A Small Business Risk Management Checklist Every SaaS Founder Should Run Before Closing a Deal

SaaS is an incredibly profitable industry to be in, provided you can get your foot in the door, meet your deliverables, and keep clients happy. Still, rushing into agreements with clients is something so many new business owners do in the interests of securing business, but it’s a major risk if you don’t understand exactly what burdens you’re taking on, and under what conditions. 

Here are a few things you need to check thoroughly before you sign your name on the dotted line, and commit to months of work. 

1. Confirm What You’re Actually Liable for

Indemnification clauses and liability contracts make for dense reading material, but it’s a big mistake to sign any client contracts without understanding exactly what your responsibilities are, and what you would be considered liable for if something doesn’t pan out as expected. 

If not, you may agree to absorb major financial losses without realising it. 

2. Check Your Insurance is Sufficient

No SaaS company – or even independent consultant – should operate without proper insurance in place. While you may not be at high risk of causing injury or damage to your client’s property (which is what most of us consider insurance most important for) you are still providing a service and offering professional advice. For that, you need to be covered by errors and omissions insurance.

But it doesn’t stop there. You also need to cover yourself with general liability insurance and property insurance, since fire or flood could wipe out your ability to do business. You can take out BOP insurance in minutes, which combines the two into a single policy. 

3. Understand Who Will Own Your IP 

Any custom features or client-specific integrations need to be properly accounted for in your contracts. IP law is incredibly complicated, and you don’t want to end up in a dispute with a client about who owns what. That could easily undermine your reputation, and scupper any chances of acquiring new business in the future. 

4. Make Sure Your Security is Robust Enough to Handle Sensitive Client Data

Creating solutions for clients inevitably means having access to a significant portion of sensitive data. From financial information to customer or employee information, or even health data, you will be responsible for ensuring that you remain compliant and secure throughout your working relationship. 

A single data breach could cost you tens of thousands of dollars in fines – not to mention your reputation. 

Pentesting and red teaming are both essential steps here. You need to review your network security from every angle: human, and technical.  

5. Make sure payment terms won’t present a cashflow problem

This is particularly true for newer businesses, who need to make sure a steady stream of income is being generated to account for overhead. 

Beginning any work without understanding when you’ll be paid for it, or across how many months or installments, is a big mistake. You need to be sure about it – and sure that your client is on the same page, too.