If you’re looking for a business venture that’s bigger than a side hustle but not as big as a fully-fledged small business, you might want to consider starting a micro-SaaS business.
But can this kind of business be profitable?
It’s a question you’ll want to know the answer to before you begin your own company.
What exactly is a Micro-SaaS Business?
First off, you need to know what a micro-business is.
As mentioned in the introduction, it’s basically a business that’s smaller than a small business. But you should check out this post to learn more about “what is micro-business?”
A micro-SaaS business is, as you would expect, a software-as-a-service business that is run at the micro-business level.
If you’re not aware, SaaS is a delivery mechanism in which software is licensed on a continuous basis.
So, in a micro-SaaS business, you would essentially take the traditional SaaS business model and narrow it down. Instead of targeting a large audience, you would target a niche audience.
Check out this post to learn how to build a SaaS app.
Are Micro-SaaS Businesses Profitable?
Micro-SaaS businesses have been around for a while now, so you may be wondering how profitable setting up such a business can be in 2022.
Well, at the end of the day, there’s no reason why your micro-SaaS business can’t be successful as long as, like any other business, you put the time and effort into it.
To make your micro-SaaS business a success, you need to focus on two main things: your pricing strategy and your marketing.
With regards to the latter, you should follow common marketing strategies when you first launch your business. You can expand your marketing strategies as your business grows.
Common SaaS Pricing Models
Choosing the right pricing model for your SaaS business will make a huge difference in how profitable it can be.
While pricing strategies for your micro-SaaS depend on several factors, the most important elements are the type of product you will deliver, the type of audience you’re targeting, and the way in which your target customers derive value.
For instance, with regards to the latter, one target audience may be most interested in low costs while another may be willing to pay higher for a premium product or greater flexibility.
Here are the most common types of pricing models you can choose from.
Per User Pricing
A per-user pricing model in which your customer simply pays per user and pays more for each additional user is one of the most common and effective pricing models for a SaaS business.
Usage Based Pricing
Many customers look for a pay-as-you-go model. For example, if you were providing APIs, you could charge per API call.
Tiered Pricing
Another common approach is that of tiered pricing, in which you offer different usage limits and other features depending on the pricing tier the customer chooses.
If you go with this option, it’s best to have between three and four pricing tiers.
Flat Pricing
Flat pricing, in which you simply have the same fixed price for all customers and options, can be an effective pricing model to use at the beginning stages of your micro-SaaS business due to its simplicity.
Free Plans and Trials
It’s also a very good idea to offer free plans or free trials, especially in the early days when you want to drum up more customers.
When people engage with free trials, many are likely to sign up for a paid service after the trial comes to an end.
You can achieve the same with free plans.
Also, free plans are a great way of spreading the word about your company and growing your brand reputation, which can eventually lead to a highly profitable micro-SaaS business.
