When does a start-up stop being a start-up and when should you scale a SaaS business?

If you’re an entrepreneur, it’s a question you’ll hopefully be in the position to ask yourself at some point. If you think what stage of the life cycle you’re in doesn’t matter, then you’re likely to make a costly mistake: scale too soon when you don’t have the revenue to support the growth – or scale too late and miss out on early potential gains. 

There are generally four stages in the SaaS life cycle: Pre-Startup, Startup, Growth, and Maturity. So, when should you start scaling a SaaS business?

During the pre-startup phase, focus on creating the best product you can offer. Identify the problem that your software intends to solve and be honest with yourself about whether it solves that problem. Could it do better?

You might think that now that you have a product and are entering the startup phase, it’s time for growth. But you’re not there yet. During the startup phase, focus on finding the perfect market fit for your product. Build the rock-solid foundation for your next phase. 

Now that you’ve found your market and hopefully gathered a customer base of passionate, loyal customers, you’re ready to move into the growth stage. You have a solid product and proven data that people want, so it’s time to shift from revenue growth to profitability – the thing that separates scrappy startups from established titans. How do you make the growth stage as successful as possible? 

Focus on aggressive customer acquisition, start to seek out Series A funding, and have an established and repeatable sales process. Of course don’t forget that as your business grows, you’ll need to invest in scaling improvements on the back-end.

Are you scaling a SaaS business? As your company grows, so do your finances. You don’t have time to spend hours with your books. Contact us today.