Shut Down Your SaaS?

Should you shut down your SaaS business?

It’s a question that none of us want to ask, but sometimes, it’s unavoidable. 

You started building your SaaS with energy, enthusiasm, and boundless optimism, but right now, you’re wondering if your business can survive until the end of the year, or even the end of the month.

It may look bleak, but we’ve got good news. There is hope for your SaaS. With a shift in perspective and the way you do business, you can save your SaaS from certain doom. 

Let’s get started.

Why Do So Many SaaS Startups Fail to Thrive?

Before we discuss how to save your SaaS, let’s take a look at the most common reasons why startups fail. It’s important to identify your vulnerabilities so that you know how to course-correct.

1. No market need 

Finding the product-market fit is the most important thing you can do. Unfortunately, many founders create a product that no one actually asked for. Your intended customers may need it, but if they don’t know that they need it, and there’s no demand for it, then they won’t buy it. 

Your number one step should always be validation. Is there a current demand for your product? (Hint: If you have competitors who are performing well, there is demand for your product.)

2. No cash

A lot of SaaS shut down because they can no longer remain solvent. This often happens to overly ambitious founders who haven’t adequately prepared for the lean period. Depending on your business, it may be 12 months or longer before you turn a profit. It’s important to calculate your cash runway (which is your total cash reserve divided by your burn rate).

Shut Down Your SaaS?

3. Wrong team

At its core, your business is one person helping another person. Everyone on your team should have empathy for your target audience because relatability matters. Hire for this.

Far too many SaaS close because they’ve hired the wrong people. While they may be capable of doing the job, they may not appropriately represent your brand.  

4. Can’t compete

Are you in a crowded market? If you have a lot of competitors, it may be difficult to differentiate your SaaS. This is where a lot of companies get stuck. Instead of trying to compete with a ton of others, you should narrow the playing field by niching down.

5. Bad pricing

The worst way to compete is by price. While you should know what your competitors charge (for market research purposes), don’t try to undercut their prices in an attempt to get more customers. This eventually leads to failure. Charge based on the value that you provide. Besides, the customers who are lured in by low prices are often high-maintenance and will put a strain on your resources.

6. Bad UX

UX stands for user experience. Your customer’s experience in your app matters. You know your app like the back of your hand but, if it’s not intuitive, your customers may have difficulty accomplishing their goals. A negative customer experience is one of the biggest contributors to churn and that eventually leads to an unsustainable UX.

7. No business plan

It’s madness to create a business without a plan, yet this is one of the most common reasons why SaaS businesses fail. To protect against failure, you need to draw a roadmap for your business year ahead, and get specific about your goals, timeline, and marketing strategy.

8. Lack of marketing/ Wrong marketing

Speaking of marketing, you need to market your SaaS. Just building it is not enough. That may have worked 20 years ago, but because there’s growing competition across every industry (which is a good thing), you’ll need to do everything you can to get in front of your target audience. Otherwise, how will they know that you exist?

9. Not nurturing customers

Once you have customers, don’t forget about them. So many SaaS are so focused on acquisition that they forget all about retention. Retention is more important than acquisition because it costs more to find customers than it does to keep them. 

How Do You Know When It’s Time to Cut Down?

Not sure whether it’s time to shut down your SaaS? It all boils down to one simple question: 

Do you have at least 5 paying customers?

If you have 5 paying customers, don’t give up. This is proof of life. It may not be the multiplied thousands that you’re dreaming of, but it’s a start—a good start.

But there are some qualifiers. These paying customers should not be people who you know or people who you’ve actively prospected. Instead, they should be people who’ve found you organically or through your inbound marketing tactics. 

If you have 5, you’re alive, and you can proceed to the next step. 

(If you don’t have 5 customers yet, still keep reading. The following tips may help you get your business on track.)

Here’s a list of cost-cutting tips for your SaaS business.

How to Revive Your Business 

Here’s what you should do before closing your business for good.

Find a Smaller Niche

If you’re not specializing, you’re missing an opportunity to find your true audience. 

Evaluate your current customers. Who do you have now? What do they have in common? This may indicate the niche that you should belong to.

For example, instead of targeting all freelancers, why not target wedding photographers specifically? Sure, the target audience is smaller, but your messaging can be more personalized. 

Go smaller.

Shut Down Your SaaS?

Research Your Target Audience

Find out everything you can about your target audience, including who they are, what their pain points are, their hesitations, and what motivates them to buy. Create a buyer persona so that you have a deeper understanding of your audience. You can build from that foundation.


When you find the right niche and have a good handle on your target audience, your next move is to brand yourself as that group’s champion. With that in focus, rethink your mission and vision. You may also need to tweak your values. Then, create a brand identity that will connect with your target audience. 

Evaluate Your Pricing Model

Now that you’ve rebranded, you may need to change your pricing model. There are six common pricing models to choose from, depending on several factors, such as your average customer lifespan. Check out this post for a more in-depth guide on choosing the right SaaS pricing model.

Define What Makes You Unique

What separates your business from the pack? 

While you may have a similar product, you can be unique in your approach to customer service or in your transparency, or in the way that you serve your community. Be sure to tell your target audience exactly how you’re different. This is another way that you can connect with your prospective customer. 

Improve Your SEO Game

If you’re on the brink of shutting down, you may not have the resources to cold call or do other outbound marketing strategies, such as search engine marketing. But, you can invest in content. Content marketing can play a huge role in attracting prospective customers to your SaaS. 

Now’s the time to build up your blog. Create at least 10 posts that match what your target audience is searching for in Google which you can then tie back to your product. That’s a great start. Don’t forget to start your email list so that you can continue to nurture your prospective customers via their inbox.

Final Thoughts

Don’t give up. And don’t compare yourself to other SaaS. Sometimes, it takes longer than you think to become profitable. However, if you have a few customers, you will be able to build on that foundation and get even more customers using the above tips.

Before you go, check out these related posts:

Don’t forget to download this list of 10 cost-cutting tips.

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