Ever sign up for a free trial, then get burned when forgetting about the subscription by being hit with an automatic payment a month later? Turns out, it's quite a common scenario for small business owners, too, especially as Software-as-a-Service (SaaS) solutions become increasingly important to keeping a business up and running.
On average, today's small business (SMB) spends $15,000 every month on SaaS, according to Blissfully research. Forgetting to cancel a free trial — simply forgetting about a software subscription while monthly payments are still made — or leaving subscription login details for an employee that has left the company are only a couple symptoms of what analysts call "software fatigue," and Blissfully calculates that as much as 20 percent of small business software spend is wasted.
Yet, for the modern-day entrepreneur, starting a business simply cannot be done without some form of software.
"The characteristics of a successful business really haven't changed over the years, but the competition and pressure really [are] amplified," said CUE Marketplace President and Chief Operating Officer Sean Glynn. "So, having the right tools and software to run your business is more important than ever."
Glynn spoke with PYMNTS on the heels of CUE's announcement of a new solution, the CUE Business Dashboard. The solution presents a small businesses' array of SaaS subscriptions in one place, plus offers functionality for businesses to manage payments to those services and gain a quick overview of key business stats stemming from the software solutions they have in place.
The tool reflects the growing complexity of entrepreneurs' software needs, which Glynn said have been exacerbated by the explosion of choices business owners have today. Entrepreneurs, he explained, are struggling in a "sea of choices" and spend valuable time wading through them, conducting market research and determining which software tools have been ranked by researchers as the best solutions — and which have simply paid for higher rankings on market research sites.
Once they choose the software tools they want to use, however, the friction continues in the struggle to manage multiple platforms.
"When a small business owner thinks, 'Okay, I need to set up my accounting software, and I need to set up outbound email campaigns and Google Analytics,' if they feel like these tools are in a bunch of different places, then it becomes overwhelming," he noted.
Struggling to get a grip on all of their software subscriptions, small businesses are throwing money out the window. SaaS payments can be challenging in many ways, but one area that Glynn said is a top issue for entrepreneurs with many solutions in place occurs when a commercial card is lost or must be replaced.
"If your credit card is compromised or stolen or you lose it, you have to go to however many different, separate websites to update that payment information," he said, adding that subscription consolidation solutions like CUE allow businesses to manage their SaaS payments on a single platform.
These challenges are likely to persist so long as businesses keep subscribing to new cloud-based solutions. More recent research from Blissfully declared "no end in sight" for the small business software boom, either. There was a slight decrease in the growth of new SaaS subscriptions in 2017 among small businesses, which researchers attributed to possible consolidation of their solutions as business owners have looked for easier ways to manage all of their tools, but Blissfully also found that spending on SaaS continued to rise.
However, not everyone is on the SaaS train. Indeed, a separate survey conducted by FitSmallBusiness found that most small businesses aren't using software at all, with the most popular SMB software category — accounting — landing only a 49.8 percent adoption rate across the 293 survey respondents.
"For business owners that are a little more technology-averse, who have been running a business for a long time using some outdated methods that aren't necessarily based on software and digital tools, they're very difficult to get to move over into the modern day-and-age of running a business," said Glynn. He noted that CUE is looking to get in front of entrepreneurs who are just beginning to set up shop, and guide them in their SaaS decisions.
As the company progresses in that effort, Glynn said there are a few key software categories that are taking off. There are the usual suspects, like financial management, marketing and human capital management, as well as emerging categories like data security — a category that he expects to grow in importance for small businesses, though one that entrepreneurs may often overlook.
There is also the industry's movement toward integration. Glynn explained that CUE's solution aims to take advantage of the APIs offered by B2B cloud service providers, like QuickBooks, to leverage the kind of cross-functionality and data sharing possible to support a unified, streamlined view of business operations. But, he noted, there are limitations on such capabilities and solutions, as companies like CUE can only integrate as much as the software solutions allow.
As entrepreneurs' software (and investment) demands continue to rise, developers will likely have to meet those needs of integration — along with subscription payment management and enhanced SaaS use visibility — that small business owners call for today.