In today's age of cloud computing and subscription-based models, accounting software for businesses has become an essential tool to manage finances. The use of accounting software not only saves time and money for businesses but also provides real-time data and insights to make informed decisions. According to a recent report by Allied Market Research, the global accounting software market is projected to reach $20.4 billion by 2026, registering a CAGR of 8.6% from 2019–2026. With such growth potential in the industry, starting a subscription-based accounting software business can be a lucrative opportunity.
However, starting a successful accounting software business requires a variety of factors to be taken into consideration. From conducting market research to developing a financial model, the process can seem daunting. But with the right plan and approach, you can launch a successful accounting software business in the subscription model. This article provides a comprehensive checklist of ten steps to help you start your accounting software business on the subscription model.
So, if you are an aspiring entrepreneur looking to launch an accounting software business or an established business looking to expand into the subscription model, this checklist is for you. Follow these ten steps to launch a subscription-based accounting software business successfully:
- Conduct market research
- Define a target customer audience
- Develop a business plan
- Develop a financial model
- Calculate startup costs
- Secure funding
- Obtain necessary permits and licenses
- Recruit a team and build an organization structure
- Develop a marketing and advertising strategy
- Launch and monitor the success of the business
Each step of the checklist is critical for the successful launch and operation of a subscription-based accounting software business. We will discuss each step in detail, providing you with the necessary insights needed to build a successful business. So, let's dive in!
1. Conduct Market Research
Market research is the foundation of any successful business venture. It involves gathering and analyzing information about your target audience, competition, and industry trends. By conducting thorough market research, you can gain valuable insights into the market demand, pricing, and customer behavior.
Before launching your accounting software on subscription, it is crucial to understand your target audience's needs and preferences. Start by identifying your potential clients' pain points, challenges, and goals. Once you have a clear understanding of your target audience, you can create a solution that meets their specific needs.
Conducting market research also involves analyzing your competition's strengths and weaknesses. Identify your direct and indirect competitors and research their pricing, features, and services. This information can help you create a unique selling proposition (USP) and differentiate your accounting software from the competition.
- Tips & Tricks:
- Create a survey to gather feedback from your target audience
- Use social media platforms to research your competition and industry trends
- Attend industry events and conferences to network and gain insights into the latest trends and innovations in the accounting software industry
Accounting Software Financial Model
2. Define A Target Customer Audience
Before launching an accounting software on a subscription-based model, it is important to determine your target customer audience. Without a clear understanding of who you are targeting, your product may end up not meeting the needs of your customers.
To define your target audience, consider the following:
- Demographics: Determine the age group, gender, education level, and income range of your potential customers.
- Industry: Identify the industries that would benefit the most from your accounting software.
- Size of Business: Determine the size of the businesses that would benefit the most from your software. Are you targeting small businesses or large enterprises?
- Geographical Location: Identify the geographical locations that would benefit from your software.
Once you have defined your target audience, tailor your marketing and messaging to appeal to them specifically. This will increase the chances of your product being successful.
Tips & Tricks:
- Consider creating customer personas to help further define your target audience.
- Surveying potential customers or conducting market research can also help in determining your target audience.
- Revisit and update your target audience as your company and product evolves.
3. Develop A Business Plan
Developing a business plan is one of the most crucial steps when starting any kind of business, including an accounting software on subscription model. A business plan acts as a roadmap for your business and helps you identify potential opportunities, threats, strengths, and weaknesses. Here are the essential chapters that should be included in your business plan:
- Executive Summary: This chapter should briefly introduce your business, it's structure, goals, target market, and products or services.
- Company Description: This section should give a detailed overview of the company's background, mission statement, and values. It should also discuss the key team members, their roles and responsibilities.
- Market Analysis: This chapter should analyze the competition, similar businesses, and potential customers. It should also discuss the demand for subscription-based accounting software.
- Services and Products: This section should provide a detailed description of the subscription-based accounting software, including its features, pricing, and benefits.
- Sales and Marketing Strategy: This section should outline your sales and marketing strategy. It should also discuss the pricing strategy, advertising, and promotion.
- Financial Projections: This chapter should present your financial plan for the business, including projections, cash flow statements, and balance sheets.
- Operations Plan: This section should discuss the operational aspects of the business, such as inventory management, customer service, and logistics.
- Risk Analysis: This chapter should identify potential risks for your business and discuss strategies to mitigate them.
Tips & Tricks:
- Keep your business plan concise and to the point.
- Use reliable data and research for market analysis.
- Be realistic with your financial projections.
Developing a business plan is a time consuming and detailed process, but it is a critical step in the launch of your accounting software on subscription model business. It can help you secure funding, identify potential challenges, and align your business goals with your target market and customer needs.
4. Develop A Financial Model
As an aspiring accounting software on subscription business owner, it is crucial to establish a financial model that outlines your revenue streams and expenses. This model will help you determine the feasibility and profitability of your business idea. Here are the key steps to develop a financial model:
- Identify revenue streams: Determine how your accounting software will generate revenue. Will you charge a monthly subscription fee? Will you offer additional services for a fee?
- Estimate market potential: Research the target market size and the estimated number of potential customers. Use this information to project your revenue potential.
- Categorize expenses: Identify the necessary expenses for your accounting software business. Examples may include software development costs, server and website hosting fees, employee salaries, and marketing expenses.
- Create financial projections: Develop a forecast of your revenue and expenses. Use this forecast to determine if your accounting software on subscription idea is financially viable.
- Review and refine: Continuously review and refine your financial model as your business evolves. Update your projections based on actual performance.
Tips & Tricks:
- Consider multiple revenue streams to diversify income.
- Be conservative with revenue projections and generous with expense projections to avoid disappointment down the road.
- Revisit and update your financial model regularly to ensure its accuracy.
By developing a solid financial model, you'll be able to determine if your accounting software on subscription business idea is viable and sustainable in the long term. Remember to be diligent and keep your financial information up to date as your business grows and evolves.
5. Calculate Startup Costs
Starting a new subscription-based accounting software business requires careful planning and an understanding of the costs involved. As a business consultant, I have helped numerous entrepreneurs navigate this process and launch successful businesses. In this section, I will outline the key steps to calculating your startup costs and ensuring the financial viability of your accounting software business.
- Identify your costs: The first step in calculating your startup costs is to determine all the expenses associated with launching your accounting software business. This includes everything from equipment and software to salaries and marketing expenses.
- Estimate your one-time costs: One-time costs include expenses that you will incur only once at the beginning of your business. This may include legal and professional fees, website development costs, and equipment purchases.
- Calculate your recurring costs: Recurring costs include ongoing expenses that you will need to pay on a regular basis. This may include rent, salaries, internet and hosting fees, and marketing expenses.
- Estimate your revenue: In order to determine your break-even point and when you will start generating profits, you will need to estimate your revenue. This may be based on market research, competitor analysis, and your pricing strategy.
- Calculate your cash flow: Finally, you will need to calculate your cash flow to ensure that you have enough money to cover your expenses until your business becomes profitable. This may involve getting a loan, securing investors, or bootstrapping your business.
Tips & Tricks:
- Be realistic: When estimating your costs and revenue, it's important to be realistic and conservative. Overestimating revenue or underestimating expenses can be a recipe for disaster.
- Consider outsourcing: Outsourcing certain tasks, such as website development or bookkeeping, can help you save money on salaries and overhead expenses.
- Prepare a contingency plan: Even with careful planning, unexpected expenses and setbacks can occur. Always prepare a contingency plan and set aside some extra cash in case of emergencies.
By carefully calculating your startup costs and estimating your revenue, you can ensure that your accounting software business is financially viable and set up for success. With the right planning and execution, you can launch a profitable subscription-based software business and achieve your entrepreneurial dreams.
6. Secure Funding
Now that you have a solid plan for your accounting software on subscription business, it's time to secure funding. Whether you're seeking a loan or investors, having a clear understanding of your financial needs and projections will be critical in securing the funding necessary to get your business off the ground.
Here are some steps to help you secure funding:
- Determine your financial needs: Before approaching potential investors or lenders, determine exactly how much money you'll need to start your accounting software on subscription business. This information should be based on your startup costs, projected expenses, and funding gaps that you'll need to fill.
- Prepare a solid business plan: A detailed business plan is key to securing funding. Your plan should outline your business goals, target market, competition, marketing strategy, and projections for revenue and expenses. Make sure to highlight the unique features and benefits of your accounting software on subscription business.
- Explore funding options: There are several options for funding your accounting software on subscription business, including loans from banks or the Small Business Administration (SBA), venture capital investors, crowdfunding, and angel investors. Research each option to determine which is best suited to your needs.
- Network and pitch your business: Attend trade shows and networking events to meet potential investors and lenders. Develop a compelling pitch that highlights the unique features and benefits of your accounting software on subscription business. Make sure to practice your pitch before approaching potential investors.
- Secure pre-orders: If possible, secure pre-orders for your accounting software on subscription business before approaching investors or lenders. This will demonstrate demand for your product and increase your credibility.
- Be prepared to answer tough questions from investors or lenders, such as how long it will take for your accounting software on subscription business to become profitable and what risks are involved.
- Consider offering equity in your business in exchange for funding. This can be a way to attract investors who are willing to take on more risk in exchange for a potential return on investment.
- Be persistent in your search for funding. It may take time to secure the resources you need to launch your business, but don't give up.
By following these steps and staying focused on your business goals, you can secure the funding necessary to launch your accounting software on subscription business and make it a success.
7. Obtain Necessary Permits And Licenses
Before launching your accounting software on subscription business, it is essential to obtain all necessary permits and licenses. This will ensure that you are operating legally, and you won't have to face any legal issues later. Below are the steps to obtain permits and licenses:
- Research what permits and licenses you need to operate an accounting software business in your area. The requirements may differ from one place to another.
- Apply for the permits and licenses required by your local government and follow all necessary procedures.
- Ensure that you have all the necessary documentation to support your application. This may include your business registration, tax ID number, and other relevant documents.
- After submitting your application for permits and licenses, wait for approval from the relevant authorities.
- Once your application is approved, display your permits and licenses in your workplace.
- Ensure that you renew your permits and licenses on time to avoid penalties and legal issues.
- If you are not sure of the permits and licenses you need, seek professional advice from a legal expert.
- Make sure to keep all your documents updated and organized.
By obtaining necessary permits and licenses, you'll be able to focus on growing your accounting software on subscription business without worrying about getting into legal trouble. So, take some time to understand what is required of you and follow all the necessary steps to ensure compliance. It is always better to be safe than sorry!
8. Recruit A Team And Build An Organization Structure
Recruiting a strong team is essential for launching an accounting software business on subscription. Finding the right team members that complement each other's strengths can help ensure success and create a solid foundation for future growth.
8.1 Define Roles And Responsibilities
Before recruiting, it's important to define the specific roles and responsibilities required for your business. Depending on the size of your business, you may need a mixture of accountants, software developers, customer service representatives, sales and marketing experts, and project managers. Clearly defining these roles will help you identify the specific talents you need and streamline the recruitment process.
8.2 Identify Ideal Candidates
Once you have defined the roles and responsibilities, you should create a clear job description for each position. This will help you identify the ideal candidates for each role. If you're not sure where to find candidates, consider reaching out to recruiters, posting job listings on job boards, or tapping into your personal and professional networks.
8.3 Conduct Interviews And Assess Skills
When interviewing potential candidates, make sure to ask questions that assess both their technical skills and their fit within your company culture. You may also want to conduct skills assessments or ask for work samples to verify their abilities. It's important to take the time to make sure you're hiring the right people for your team.
8.4 Build An Organization Structure
Once you've recruited your team members, you should build an organization structure that reflects the roles and responsibilities you defined earlier. Establishing clear reporting lines and decision-making processes will help ensure everyone understands their role within the organization. This will help create a more efficient and effective team and enable you to focus on growing your business.
Tips & Tricks:
- Consider using personality assessments to help you identify candidates who will fit well with your company culture.
- Don't overlook the importance of soft skills, like communication and collaboration, when assessing candidates.
- Build a training plan to help new team members get up to speed quickly and ensure they're equipped to do their jobs effectively.
By taking the time to recruit the right team members and build a solid organization structure, you can set your accounting software business up for success. With the right team in place, you can focus on creating a great product, delivering excellent customer service, and growing your business over time.
9. Develop A Marketing and Advertising Strategy
One of the most crucial parts of launching a successful accounting software on subscription business is developing a comprehensive marketing and advertising strategy. Here are some essential chapters to consider when developing your strategy:
1. Identify Your Target Audience
Before starting any marketing and advertising efforts, you must first identify your target audience. Your accounting software may cater to small businesses, large corporations, or even individuals. Knowing your target audience will help you tailor your messaging and approach to reach them effectively.
2. Determine Your Unique Selling Proposition (USP)
What makes your accounting software stand out from your competitors? Your USP should highlight what sets you apart and why potential customers should choose your software over others. Use your USP in all of your marketing and advertising efforts.
3. Set Marketing Goals and Objectives
Determine what you want to achieve with your marketing and advertising efforts. Your goals may include increasing brand awareness, generating leads, or driving sales. Make sure your goals align with your overall business objectives.
4. Develop Your Branding and Messaging
Your branding and messaging should align with your USP and target audience. Develop a brand concept, messaging, and visual elements like a logo and color scheme that resonate with your target audience.
5. Create a Marketing and Advertising Budget
Decide on a budget for your marketing and advertising efforts. Consider the cost of various tactics such as social media advertising, pay-per-click advertising, email marketing, and content marketing.
6. Choose Marketing and Advertising Tactics
Select the tactics you will use to reach your target audience. Consider the tactics that best align with your goals and budget. Remember to use your USP and branding in all of your materials.
7. Track and Measure Your Results
It's essential to track and measure the success of your marketing and advertising efforts. Use tools like Google Analytics and social media insights to track your progress towards your goals. Make adjustments along the way based on your results.
8. Evaluate and Adjust Your Strategy
Evaluate the effectiveness of your marketing and advertising strategy regularly. If certain tactics aren't achieving the desired results, adjust or remove them from your strategy. Continue to improve your strategy based on your results.
Tips & Tricks:
- When developing your USP, consider the benefits of your software to your target audience. What problems does your software solve for them?
- Use social media to reach your target audience effectively. Determine which platforms your audience uses the most and create targeted ads and content for those platforms.
- Consider offering a free trial or special discount to new customers to encourage them to try your software.
10. Launch And Monitor The Success Of The Business
Opening an accounting software on subscription business may seem like a daunting task, but with proper planning and implementation, you can successfully launch and monitor the success of your business. As a pro business consultant, I have helped start and run thousands of businesses, and I have put together this checklist of how to open/start/launch an accounting software on subscription business in 10 steps:
- Step 1: Conduct Market Research
The first step to launch a successful accounting software on subscription business is to conduct market research. You need to gather information about your potential customers and their needs. Determine what your competitors are offering and how you can differentiate your product from theirs. You need to identify your customer base and create a marketing plan to reach them.
- Step 2: Identify Your Target Market
Once you have conducted your market research, you need to identify your target market. You need to determine who your potential customers are, where they are located, and what their needs are. This information will help you tailor your product to meet their specific needs and create a marketing plan to reach them.
- Step 3: Develop a Marketing Plan
With a clear understanding of your target market, you need to develop a marketing plan. This plan should include the marketing channels you will use to reach your customers, the message you will convey, and the budget you will allocate for marketing.
- Step 4: Build Your Accounting Software on Subscription Business
The next step is to build your accounting software on subscription business. You need to create a user-friendly software that meets the specific needs of your target market. You need to test your software thoroughly to ensure it is functioning correctly and meets your customers’ needs.
- Step 5: Develop a Pricing Model
You need to develop a pricing model that works for your target market. Your pricing model should take into account the features and benefits of your software, the competition, and the value it provides to your customers.
- Step 6: Create Payment Gateways
You need to create payment gateways that your customers can use to pay for your software. Make sure that you offer multiple payment options, including credit/debit cards and PayPal.
- Step 7: Launch Your Accounting Software on Subscription Business
Once you have developed your software and pricing model and created payment gateways, you are ready to launch your accounting software on subscription business. You need to create a launch plan that includes a launch date, press release, email campaigns, and social media presence.
- Step 8: Monitor Your Success Metrics
You need to monitor your success metrics to measure the success of your business. This includes tracking the number of customers, revenue, churn, and customer satisfaction. You can use these metrics to identify areas for improvement and make necessary changes.
- Step 9: Adapt and Improve
Based on the feedback you receive from your customers and the insights gathered from your success metrics, you need to make necessary improvements to your software, pricing model, and marketing plan. Adapt to the changing needs of your customers and the market.
Tips and Tricks:
- Tip 1: Set realistic goals and track your progress.
- Tip 2: Create a strong brand identity and voice.
- Tip 3: Hire a dedicated support team to provide excellent customer service.
- Step 10: Celebrate Your Success
Finally, celebrate your success. You have worked hard to create and launch your accounting software on subscription business. Take the time to acknowledge your hard work and pat yourself and your team on the back for all of your efforts.
In conclusion, starting a subscription-based accounting software business requires careful planning and execution. By following the ten-step checklist provided in this article, you can ensure that you are on the right track towards building a successful business. Remember to conduct thorough market research, develop a solid business plan and financial model, and obtain the necessary permits and licenses. Additionally, a strong and experienced team, coupled with a well-thought-out marketing and advertising strategy, are essential for the success of your business. With the global accounting software market set to reach $20.4 billion by 2026, there is plenty of potential for growth and profitability in this industry. Start today and take advantage of the opportunities that the subscription-based accounting software model has to offer.
- 5-Year Financial Projection
- 40+ Charts & Metrics
- DCF & Multiple Valuation
- Free Email Support