, product vision and product strategy define the process and stability of the construction.

The difference is also in terms: the vision is typically set in 3 to 5 years from now, while the strategy focuses on the plan for 1 to 1,5 years. Product vision is the long-term perspective of what the product should be, while the product strategy is the plan on how to get there in the medium-term.

The size of ambition. How different product visions affect product strategies

Now that we won’t confuse product vision with product strategy any more, let’s take a closer look at the dynamics between them. It can be very visible when we take as an example two different visions, a more ambitious one and a less ambitious one.  This is how Tim Herbig, a product management consultant, defines them: “low-key” means visions and strategies that stay close to the status quo; “ambitious” are disruptive visions and strategies that change the status quo.

An ambitious product vision could be something like "To revolutionize the transportation industry by creating a fully autonomous, electric vehicle that will reduce carbon emissions and make transportation more accessible and efficient for everyone.”

For a low-key product vision, let’s imagine "To create a mobile app that simplifies grocery shopping by allowing users to create and share shopping lists with their friends and family.”

The ambitious product vision aims to make a big, revolutionary impact on the industry and society, whereas the low-key product vision aims to solve a specific problem for a niche group of users without disrupting the market. Both are important, but the level of ambition and scope of the vision will typically affect the complexity and resources required to achieve it.

For the first one, you would have to start with building a prototype of the vehicle, then starting mass production and reaching the market of people with high income, then find ways to build cheaper models and maybe work with state lobby to promote the project.

ambitious product vision

For the second one, you would focus on a distinct design, and market it through social media, starting with your country and then spreading it to others, if that is your goal.

low-key product vision

These examples give a better understandung of how strategy depends on the dimension of the vision. Of course, it is a very generalized overview, and real product strategies are not written in a couple of sentences, but you get the idea, right?

Golden rules of product vision and product strategy

Now that we have figured out what is the relationship between product vision and product strategy, let’s go through some principles that both of them are based on.

1. Focus on customers rather than the competitors

Product strategy and product vision are strong tools that should help you stay on your own track when you get inclined to do something reliant on what the competitors do.

When you follow the competitors, in the best case, you’ll arrive second. If you follow your own path, you have chances to come first.

2. Focus on the value

Clearly articulate what makes your product unique and why it offers value to customers.

3. Align with company goals

Ensure that your product strategy aligns with the company's overall goals and objectives so that it can create value for both the customer and the company and doesn’t create discrepancies with other departments.

4. Collaborate with cross-functional teams

Work closely with other teams, such as marketing, sales, and customer support, to ensure a cohesive and effective product strategy.

5. Use data to inform decisions

Make data-driven decisions, using research and customer feedback to guide your product strategy.

6. Be flexible and agile

Be prepared to pivot and make changes to your strategy when needed, in response to market and customer demands.


Product vision and strategy are essential for every emerging product.  A clear product vision serves as the guiding light, inspiring and aligning the team toward a common goal. A well-defined product strategy provides a plan for execution, ensuring that resources are focused on the most impactful initiatives.

Now that you have the product vision and strategy sorted out, you can look further to the next step: product roadmap. Read our article to learn how to build a functional roadmap for your product.

Masha Panchenko


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SaaS business
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Product Life Cycle: Everything You Need to Know about Stages and Success Strategies

If you are here, you’re probably seeking to build a digital project. Just like human beings, all products undergo phases of development and growth. A profound understanding and knowledge of the product life cycle and its stages, help you to act in the right direction to prolong the lifetime of your SaaS.

Eleken is a product design company, with the end users being the most significant element of our process. Setting up a SaaS business is not only about designing the project. The truth about growth and longevity is that your product needs to meet its customers’ requirements. Throughout all these phases, it’s the user who defines whether your SaaS lives or dies.

In this article, we will look closely at the stages of the product lifespan to support you with figuring out how to develop your SaaS.

4 main stages of the product life cycle

All in all, there are 4 main phases of the SaaS lifetime: 

Let’s look at the curve of the product life cycle with all phases included:

Image credit: Economicshelp.org

The research & development stage precedes all the other phases and is all about research and testing product prototypes. This is usually an indefinite phase dedicated to learning more about the requirements of your target customers. By studying the issues your potential users deal with, you can think of the ways to satisfy their requests and create SaaS.

If your project is brand new, the research & development stage can continue even for some years. During this time, you can look for investors, plan the launch of the product, and finalize the arrangements to take your startup off the ground. Such preparations may include building a website, creating a business plan, and exploring your customer base.

One of the biggest obstacles at this time is the absence of revenue. In most cases, all of your finances are used for market analysis and project development as you need to lay the foundations for your SaaS introduction.

Introduction stage

The keypoints:

Goal - introduce your product and start building a client base
Challenges - no revenue
- potential users are only getting familiar with SaaS
Recommendations - invest in marketing and advertising
- try to reach out to as many targeted customers as possible
- pay attention to your first users’ feedback

During the first stage, the product debuts in the market, so you have to introduce it properly. The task here is to spread the word about your service. Because nobody knows much about your SaaS yet, you should provide as much information as possible. You should plan your go-to-market strategy way in advance.

A common way to do this is to start talking about your project a few months before it is actually released. On the one hand, you are slowly introducing your product to people. On the other hand, as they are learning your SaaS step by step, they can decide if they need it once it shows up on the market.

Reform, a powerful data preparation solution built by SlamData is one example of a SaaS product in the introduction stage that we assisted with design (check our case study here). There were no analogs to this service on the market, so our client came up with a plain message to their users: a tool that turns your data into analytics-ready tables in minutes.

Reform - example of introduction stage of SaaS product life cycle

Reviews and feedback are crucial at this point. With users’ comments and opinions regarding improvements and changes, you will know what modifications are required and what customers want to see in the product shortly.

You can even ask your friends or experienced people from the same sphere to review your project. They may advise what to improve, add, or even exclude from it. Honest reviews are the most valuable ones, even though they are not always positive.

An additional boost in the introduction stage is an investment in marketing and advertising to draw attention to your SaaS. Thus, you will stimulate demand, which, in its turn, should hike both your product’s popularity and sales. Nevertheless, be prepared that there can be no revenue, as the users are still getting familiar with your service. Good customer acquisition strategy is a key to business growth up till the next stage.

Growth stage

The keypoints:

Goal - keep on increasing a client base
- resist growing competition
Challenges - market growth and many competitors
Recommendations - deliver what your users need
- invest in advertising
- look into different distribution channels

In the growth stage of the SaaS lifetime, customers already know about your product and invest money in it actively. As a result, sales are constantly increasing, which creates stable revenue.

Let's look at the project in its growth stage to understand how the target audience shapes your actions and development methods. We have chosen Dropbox that wasn’t a unique product initially. Indeed, there were plenty of cloud storage services on the market. Dropbox intended to be a first storage service that would be simple to use. 

Dropbox - example of growth stage of SaaS product life cycle

By introducing its services for Linux users years ago, Dropbox managed to enter a whole new market segment. Additionally, this software is famous for its referral programs. With more new customers you invite to Dropbox, your free storage is getting bigger. This strategy has been effective for a few years already and constantly adds to the number of users. 

Another essential quality of the growth stage is a market expansion which is caused by project development. When new SaaS enter the market and enjoy their popularity, there appear more competitors. But what to do if the competition is too harsh and your product remains unnoticed?

Don’t forget about the marketing aspect, so that advertising works in your favor. With SaaS, you can consider such ways of promotion as social media platforms or cooperation with bigger companies or even influencers. At the same time, you may check various distribution channels to enlarge the number of potential customers. 

Maturity stage

The keypoints:

Goals - stabilize your market share
Challenges - market saturation
- sales dropping
Recommendations - focus on product differentiation
- add new features
- look into all segments of the market

Once you get to the maturity phase of the product lifespan, be prepared for market saturation. Sales are dropping or slowing down while advertising is not so easy and fruitful. This happens because many users have already purchased your SaaS.

Marketing should focus on differentiation. In comparison to similar projects, your SaaS should have serious benefits to stand out. In this stage, the stabilization of market share and keeping customers are your major goals. Then, you can restart the life cycle of the product to avoid falling into the decline stage.

You should analyze your SaaS and the requests of the target audience once again, as they could have changed since the launch. This phase is a high time to launch new features and reach out to all market segments. Remember that with time, the technological sphere is only advancing and your product has to keep up with all the changes.

Before working with Eleken, TextMagic was a messaging service helping small businesses with marketing. However, being in the maturity stage, they decided to add more functionality to their product. In such a way, TextMagic skyrocketed the number of users and remained active on the market (more information in our case study).

TextMagic - example of maturity stage of SaaS product life cycle

As mentioned before, effective marketing and advertising always come in handy. However, there are times when you should do more. One more trick here would be implementing success strategies to keep your SaaS profitable and we will get back to these a little bit later.

Decline stage 

The keypoints:

Challenges - sales, market share, and demand are dropping
Recommendations - redesign and redevelop product based on current customers’ needs (if possible)

Although the maturity stage can last for decades, each project will eventually reach its final stage, also known as the decline. During this time, both sales and market share are gradually dropping, which is caused by a slowly decreasing demand. 

Because of the over-saturated market, there are almost no potential new users. Consequently, your advertising is targeted mostly at proven loyal customers with prices being reduced for them. In such a stage, it is advisable to redesign and redevelop SaaS to create demand again.

A fine example of a project in its decline stage is Kodak. This company is worldwide known for its photography products. It was rather successful in the early 21st century. However, Kodak failed to shift to digital photography and went bankrupt. Probably, if they could foresee and adapt to the change in their users’ requirements, they would remain in the market.  

Kodak - example of decline stage of product life cycle

Success strategies to prolong your product’s longevity

Apart from conventional tips to profit from each stage of the SaaS lifespan, you can also implement success strategies. However, make sure to double-check if they will work best for a certain stage of the product lifetime. Let’s look at these methods down here:

Adding value

This strategy often works magic, especially with SaaS. There is always something that can be added or improved in software so that it becomes even better. Sometimes, it is just a modern UI/UX design but sometimes, it can be an essential feature that users have been begging for forever. 

Exploration of new markets

This strategy can be beneficial in each phase of the product life cycle. Without careful consideration of users’ needs and planning of your next steps, it is impossible to build a profitable SaaS or any other project. That is why the opportunities that come with new markets can always make a deal and attract an even bigger pool of potential customers.

New packaging

This approach is effortless to imagine when you are selling actual goods and products. Nothing surprising here, but works wonders in most spheres. But what about software? Introducing a SaaS version is very likely to make it even more attractive to targeted users. 

In terms of SaaS, this strategy is about design and the very service. You can optimize and update the website, features, and anything else that comes to your mind. Probably, there was something that users wanted to see in your product, even if it’s such a small thing as an additional button or a completely new layout of the site.

Price reduction 

Possibly the least harmful approach, it will help to keep your project afloat at any point in the product lifespan. By implementing a price reduction strategy, you can both resist your competitors and demonstrate that your project is valuable but not overpriced.  

To sum up

Whether you are only developing your digital product or already at some stage of the SaaS lifetime, you should constantly monitor the needs of your end users. Their requirements are your top priority to figure out how the market works and build a successful project.

If you want to learn more about specifics of marketing at the different stages, read our article about product life cycle strategies.

SaaS business
min read

SaaS Valuation: How to Boost the Value of Your Business Before a Sale

Software as a Service (SaaS) is an exciting industry that is packed with inexhaustible opportunities. When doing business with SaaS, it is critical to understand the way metrics utilized in SaaS valuations can boost the market value of your enterprise prior to a sale. 

This article covers the basics of SaaS valuations that apply to your business model.

How do SaaS businesses get valued?

It is quite common not to understand how investors attach value to a business. There are several factors that come into play before an investor arrives at their final assessment. These factors might not necessarily have anything to do with the size or rate at which the business has been growing. Check out the following to get a baseline understanding of which methods investors employ to value a particular company.

Seller Discretionary Earnings (SDE)

Seller Discretionary Earnings (SDE) formula

This is just another way to describe pre-tax and pre-interest profits that are calculated before the deduction of non-cash expenses, benefits of the owner, investments, and other costs.

Seller Discretionary Earnings go a long way in determining the value of a company. What this means is every seller should have an understanding of how SDE is calculated. This will contribute towards more accurate progress evaluation, and it will help you set definite targets when placing your business on the market.

When calculating profits, SDEs take into account the owner's salary as well. They give a clearer picture of the actual earnings currently running the company.

Interest, Taxes, Depreciation and Amortization (EBITDA)

Interest, Taxes, Depreciation and Amortization (EBITDA)

This method works for a company that has rather complicated ownership. The calculations are done in a straightforward manner. The information used to calculate EBITDA can be found easily on the business' balance sheet. The following are taken into account: 

  • Net income
  • Interest
  • Depreciation
  • Amortization

SDE and EBITDA are almost equal in value with the principal difference based on the fact that with SDE, the operations managers' earnings are also taken into account. EBITDA is often employed when working with companies valued above $ 5,000,000. 

Revenue method

What sets SaaS companies apart is that they often have to put forward a lot of upfront investment to boost growth. When making an evaluation with EBITDA, the upfront inputs are regarded as expenses. This is why it would be sensible when dealing with companies that are still growing to measure revenue as well. If a company is not growing at all, there will be no revenue to support the forecast and determine whether it's a good idea to purchase the business. This can be deemed an overvaluation.

Factors influencing how much a SaaS business is worth

The following has to be taken into account for one to have a general idea of whether or not a business is likely to be profitable. 

Operating History

Looking at a business retrospectively can allow one to assess whether or not the company has been profitable or not. This will enable them also to make an estimate of how much growth the business is likely to experience in the future. 

The Owner's Responsibilities

A lot of businesses depend on the input of their owners to a great extent. This means that their success or failure is directly proportional to the owner's competency. 

To avoid this, owners can set up their businesses to be independent by employing responsible personnel and qualified management. Employment of people who can execute the company's daily tasks with little or no supervision can allow the business to progress without depending too much on one person. 

Product lifecycle

Investors will be more interested in purchasing a SaaS business that profits from a product that is still in its growth phase as opposed to one that's been in the market for a long time.

Customer metrics

Investors use customer metrics to determine the quality and pattern of the business's revenue. It helps them decide when they can expect to start reaping the profits from their purchase.

SaaS metrics that matter

list of the most important SaaS metrics

Consider the following most commonly evaluated metrics in SaaS valuation for determining the multiple.

1. Customer Churn Rate

SaaS valuation: how to calculate customer churn rate

Customer churn refers to the speed at which customers cancel a subscription to a particular service. It is basically the rate at which a business loses customers. 

To come up with such a figure, you simply divide the customers lost within a given time period by the customers at the beginning of that period.

An example is as follows:

Number of customers at the beginning of January = 900

Name of the customer on January month-end = 850

Customer Churn Rate = (Customers on the first day of the month - Customers on the last day of the month) / Customers at the start of the month.

(900-850)/900 = 50/900 = 5%

If the customer church rate is low, then the particular business still has the potential for growth. The lower figure shows that the company is gaining way more customers than it is losing. This lowers the risk of value loss over time, which is a good indicator for investors. A business with a high customer churn rate would, therefore, not be preferable.

The majority of investors prefer a yearly rate that is under 10% for large SaaS businesses. This rate should ideally be zero for smaller companies owing to the fact that they are generally more susceptible to higher customer churn. That is to be expected since older businesses can invest more in customer retention when compared to smaller ones. 

2. Сustomer Acquisition Cost (CAC) and Customer Lifetime Value (LTV)

Customer Acquisition Cost (CAC) reflects how much it costs a business to acquire a new customer.

To calculate the figure, you have to get the sum of marketing and onboarding costs. You can then divide this sum by the total number of customers acquired over a given period of time. 

A quick example:

$10000 + $6000 = the marketing and onboarding cost, divide the figure by 400 new customers, and you have CAC = 40

Customer Lifetime Value (LTV) refers to the mean revenue gained from a single customer in a given period of time. 

The calculation is usually done as follows:

Gross margin per customer lifespan multiplied by retention rate / (1+ Rate of discount – Retention rate)

The gross margin refers to the average profits per customer calculated by taking into consideration how much revenue they brought in and how long they have been a customer. You can then factor in the percentage of customers who remain loyal to the business over a precise period (retention rate). Please note that you also have to take into consideration inflation at the typical 10% (discount rate).

Here is an example:

GML = $4200

Retention rate = 60%

Discount rate = 10%


1 + 0.6 – 0.1 = 1.5

We divide the retention rate of 0.60 by 1.5 to get 0.4

We can then multiply that by our GML of $4200.

CLV = 0.4 x 4200

CLV = $1680

The business will be considered a loss if it is churning out more funds to retain customers who are, in turn, not bringing in as much revenue. A business has to have a high return on investment, also known as ROI for investors to consider it a worthwhile investment. Return on investment will tell you if the customers you are acquiring are at all profitable to the business. It also gives you insights on whether or not your marketing strategies are working, and if not, what might need adjusting. 

CAC is closely linked with conversion rates. Conversion rates offer insight into the ROI in customer acquisition channels. It gives investors a general idea of the number of value customers attach to your products. 

3. Monthly Recurring Revenue (MRR) vs Annual Recurring Revenue (ARR)

In modern times, a lot of SaaS utilizes the subscription model, which is usually monthly or yearly. Because of this, Monthly Recurring Revenue (MRR) is often used also to value a business. It is the amount of income that companies make through their recurring client subscriptions. 

To calculate this amount, you just calculate the sum of the recurring revenue for a given month.

MRR = Σ Recurring Revenue for the specified month

The calculation below simulates a business with a 30-day subscription of $300. The service had 2 subscriptions in the month of January. An additional subscription was made in February, thereby adding to the existing MRR.

January: 300 + 300 = $600 MRR

February: 300 + 300 + 300 = $900 MRR

March: 300 + 300 + 300 = $900 MRR

Investors also take into account what is known as Annual Recurring Revenue (ARR). It is more or less like MRR but is measured on a yearly basis.

To calculate this figure, it's just a matter of adding up all the recurring revenue the business reeled in over a yearly period.

ARR = Σ Recurring Revenue

With MRR and ARR, you can then come up with an MRR/ARR ratio. It is also a critical piece of information. A lot of investors prefer that the MRR be more than ARR. While Annual contracts might quickly boost revenue, they do not give a clear picture when it comes to whether the business will keep making profits or not. Apart from that, a lot of companies offer annual subs at hugely discounted rates. If you add up subscription amounts of 12 months, they will sometimes double a single yearly subscription. With that in mind, you can see why a high MRR is more preferable to investors than a high ARR. 

4. Revenue Churn Rate

Investors will also take into consideration the percentage of revenue gained, otherwise known as the revenue churn rate.

To arrive at this figure, it is just a matter of dividing the initial MRR with the amount lost during the particular month. You should, however, not include any user upgrades when making this calculation.

The following is an example of a revenue churn rate calculation.

Initial MRR in the month of January = $600,000

MRR at January month-end = $500,000

MRR acquired from existing customers in upgrades = $40,000

Revenue Churn Rate = [(Start of January MRR  - MRR January month-end) - MRR gained from January upgrades] / MRR beginning of the month

(($600,000 – $500,000) – $40,000)/$600,000 =

($100,000 – $40,000)/$600,000 =

($60,000)/$300,000 = 2%

If the answer is a positive figure, it becomes a clear indication to the investor that the company in question made losses in that particular period of time.

How to increase the value of your business before a sale

There are a lot of factors that affect the value of a SaaS business, as seen in this article. The good thing is the majority of them can be easily regulated by the company in question. This much applies to metrics as well. How then does one go about increasing the value of their business to make it more appealing to investors?

Reduce Churn

how to reduce customer churn of your SaaS

As seen before, churn is quite an essential factor when it comes to SaaS business valuations. It would work in a business' favor if it can be reduced as much as possible in the period leading to a sale. Some of the factors that can be improved include boosting customer satisfaction and experience. This allows you to retain more of the customers that engage your business, and there creates some sort of a closed-loop. Apart from decreasing churn, this will also work in favor of your other metrics as well.

Maintain Documentation

It is crucial to keep a detailed record of the following:

  1. Up to date Accounting 

Always maintain clear and up to date accounting records and have them ready whenever you wish to make a sale. All investors will want to take a look at your accounting records first before you can negotiate a deal..

  1. Standard Operating Procedures (SOP)

If you were an investor, you would also likely want to be presented with clean and well-documented operations. This will indicate the order and seriousness with which the business is run. An organized company is definitely more appealing to investors. 

  1. Source Code

It is also essential to keep a well-documented source code as this will help those investors who have plans of scaling the business. This is quite important if the company is a startup.

Collect Customer Metrics

know your ustomer inscription

In modern businesses, customer metrics are the pillar of most successful enterprises. Every company should ensure that they have detailed customer metrics, as this will be an indication of just how strong the business actually is. There are several solutions that can be made use of to gather and analyze customer metrics. 

Outsource development and support

SaaS enterprises that have a higher potential for passive income usually fetch a market value than those that need active participation from the owner. This is why it would be beneficial for a business to outsource tasks and work closely with appropriate third parties like contractors if need be. This reduces the knowledge base needed by anyone looking to take over the business. Investors might not want to dig deep into the nitty-gritty of how a business is run. It should be a well-oiled machine that can run itself independently.

Hold off releasing new products

It is also essential to put a pause when it comes to launching new products if you are looking to make a sale. The reason is simple. Customers take time to warm up to a product, and by the time you want to sell, they might not be fully engaged; therefore, you won't be generating any profits from it. 

Secure Intellectual Property (IP)

Always apply for trademarks when it comes to intellectual property to make sure that your innovations are indeed the property of your business. This will also improve the value of the company. 

How to Sell a SaaS Business

There are four basic ways of selling your business.

Marketplace listing

There are a lot of networks that allow you to list your business for sale and attract interested buyers. This would be a good option if you fully understand the sale process since you might have to deal with the buyers on your own. 


Just like any other Auction, you can also have buyers bid for your business. The business will then be sold to the highest bidder. This is advantageous as it allows you to get a premium offer for your enterprise. You will, however, have to pay a listing and success fee to the auction service that you would have employed. This option is excellent if you have experience selling businesses.  

Hiring a broker

Brokers can help you to get a premium offer for your business. They will also handle most of the sale and ensure your IP, data, and other vital processes are secure throughout the sale proceedings.

To ensure that the process is smooth and quick, you should make available all the documents needed to make the sale. A broker will also charge their own fee, which is usually between 10% and 15% of the final sale.

Direct Selling

You can also choose to deal first hand with investors and buyers. While this might cost less in terms of services and other selling related costs, you need to be a very experienced seller. The process might also be prolonged. It is definitely the least preferred method of all, as there are a lot of risks involved in selling a business.

Over to you

Now that you are furnished with details about the valuation and sale of SaaS businesses, you can begin planning for a successful, timely exit strategy today by leveraging these insights. If need be, you can aslo hire the services of a professional to help you deal with your sale. All the best! Cheers to early retirement!

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