In an economy where most credit lines are being tightened or eliminated, vendors are becoming stricter about payment terms, and your customers are taking longer and longer to settle their invoices – cash flow is king. So for many small businesses, finding ways to minimize up-front costs and large investments is increasingly important to the survival and success of their company.

One way a small business can minimize up front costs is through using software as a service, or “SaaS”. Instead of purchasing software up front in a lump sum and having to put up the cash or finance it, small businesses can now purchase software through their IT service provider in a rented model. The software you need is typically stored on another offsite server and accessed via the Internet. By renting software on a monthly basis, your business can try different software to improve processes like finances, payroll, customer service, and sales without the financial risk.

Here’s a breakdown of how SaaS can help your business:

1. You Keep More Of Your Money – If you’ve ever had to purchase a piece of software to run your business such as a financial package, customer relationship management (CRM) software, or even a simple Microsoft Office application, you know how expensive of a proposition that can be. Before the software rental model of SaaS, if you needed certain software to operate, you were forced to plunk down hundreds or thousands of dollars to get it, not to mention pay exorbitant software support fees. Now, depending upon your needs, you can be up and running with a software solution for under $10/month / license or user.   

2. You’re Not Locked Into Something You Don’t Like – Because your IT company is paid monthly for the SaaS, the onus is on them to make sure their product works to the satisfaction of their clients. If you are not happy with the product, you have the option of simply moving on to another monthly fee solution that will work better for your needs. In most cases, your IT service provider can work with you to replace your software with a new solution that is right for you and continue to incorporate it into your monthly IT service agreement so you don’t have to worry about multiple bills. 

3. You Never Have To Think About Upgrades – Since the SaaS model is pay as you go, you automatically get any upgrades that come out for the software you use. You don’t have to set aside a budget for any additional software costs and you don’t have to worry about whether or not you are running the latest version; those things are typically already incorporated into your monthly agreement.

4. You Can Compete With The “Big Boys” – Some software applications are designed and written for large organizations and help companies to streamline many processes into one program. SaaS makes this level of software affordable and accessible to a small business owner and gives you a way to stay up with or ahead of your competition, even if your competition is a much larger company.

 5. You Can Have Access From Anywhere – SaaS software vendors typically host the application on their own servers so you have access to it over the Internet, don’t have to worry about buying additional hardware, and have a lower chance of downtime.