When setting up or running a B2B SaaS business, you’re undoubtedly focused on the most apparent costs—server fees, salaries, and marketing budget.
However, lurking beneath these regular expenses are hidden costs that can silently swallow up your profits.
Worried about these costs? I’ve got you covered!
7 Overlooked B2B SaaS Costs You Must Know
In this guide, I’ll unveil the seven most overlooked B2B SaaS expenses, ensuring you’re prepared for every financial twist and turn.
1. Technical Debt
Ever heard of the phrase “quick and dirty”?
It might seem tempting to go down this route, especially during the initial stages when the goal is to launch swiftly.
But here’s the deal:
Cutting corners in development leads to what we call “technical debt”.
At first, it’s all smooth sailing. But, over time, this debt piles up, causing slower product iterations, more bugs, and ultimately, higher costs to fix those issues.
Think of it as paying the minimum on your credit card debt—it’s manageable until it isn’t. So try not to get caught in this trap.
2. Onboarding and Training Costs
It’s always thrilling hiring a new team member, isn’t it?
But, here’s a truth bomb:
If you’re not investing in proper onboarding and training, you’re racking up hidden costs.
Poorly trained employees can lead to mistakes, low productivity, and even increased turnover.
A single error from a misinformed employee can lead to customer dissatisfaction, or worse, lost contracts.
Put simply, an ounce of prevention (i.e., “training”) is worth a pound of cure.
3. Churn Rate and Customer Acquisition Costs (CAC)
We all want new customers. But did you ever stop to think about the true cost of acquiring them?
Here’s a fact:
A high churn rate can erode those gains.
It’s a tricky balance. You might be celebrating 10 new sign-ups but lamenting 8 cancellations.
While it’s essential to focus on getting new customers, retaining them is just as crucial. One way to achieve this is by understanding your billing patterns. Thankfully, the Younium SaaS subscription billing guide is jam-packed with all the information you need.
Remember, it’s always cheaper to keep a customer than to find a new one. Every lost customer means an increased cost to replace them.
4. Compliance and Regulation Costs
I get it—compliance is difficult.
But guess what’s even less appealing?
Fines, penalties, and legal battles. According to SmallBusinessHQ, a Incfile alternatives agency helps you to avoid these penalties by compiling all required terms and conditions.
Operating in the B2B SaaS space means dealing with a myriad of regulations, especially if you’re handling data.
It might seem like a cost-saving move to delay these compliance measures. But when (not if) complications arise, the financial implications can be staggering. Being proactive about compliance isn’t just good ethics—it’s smart B2B business.
5. Third-Party Integration Costs
“We integrate with X tool!”
A selling point for many, right? But, every integration comes with its costs.
Maintenance, potential failure points, and even the costs of integration itself can creep up on you.
Imagine your SaaS tool facing an integration issue with a popular CRM tool. Not only do you bear the cost of fixing it, but you also risk reputation damage and client frustration.
6. Hidden Support Costs
Let’s be honest—no product is perfect.
There will always be a hiccup, a query, or an unexpected glitch. And for these, your users will need support.
And even with the best team, your customers might still face billing issues.
Sounds like a situation you’ve experienced, doesn’t it? I’ve been there too. Unfortunately, many B2B SaaS businesses overlook the cascading cost of customer support.
And it’s not just about hiring more support staff. It’s the training, the tools, and the time spent resolving recurring issues that could’ve been prevented.
An effective way to combat this is by investing in proactive measures like comprehensive documentation, self-help tutorials, and community forums.
You should also use subscription management tools that are the right fit for your business. Selecting the right tool can help improve customer experience and reduce support costs. Here’s a list of the best ones in the market by Attrock to help you make the correct choice.
7. Infrastructure Overheads
When we hear ‘SaaS’, we often think of software. But behind that software are tangible infrastructure costs. This includes server costs, data storage, backup solutions, and even mundane things like office space for the team if you’re not fully remote.
What’s more, as your user base grows, so does the demand on your infrastructure. If you’re not optimized, you can find yourself paying significantly more than necessary, especially if you’re utilizing cloud services that charge based on usage.
Always ensure you’re periodically reviewing and optimizing your infrastructure costs to get the best bang for your buck.
Work Towards Keeping Your B2B SaaS Costs Low
The B2B SaaS journey, as thrilling as it is, comes with its unique set of challenges and costs.
As entrepreneurs, we’re accustomed to expecting the unexpected. But by keeping an eye on these often-overlooked costs, you’ll be one step ahead, ensuring your venture isn’t just innovative but also financially savvy.
So, gear up, review those balance sheets, and prepare for success with a clearer vision in mind.