The global pandemic has impacted companies of every kind in extraordinary ways, which has led to incredible profits for some and ruin for others. This is particularly true for software-as-a-service (SaaS) businesses. An immediate example of this is Covid-19 restrictions, enforced by many states across the nation. To avoid the spread of the novel coronavirus, some states have kept shoppers and workers home, which has been great for companies that offer software teleconferencing, home delivery tracking, delivery services, and online commerce. Generally, that theme has helped accelerate the growth and acceptance of many SaaS offerings, as they require less face-to-to-face interaction; effectively leverage remote 3^rd party hosting platforms, and seed the implementation of new environments. However, even those considerable advantages cannot completely offset the negative effect of COVID for software-as-a-service companies that provide products that are related to point-of-sale transactions, travel accommodations, and restaurant management.

Even as COVID-19 vaccines provide relief and a “light at the end of the tunnel”, there is continued uncertainty with regard to pandemic restrictions and the future of businesses. At this moment, the rest of 2021 seems poised to present new issues and hurdles as unpredictable as the ones we faced in early 2020. For a SaaS company that seeks to not only survive but thrive during these challenging times, it is necessary to take conscientious, proactive actions. The following are important strategies that should be considered.

1. Reliability and Capability Should Be a Top Priority

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Whether a company is providing its own equipment to host or is otherwise using a third-party hosting service, it is necessary to be prepared to expand a business quickly. It is important to consider keeping servers at the capacity level that handles at least double the average load. SaaS vendors need to be able to increase servers further and on very short notice; after all that is essential to their value proposition. Moreover, SaaS vendors should have plans to obtain necessary funding, service agreements, equipment, and trained personnel.

When a service-level agreement exists with customers, like a 98 percent uptime guarantee, it is necessary to have competent IT personnel and hardware capacity available to meet these agreements when the company’s business increases. Companies regularly sabotage themselves when they take on new customers, yet attempting to update any hardware capacity comes as an afterthought.

Companies must remain cognizant of security concerns as they make plans to broaden their business. The large a company grows, it becomes more attractive to spies, hackers, and ransomware criminals. It is therefore very important to have active security monitoring systems as well as knowledgeable cybersecurity staff. Companies should only store minimum required amounts of customer information, ensure all of their information has been encrypted, and that every system is regularly checked for vulnerabilities and leaks. Fortunately most commercial host provides understand this requirement and have developed their data centers with optimal security measures that are reflected in their data center SOC II annual reports.  This sort of work can be outsourced to a reliable firm, but it should never be ignored. The legal and financial repercussions of a serious data breach can devastate an otherwise well-functioning company.

2. Companies Should Remain Adaptable & Open-Minded

When outside factors have caused a sudden drop in business, there are two viable options a company can take. Companies can either scale back and continue handling their business as usual or they can embrace the recent changes and prepare for an increase in business.

Here, we should consider the success of Zoom, a company that became triumphant overnight in the wake of the global pandemic. The nine-year-old company saw an opportunity to transform itself from an also-ran company in video conferencing to a social media platform. As lockdowns began, companies throughout the world found themselves in need to find better ways to communicate with employees and customers remotely. Similarly, the stay-at-home orders forced people to find better ways to get in touch with their loved ones. Zoom leveraged its ability to assist people in connecting with larger groups than its competitors. The company gambled on this opportunity and re-introduced itself with an updated user interface as well as a pricing plan, which included a free version that can host as many as 100 users simultaneously. This was a bold move for Zoom and it paid off for the company. Today, the company’s willingness to change and adapt to current times continues to pay off.

The global pandemic has offered companies around the world an opportunity to stay in touch with the world around them. The pandemic is a reminder that companies should always be willing and ready to take necessary, yet calculated risks. When a company is well prepared, it will be easier to recognize profitable opportunities that others can easily miss.

3. Companies Should Practice Financial Prudence

It is very easy for company leaders to get excited when their business revenue increases. Small-scale tech and SaaS companies are especially vulnerable to making the mistake of overspending because they tend to compare themselves to larger Silicon Valley companies that provide exuberant employee perks. Smaller companies can find it very tempting to expand their office space and provide their workers with amenities like gym memberships, catered meals, and even company cars. Although these perks are great, it is very important to remember that these types of fixed costs burn revenue. Companies should refrain from upgrading faster than they can increase their revenue. When there is no urgent need to make extravagant expenditures, many of these purchases can instead be made gradually.

Additionally, companies should also keep a check on their cash flow. This includes having adequate financial tools in place, like creating a 3 to 5-year forecast. This can allow companies to make strategic decisions when it comes to evaluating the impacts of their purchases. When there are fewer financial pressures, this does not mean companies should become lax about their spending.

4. Companies Should Remain on Being Customer-Service Focused

During challenging times, it is common to see customers become extra choosy and demanding as they become price-conscious. In difficult times, customers will also be more focused on receiving support and a level of security from the companies they do business with. Regrettably, there are far too many companies that fail to recognize the immediate need for amplified customer service during challenging times. Some companies will also make the terrible mistake of scaling back or even outsourcing their customer support staff. When seeking to increase a business, it is vital to ensure customers have a great experience with the company. Customers who are content with a company are not only willing to pay more and stay longer with a company, but they will also attract more customers.

An effective approach to making customers happy is to listen to them. This means that companies should proactively solicit customer feedback on their products and services. Companies should also make an effort to use their customer’s best ideas. Customers should be thanked for their feedback and recognized for their contributions to the company.

It’s Never Too Late to Get Your Company Prepared For the Future – Speak to a Reputable SaaS Attorney Today

Like the year 2020, 2021 is poised to be filled with uncertainty and surprises. When a company is prepared operationally, organizationally, and financially, their business will not only overcome the unexpected hurdles of the pandemic but they are also poised to come out stronger and more profitable than ever. As a company that services cloud-based computing, it is important to have a resilient SaaS agreement in place that can help your company grow during this challenging period. Speak to a reputable SaaS attorney who can help you address the special circumstances of the pandemic in key provisions on new or already-negotiated contracts.

Technology Attorney John P. O’Brien has handled a wide range of complex commercial and intellectual property litigation. Attorney O’Brien is well-versed in corporate transactions for companies of any size in the technology industry and tech-related space. As the Internet and technology continue to evolve and become an increasingly important part of our everyday lives, culture, and society, Technology Attorney John P. O’Brien continues to stay informed on the latest changes and developments. Consider contacting Attorney O’Brien today to schedule a consultation. Call (732) 219-6641 or complete the confidential contact form here.