Q What is SaaS, or Software as a Service?
A Software as a Service allows a pizzeria operator to rent software services from a provider on a recurring contract (usually monthly) as opposed to writing a big, fat check to purchase the product up-front. SaaS typically allows for a relatively low monthly payment, automatic updates and an easy cancellation policy if you’re not satisfied with the results. If you’re considering SaaS for your POS system, be prudent and dive into the details of the terms. Overall, this model works well when you manage it carefully, but if you’re juggling multiple subscriptions, your bank account might take an unexpected hit.
To maximize your ROI on these services, you first need to identify and make a list of all of the services to which you currently subscribe. Review them carefully to ensure that you still need those services and that you’re getting what you pay for. Be aware of automatic price increases and penalties for early cancellation. Finally, contact your accountant and make sure that each SaaS subscription is accounted for separately on your financial statements so you can track them regularly.
To get your money’s worth from SaaS, I suggest starting out by dedicating 3% to 5% of your net revenue to these services. Mix and match them until you’ve hit upon the perfect combination of benefits for your operation. For example, most new restaurants will focus on marketing and advertising services to boost cash flow; later, as the operation matures, they might move toward operational software subscriptions, such as back-of-the-house management. Each operator will have different needs, of course, so you’ll need to keep a close eye on the services you’re paying for and determine whether they’re giving you the proper return on your investment. Remember to drop the ones that aren’t paying off—there is no reason to keep paying for a service if you’re not actually using it!
SaaS can be a beneficial tool for marketing and managing your pizzeria, but you need a way to measure these services’ impact on your operation. If you cannot measure the results, then terminate the service!