In the 21st century, software development is in high demand. In the next decade, the software development field is expected to grow by 22%, which is a highly impressive growth rate compared to other industries.
While there are many software development businesses on the market today, the niche is always ready to welcome new players. If you are thinking about starting your own software development company, you can take advantage of the following professional tips.
1. Consider Funding
The search for funding is an integral part of starting any business, including software development. You have a choice of either sourcing a loan or entering a partnership. Both options come with certain pros and cons. Choosing the right one depends on your current financial situation.
In short, if you choose a loan, you are solely responsible for paying it off. However, you have full control of the revenue. By entering a partnership, you share the expenses and responsibilities. However, you have to share the revenue as well.
The basic costs to consider when starting your software development company are:
- Specialized software for development purposes
- Copyright, and trademark fees
- Salaries to employees
- Office space and equipment rental/purchase
Your funding option may also depend on the type of software development company you decide to run.
- Are you planning to create off-the-shelf software?
- Do you plan to offer software development services to other companies?
- Are you planning to offer SaaS options?
All three cases require different investments and funding.
2. Choose Your Team
Whether it’s a partner or employee, you need to choose your team carefully. Even if you are a solopreneur and plan to do the majority of development on your own, you still need assistance. When it comes to software development, it’s virtually impossible to do all the tasks without help and still meet deadlines.
At first, you may settle for hiring freelance developers. When working with freelancers on a contract basis, you can save money on salaries and benefits. However, you don’t get full control over their actions and risk missing important deadlines.
With time, you would need to hire dedicated developers. You’ll also need a finance expert to deal with billing, taxes, etc.
3. Get Your Software in Top Shape
If you are planning to sell a made product, you need to make sure that it is in top shape. This way you can ensure customer satisfaction and improve your reputation. Even if your app is fully ready to go, consider outsourcing testing to another company.
A separate quality assurance company can ensure high-quality and catch errors you may have missed. While it may be cheaper to test the product yourself, finding an experienced company that can take a fresh look at the program is always a good idea. Meanwhile, you can free up the time to focus on other tasks related to starting a business.
4. Create a Marketing Strategy
The key to your software company’s success is high-quality marketing. You don’t need to hire an in-house marketing department to get the job done. You can either outsource some of the tasks or do all the work yourself.
To build a solid marketing strategy, you need to study your target audience. Find out who your ideal buyer is and use this information to structure your marketing effort. You can start with building a website to promote your products and share information about your services.
Then you may want to invest a part of your budget into social media marketing, SEO, and paid search ads.
If you want to cut marketing costs but don’t have time to do the majority of the work yourself, consider hiring a freelance marketing expert.
5. Set Up Your Office
In the COVID-19 environment, many software companies don’t have an office. Software developers don’t have a problem working from home.
Even if you don’t plan to have a centralized location for your work and employees, you still need to invest in proper equipment. Company laptops are an essential investment that can ensure the security of your work.
While you may be 100% sure in your own security efforts, your employees may not be as careful. Make sure to teach them how to maintain proper data safety.
If you are offering a SaaS solution, you need to pay special attention to security. With cybercrimes on the rise, it’s imperative to take all precautions. A security slip up won’t just ruin your reputation but could lead to a lawsuit.
6. Get Insurance
No matter how small your software company is, it’s still a business. To protect your company as much as possible, consider getting business insurance.
When you start researching the subject, you’ll face different types of insurance depending on the risks you want to protect your company against. Start with general liability insurance. If your company has employees, obtain workers comp insurance.
Starting Software Development Business: Final Thoughts
Even if you already have a ready-to-go app, starting a software company can be complicated. Just like any other business, it comes with a variety of startup nuances like creating a business plan, choosing employees, obtaining funds, and much more.
While the majority of expenses is hard to avoid, you can cut costs by hiring freelance developers, marketing experts, and HR specialists. As your business grows, you can start hiring in-house teams.