IT is the preferred sector for business creators in France: 1 in 5 new businesses is in digital. But behind this figure lie very different realities. Creating a 3-person IT services company, a solo SaaS, or a web agency—these are not the same business.
Here's the honest comparison.
Model 1: The IT Services Company (formerly IT Staffing)
The principle
You recruit developers, place them on projects at clients (staff augmentation), and invoice a daily rate higher than their salary cost. Gross margin is the difference.
The numbers
- Daily rate billed to client: €500-700 (experienced profile)
- Loaded salary cost per employee: €300-400/day
- Gross margin per consultant: €100-300/day
- Typical net margin: 8-15% of revenue
For a 5-consultant IT services company billed at €550/day, 220 days/year:
- Annual revenue: ~€605,000
- Net margin: ~€60,000 to €90,000
The advantages
- Proven model, understandable to banks
- Recurring revenue (projects of 3 to 12 months)
- No heavy R&D
- Linearly scalable (each consultant added = additional revenue)
The difficulties
- Permanent recruitment (the lifeblood of the business)
- Gaps between projects: a consultant without an assignment costs €300/day while generating nothing
- Dependence on large accounts and their budget cycles
- Low margin if you're not rigorous with management
- Fierce competition (there are over 30,000 IT services companies in France)
The trap
Many IT services company founders are former employees who think "the client was paying €600 a day, might as well keep the margin." Except the employer was also paying for sales, HR, managing gaps, legal, accounting, offices, and absorbing the risk. The net margin of an IT services company is rarely what you imagine.
Model 2: SaaS
The principle
You develop software sold by monthly or annual subscription. Heavy initial investment (development), then recurring revenue with near-zero marginal cost per additional customer.
The numbers
- Average ticket: €30-500/month depending on target (SMB vs mid-market vs enterprise)
- Customer acquisition cost (CAC): €100-2,000 depending on channel
- Acceptable monthly churn: 2-5% (SMB), 0.5-2% (mid-market/enterprise)
- Break-even: typically 18 to 36 months if the product finds its market
For a B2B SaaS at €99/month with 200 customers:
- MRR (monthly recurring revenue): €19,800
- ARR (annual recurring revenue): €237,600
- Potential net margin: 40-70% once development costs are amortized
The advantages
- Exponential scalability (every investor's dream)
- Recurring and predictable revenue
- High company valuation (5-15x ARR for the best SaaS)
- Ability to work from anywhere
The difficulties
- Maximum risk: 90% of SaaS fail
- Negative cash flow for 1 to 3 years (you develop before you sell)
- Multiple skills required (development, design, marketing, support)
- Product-market fit is a difficult grail to find
- Competition is global, not local
The trap
The developer who codes for a year in their basement without ever testing their product on the market. When they launch, nobody wants it. The golden rule of SaaS: sell before you code. If you can't find 10 people willing to pay for your idea, it probably isn't worth 12 months of development.
Model 3: Direct Services (Web Agency, IT Consulting)
The principle
You sell your expertise directly to end clients: website creation, custom development, digital transformation consulting, cybersecurity, managed IT services.
The numbers
- Direct daily rate (no intermediary): €400-1,000 depending on specialty
- Realistic billing rate: 60-70% of time
- Solo revenue: €60,000 to €130,000/year
- Solo net margin: 40-60%
For a 3-person agency (founder + 2 developers):
- Annual revenue: ~€350,000
- Net margin: ~€70,000 to €100,000
The advantages
- Quick start (no R&D, no initial hiring)
- High margin (no intermediary)
- Direct client relationship (satisfaction, loyalty)
- Total flexibility (choice of projects, technologies, pace)
The difficulties
- Not scalable without hiring (your time is the only resource)
- Permanent business development
- Risk of dependency on one or two large clients
- Difficulty taking vacations (the client is waiting)
The trap
Remaining an indefinite freelancer in disguise. If you want to build a real business, you eventually have to delegate production and spend time on sales and strategy. The transition from "I do everything" to "I manage a team that does" is the most difficult milestone.
Which model should you choose?
| Criterion | IT Services | SaaS | Direct Services |
|---|---|---|---|
| Initial investment | Medium | High | Low |
| Risk | Medium | High | Low |
| Scalability | Linear | Exponential | Limited |
| Net margin | 8-15% | 40-70% (at maturity) | 40-60% |
| Key skills | Recruitment, sales | Product, marketing | Technical expertise, client relations |
| Financing needs | Yes (payroll) | Yes (R&D) | No |
Most IT entrepreneurs combine these models: direct services to generate cash, and develop a SaaS in parallel funded by services. This is the most pragmatic approach.
The best model is the one that matches your skills, your risk tolerance, and your ambition. Not the one that's in fashion.