We have heard about tech-enabled services for a long time. Old news.

In addition, saying the word technology no longer means anything… and of course, all service companies are tech-enabled. If you use email, you are freaking tech-enabled. The whole world is tech-enabled. We must also remember the best definition of technology is ‘the use of non-life to enhance life.’ I believe SaaS enabled is a new opportunity that service companies have a leg up on others to create.

Of course, Service companies are great vehicles for cash flow, healthy margins, and real people doing real work with deep expertise. That is hard to find on the next street corner as success begets success, and it takes time…there are no shortcuts to creating a great marketing agency, law or CPA firm, etc. It takes years of building and tends to burn out people because the customer always needs it tomorrow … or matter fact right now.

Typically, someone has to leave a service company to create a tool (IE software) that then gets sold back to the service company at a later date which solves the problem that caused the person to leave. In essence, the company that created the brain to solve the problem left the company and sold it back to them.

This narrative needs to be hacked.

So enough preamble.

The new dawn is here, and I believe it starts with a service company extending through their relationships via SaaS tools that either or all fit the below narrative:

1. Increases what they can charge for that service
2. Makes their services stickier
3. Lowers their cogs (IE time) to get the finished product done
4. Creates recurring revenue
5. Build a codification of internal knowledge that enables new team members to scale quickly
6. Takes the crap work off of people’s plates making them happier and thus lowering employee turnover
7. Increases enterprise value for the founders and hopefully their team too

I have long had a model for service companies based on Maslow’s hierarchy of needs for all IT things and their tools.

The ‘Self Actualization’ of professional service firms is bringing clients into the fold of productivity and value delivery. That means different things for different people but in the end, delivering value is at its core. How the sausage is made, no matter how efficient, is why someone entered the restaurant in the first place. They will pay the same, if not more, for something just as good when made more efficiently or conveniently.

So what are SaaS-enabled services?

In short, imagine a world where your customers get the value you deliver per standard. However, the way you get to the deliverable is more integrated with your clients’ standard workflow.

Here are two examples that I don’t think exist…yet:

1. Imagine you are a CPA firm for breweries only. Breweries are capital-intensive and usually have to take on debt to do what they do. This comes with bank covenants that almost certainly come with monthly or quarterly check-ins with the bank. The ratio of debt to assets and cash is a real thing. A brewery typically has an inventory cycle that in theory needs to be priced to market often…all of the ingredients are on the commodity market. What would it look like for that CPA firm to invest in a simple tool that daily updated grain, etc prices to market and created an adjustment on the balance sheet (Ie Quickbooks, or said GL tool) so that it could be reported on more accurately to the bank? It’s not just cash gone, but an asset in the warehouse that’s a tangible value to them and other breweries. So you get where that is going.
2. You are a marketing agency focused solely on real estate, namely multi-family and mixed-use properties. You are often hired to ensure the local area knows the property and drives sales through new leases by various marketing channels. Imagine a world where clients and capital groups get a platform for their properties. This is where their tenants get a value-added tool to post their specials, sales, special menus, book signings, and so on making it easy for local consumers to clearly understand the happenings and subscribe to learn of events, etc.  This would allow you a recurring revenue stream from your properties in addition to service revenue that layers on top. Of course, this also means property groups could consume your software without being a customer of the service company.

If you are in the business of solving a problem countless times, we believe you sit on the edge and are the best of the possible people to build the tool to do it at scale.