Human Resource Software has become an integral part of any organization's success. In today's world, businesses need to streamline their HR processes, manage employee data effectively and secure employee confidential information. That's where HR software comes into the picture. The Human Resource Software market is proliferating, with the industry expected to grow to $30 billion by 2025.

The exponential increase in subscription-based HR software services has made it a lucrative business model for SaaS providers. A subscription-based model helps HR software providers create a steady revenue stream while offering a range of HR software solutions to their clients.

In this blog post, we will provide a step-by-step checklist to open/start/launch a Human Resource Software on Subscription Business. Whether you are a first-time entrepreneur or an experienced HR professional, we've got you covered. Follow these steps to set up your Human Resource Software business on the right path.

Let's dive into the ten steps you need for a successful launch of HR software on a subscription-based business model:

  • Define the purpose of the business
  • Develop a business plan
  • Establish a financial model
  • Secure sufficient funding
  • Acquire the necessary permits & licenses
  • Research market conditions
  • Create a marketing plan
  • Source vendor services
  • Hire & train employees
  • Develop a customer retention strategy

Each step is essential to the success of your Human Resource Software Business. By the end of this blog post, you will know everything you need to do to start your HR Software business on a subscription model. You'll learn how to plan your business, how to market your products/services, how to select your team, and how to keep your customers happy.

Now, let's lay the foundation for a successful Human Resource Software business!

1. Define The Purpose Of The Business

Before launching a human resource (HR) software on a subscription basis, it is essential to define the purpose of the business. Why do you want to provide a HR software product? What are the specific needs of the target customers that the software should address? How will your software solve problems that are not currently being addressed by existing HR software providers?

Defining the purpose of your business will help you establish a clear direction and focus. It will also help you develop a unique value proposition that sets your product apart from others in the market. Consider the following:

  • What are the business goals of the HR software product?
  • Who will be the target customers?
  • What are the specific needs of these customers?
  • What problem will your product solve?
  • How is your product different from existing HR software providers?
  • What are the unique benefits of the HR software product?

Answering these questions will ensure that you have a solid foundation for your HR software business. By clearly defining the purpose of your business, you can create a product that meets the specific needs of your target customers and differentiates itself from existing providers in the market.

Key Tips:

  • Make sure that your purpose is realistic and achievable
  • Your business purpose should align with your core values
  • Ensure that your purpose is customer-oriented

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2. Develop A Business Plan

A business plan is a detailed roadmap for how your business will operate, grow, and achieve success. It's a critical tool for any entrepreneur, and it's especially important if you're starting a human resource software on subscription business. Here are the key chapters that you need to include in your business plan:

  • Executive Summary: This is a brief overview of your business and your plans for growth.
  • Market Analysis: In this chapter, you'll describe your target market and the competitive landscape.
  • Products and Services: Explain what your HR software will do, what features it will have, and how it will help businesses.
  • Marketing and Sales: Detail how you will promote your software and acquire customers.
  • Management Team: Introduce the key members of your team and their qualifications.
  • Financial Projections: Estimate how much money you'll need to start the business, how much revenue you'll generate, and when you'll break even.

Tips & Tricks:

  • Tip 1: Be realistic in your financial projections. Investors will want to see that you've thought through the costs and revenue of your business.
  • Tip 2: Conduct thorough market research to understand your target audience and what their needs are.
  • Tip 3: Clearly explain the unique benefits of your HR software compared to competitors.

Once you've completed your business plan, review it thoroughly and make sure it accurately describes your vision for the business. You should also consider seeking feedback from other entrepreneurs, investors, or advisors who can provide valuable insights and help you refine your plan.

3. Establish A Financial Model

Establishing a financial model is critical for the success of any business. It helps you make informed decisions, calculate costs, and forecast revenue. Here are some steps to help you establish a financial model for your human resource software on subscription business:

  • Start with your business plan: Your business plan should include a detailed description of your business, your target market, your marketing strategy, and your financial projections. Use this as a basis to create your financial model.
  • Calculate your start-up costs: This includes everything from office space, equipment, salaries, legal fees, and marketing expenses. Be realistic and allow for unexpected costs.
  • Forecast your revenue: Estimate how many customers you can attract and how much you will charge. Consider offering introductory pricing to attract more customers.
  • Set up a pricing strategy: Look at what your competitors are charging and evaluate what your software offers. Price it accordingly to attract customers and make a profit. Consider offering different pricing tiers to cater to different customer needs.
  • Establish your budget: Set up a budget that includes all your expenses and revenue projections. This will help you keep track of your finances and make informed decisions.
  • Monitor your expenses: Keep track of your expenses and adjust accordingly. Make sure you are not overspending and cutting costs where necessary.
  • Regularly update your financial model: As your business grows and changes, your financial model needs to be updated accordingly. Make sure you are always up to date to make informed decisions.

Tips & Tricks:

  • Get advice from a financial professional to ensure your financial model is accurate and realistic.
  • Regularly monitor your competition to ensure your pricing strategy stays competitive.
  • Consider offering annual subscription discounts to incentivize customers to sign up for longer periods.

Establishing a solid financial model will help you make informed decisions and keep track of your finances as you launch your human resource software on subscription business. Do not underestimate the importance of proper financial planning and budgeting - it could be the difference between success and failure.

4. Secure Sufficient Funding

When starting a human resource software on a subscription business, the first step is to secure sufficient funding. This will be necessary for developing and launching the system, as well as for ongoing operations and marketing. Here are a few steps you can take to ensure you have enough funding:

  • Research funding options: There are many different ways to secure funding for your business. Some options include loans, grants, crowdfunding, venture capital, and angel investors. It's important to research these options and choose the best one for your particular business.
  • Write a detailed business plan: Your business plan should include a detailed overview of your HR software, market research, revenue projections, and a clear plan for how you will use the funding you receive.
  • Prepare a pitch: Whether you're pitching to potential investors or applying for a loan, you'll need to prepare a compelling pitch. This should clearly explain your business, why it's unique, and why you're a good candidate for funding.

Tips & Tricks

  • Consider joining a startup accelerator program to gain access to funding and business mentorship.
  • Explore the option of bootstrapping your business, meaning self-funding through personal savings or profits from the business.
  • Don't be afraid to negotiate terms with potential investors or lenders. Be sure to thoroughly understand the terms of any financing agreement before signing.

By taking these steps to secure funding, you'll be setting your human resource software business up for success from the very beginning.

5. Acquire The Necessary Permits & Licenses

Acquiring the necessary permits and licenses is one of the most crucial steps in starting any business, including Human Resource Software on Subscription Business. This step involves obtaining legal approvals from the government to operate your business within the applicable laws and regulations.

Step 1: Identify the Necessary Permits and Licenses

You need to identify the specific permits and licenses required in your location and industry. This information is usually available from the government or relevant authorities. You should also consult with other entrepreneurs in your industry or a professional business consultant to ensure you are aware of all applicable permits and licenses.

Step 2: Research and Apply for the Permits and Licenses

Once you have identified the permits and licenses required, research their application process and deadlines. It is essential to adhere to any deadline to avoid unnecessary penalties or delays. The application process may involve completing forms, providing supporting documents or paying fees. Ensure you have all the required information and documentation before applying.

Step 3: Obtain the Permits and Licenses

After completing the application process, you need to wait for the approval of the permits and licenses before beginning operations. It's important to note that some permits and licenses may take longer to process than others, so patience is critical here. On receiving the licenses, ensure that you display them in a visible location in your office or public space, as required by law.

Top Tips & Tricks:

  • Ensure you apply for all the necessary permits and licenses as early as possible to avoid delays in starting your HR software business
  • Ensure you understand the specific rules and regulations guiding the permits and licenses required to avoid violating any laws.
  • Consider consulting with a legal or business expert to ensure strict adherence to the law.

6. Research Market Conditions

Before launching your human resource software on a subscription business model, you need to research the market conditions. This step is crucial because it determines whether your business idea is feasible or not and gives you an idea of how to penetrate the market.

Here are some chapters for conducting market research:

Chapter 1: Define Your Target Market

The first step in market research is to define your target market. You need to determine who your customers are, what their needs and pain points are, and how your HR software can help them. You can conduct surveys, focus groups, and interviews to gather information about your target market.

Chapter 2: Analyze Your Competition

It is essential to analyze your competition to gain insights into their strengths, weaknesses, and market strategies. You need to determine who your direct and indirect competitors are, what their pricing strategy is, and how you can differentiate your HR software from theirs. You can use online tools, such as Google, LinkedIn, and Glassdoor, to research your competition.

Chapter 3: Determine Your Unique Selling Proposition

Your unique selling proposition (USP) is what sets your HR software apart from your competition. It is essential to determine your USP because it helps you create a marketing message that resonates with your target market. You need to determine what makes your HR software unique, what benefits it provides to your customers, and how it solves their pain points.

Chapter 4: Determine the Market Size and Potential

You need to determine the size of the market to understand how much revenue you can generate. You also need to determine the potential growth rate and market trends to estimate the future demand for your HR software. You can use various online tools, such as IBISWorld, Statista, and Forrester, to gather information about the market.

Chapter 5: Develop a Marketing Strategy

Based on your research, you need to develop a marketing strategy that helps you reach your target market. You can use various marketing channels, such as social media, email marketing, content marketing, and PPC advertising, to create awareness about your HR software. You need to create a message that resonates with your target audience and use the right marketing channels to reach them.

Tips & Tricks:

  • Use online tools, such as Google Keyword Planner and Google Trends, to research keywords and search trends related to HR software.
  • Join online communities, such as LinkedIn and Reddit, to gather insights about your target market and understand their needs and pain points.
  • Partner with industry influencers and thought leaders to promote your HR software and reach a broader audience.

7. Create A Marketing Plan

A marketing plan is a crucial element for the success of a subscription-based service like a human resource software. The primary goal of the marketing plan is to create awareness about your product among your target audience and convince them to buy your service. Here are the 10 steps to create a marketing plan for your human resource software.

  • Identify your target audience: Before creating a marketing plan, it is crucial to identify your target audience. Understand their pain points, challenges, and requirements to create a compelling marketing message.
  • Create a unique selling proposition (USP): Develop a unique selling proposition that highlights how your human resource software is different from others in the market.
  • Analyze your competitors: Analyze your competitors to understand their strengths and weaknesses. Use this information to develop a marketing plan that highlights your strengths and offers a solution to your potential customers' problems.
  • Set your marketing budget: Determine your marketing budget and allocate your funds wisely to ensure that you can maximize your ROI.
  • Determine your marketing channels: Identify the best marketing channels to reach your target audience, such as social media, email marketing, paid advertising, or content marketing.
  • Create a content plan: Create a content plan that includes blog posts, guest posts, social media updates, videos, whitepapers, and case studies to attract potential customers.
  • Develop a lead generation strategy: Develop a lead generation strategy to attract potential customers and turn them into paying subscribers.
  • Create a sales funnel: Create a sales funnel that leads potential customers through the buying process, from the awareness stage to the decision stage.
  • Measure your marketing results: Use data and analytics to measure the effectiveness of your marketing campaigns and adjust your strategy accordingly.
  • Continuously improve: Continuously improve your marketing plan and adapt to new market trends, customer preferences, and changes in the industry.

Tips & Tricks

  • Focus on providing value to your potential customers through your marketing efforts instead of making a hard sell.
  • Use customer testimonials and case studies to showcase the effectiveness of your human resource software.
  • Partner with influencers or industry thought leaders to extend your reach and credibility in the market.

Creating a marketing plan may seem overwhelming, but it is essential to your success in the subscription-based industry. With a solid marketing plan in place, you can effectively promote your human resource software and attract potential customers who will become loyal, long-term subscribers.

8. Source Vendor Services

One of the key aspects of launching a successful human resource software on subscription basis is to source reliable vendor services. These vendor services would enable you to achieve the right level of efficiency and results in order to help your customers meet their HR needs. Here are some important steps to help you source the best vendor services:

  • Identify your exact needs: Before you begin your search for vendor services, it is important to identify your exact needs. Whether it is payroll processing, employee benefits administration, performance management, or any other HR function, it is important to ensure that your vendor meets all your specific needs.
  • Research potential vendors: Take time to research potential vendors and ask for references. Look for reviews and case studies to vet their capabilities and performance.
  • Compare multiple vendors: It is important to compare multiple vendors to make the right choice. Compare their features, pricing, contracts, and scalability, and ensure that you are getting the best value for your money.
  • Check for integration: Make sure that the vendor services you choose are compatible with your HR software. This will help to avoid any issues with data transfer and ensure seamless integration.
  • Verify security features: Ensure that the security features offered by the vendor are up to industry standards. This will guarantee the safety of your data and information.
  • Ensure good customer support: It is important to choose a vendor that offers round-the-clock customer service and support. This will help to address any issues and keep your HR software running smoothly.
  • Check for data backups: Make sure that the vendor you choose has a robust system in place for backing up all your data. This will help to avoid any data loss in case of a system failure or outage.
  • Take a trial run: Before you commit to any vendor services, take a trial run to test their features and functionalities. This will help you to determine if they best fit your specific needs and requirements.
  • Understand contract terms: Ensure that you thoroughly understand the contract terms before you sign up for the vendor services. Ask any questions and clarify any doubts so that you are aware of all the commitments and obligations involved.
  • Monitor performance levels: Once you have chosen a vendor and begun using their services, it is important to monitor their performance levels on an ongoing basis. This will help to ensure that they are meeting all your HR needs and expectations.

Tips & Tricks:

  • Take time to thoroughly research potential vendors: Investing the time to research potential HR vendor services will help you make an informed decision and choose the best provider for your business needs.
  • Be aware of hidden costs: When comparing prices between vendors, be sure to factor in any potential hidden costs, such as setup fees, training, or additional customization.
  • Establish good communication channels with your vendor: Establishing effective communication with your vendor will help you get the most out of their services and avoid any potential miscommunication or issues.

9. Hire & Train Employees

Once your human resource software on subscription business is up and running, it's time to focus on building a strong team to help you grow. Your team of employees will be the backbone of your business, and it's critical that you hire the right people and provide them with the necessary training to succeed. Here's a step-by-step guide to hiring and training employees for your human resource software on subscription business:

1. Define your hiring needs

  • Identify the roles you need to fill to run your business effectively.
  • Create detailed job descriptions, including necessary qualifications and experience.
  • Determine the appropriate compensation for each position.

2. Source & Attract Candidates

  • Post job listings on online job boards and LinkedIn.
  • Reach out to industry associations to find potential candidates.
  • Ask for employee referrals from your current team.

3. Screen Resumes & Conduct Initial Interviews

  • Review resumes for relevant experience and qualifications.
  • Conduct initial phone or video interviews to get a feel for the candidate's personality and fit.

4. Conduct In-Person Interviews

  • Invite top candidates for an in-person interview.
  • Prepare a list of interview questions that will help you assess their skills, experience, and fit.
  • Ask behavioral questions to get a sense of how they've handled situations in the past.

5. Check References

  • Contact professional references to confirm the candidate's work history and performance.
  • Check for any red flags or areas of concern that were not addressed in the interview process.

6. Make an Offer

  • Once you've identified the best candidate, make an offer that includes compensation, benefits, and the start date.
  • Be prepared to negotiate and discuss any concerns they may have.

7. Onboard & Train

  • Develop an onboarding plan to get new employees up to speed quickly.
  • Provide training on your product, customer support, and sales tactics.
  • Set clear expectations for performance and provide feedback regularly.

8. Maintain a Positive Work Culture

  • Create a positive work environment that values open communication, collaboration, and teamwork.
  • Recognize and reward employee performance to foster a sense of loyalty and motivation.
  • Encourage ongoing learning and development opportunities to help employees grow and progress their career.

Tips & Tricks

  • Provide a clear career progression path within the company to retain top talent.
  • Offer competitive salaries and benefits to attract high-quality employees.
  • Utilize software or tools to automate the hiring process and streamline candidate evaluation.

By following these steps, you'll be well on your way to building a strong team of employees that will help you grow your human resource software on subscription business. Remember to always prioritize candidate fit, training, and ongoing development to create a positive and productive work environment.

10. Develop A Customer Retention Strategy

One of the most important aspects of running a subscription business is retaining your customers. Without loyal customers, it can be difficult to sustain a successful business. Therefore, it is crucial to develop a customer retention strategy that keeps your subscribers engaged and satisfied with your product or service. Here are some steps to help you develop an effective customer retention strategy:

Tips & Tricks:

  • Communicate regularly with your customers: Keep your subscribers informed about updates, new features, and upcoming events. This can be done through email newsletters, social media, or in-app notifications. Make sure your messages are personalized and relevant to each subscriber's needs.
  • Offer loyalty rewards: Give your long-term customers extra perks and incentives to continue their subscription. This could include discounts, free upgrades, or exclusive content.
  • Provide exceptional customer service: Make it easy for your subscribers to get in touch with you if they have questions or concerns. Respond promptly and offer solutions that exceed their expectations.

1. Identify Your Key Metrics

The first step in developing a customer retention strategy is to understand your key metrics. This means identifying the data points that are most important for measuring subscriber engagement and satisfaction. For example, you might track metrics such as churn rate, lifetime value, or customer satisfaction scores. These metrics will help you understand how well your retention strategy is working and where you need to make improvements.

2. Understand Your Customer's Needs

Once you have identified your key metrics, it's important to understand your customer's needs. This means understanding what motivates them to subscribe to your service and what keeps them engaged. To do this, you can conduct surveys, interviews, or focus groups to gather feedback and insights from your subscribers. Use this information to create personalized experiences that meet your customer's needs and expectations.

3. Create a Seamless Onboarding Process

The onboarding process is a critical stage in the customer retention journey. This is where you set the stage for a successful and long-term relationship with your subscribers. To create a seamless onboarding process, make sure your sign-up process is simple and user-friendly. Provide clear instructions and tutorials to help your subscribers get started quickly. And offer personalized guidance and support to ensure a smooth transition.

4. Offer Personalized Recommendations and Content

To keep your subscribers engaged, it's important to offer personalized recommendations and content. This means using data and insights to offer personalized recommendations for products or services that are relevant to each subscriber's needs. And offering personalized content that reflects their preferences and interests. This could include targeted emails, in-app content, or social media messaging.

5. Provide Ongoing Support and Engagement Opportunities

Another key to customer retention is ongoing support and engagement opportunities. This means creating a support system that allows your subscribers to get help quickly and easily. And offering engagement opportunities that encourage them to stay involved with your brand. This could include events, webinars, or social media campaigns.

6. Continuously Measure and Improve

Finally, it's important to continuously measure and improve your customer retention strategy. This means regularly evaluating your metrics and making adjustments based on your findings. And testing new ideas and approaches to see what works best for your subscribers.


Customer retention is key to the success of any subscription business. By following these steps, you can create a customer retention strategy that keeps your subscribers engaged, satisfied, and loyal to your brand.

Starting a Human Resource Software Business on a Subscription Model can be a profitable venture, as the industry is slated to reach $30 billion by 2025. However, success in this field requires careful planning and execution of the ten essential steps outlined in this blog post.

By defining your business purpose, developing a solid financial plan, securing sufficient funding, obtaining necessary permits & licenses, researching market conditions, creating a marketing plan, sourcing vendor services, hiring & training employees, and developing a customer retention strategy, you can set your HR software business on the path to success.

Remember, each step is critical, and by implementing them successfully, your subscription-based HR software service can create a steady revenue stream while assisting businesses in streamlining their HR operations effectively.

So, why wait? Follow these ten steps and get started on building your successful HR software business on a subscription model.

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