Own software company

Register Now. Feb 06, 11 min read. Boris Shiklo. Shane Hastie. So, you have an idea to start up with. Indeed, it looks like you have the idea. But is an insight, even the brightest one, enough for success? This question gives rise to a bunch of other questions. Do I have any chances to succeed without huge startup funds and experience?

Do I have to be a software developer myself? What are my first steps? Follow our guide and learn how to establish a software development company step by step. The first thing you should do before starting a software development company is conduct market research. Identify your major competitors, target audience, their needs and preferences.

Analyze the stage you are entering the market in: introduction, maturity, or decline. Uncover emerging trends and practices from domain experts. In , Airbnb, Inc. The idea was to allow tourists to rent lodging from local citizens. At first, investors were reluctant to pour money into this project because of the widespread belief that few people would want to rent their apartment to strangers.

However, the company was founded during the Great Recession, when people urgently needed extra money, which contributed to the service popularity. Now, the website has more than million guests and covers more than countries. Launched in , Uber Technologies Inc. They developed an application that enables users to book drivers who use their own cars.

The service satisfied both drivers in need of extra money and passengers who wanted cheap rides. Now, the service operates in more than 83 counties and cities worldwide. So, Uber and Airbnb managed to come up with fresh ideas right when the market needed them most.

But sometimes great ideas appear way too early. An online entertainment company Z. Although it received enough funding and was based on a great business model, the company went out of business in The reason for it was that the founders did not take into account that broadband penetration was extremely low in , making it too hard for users to watch video content online.

As you can see, Z. For instance, Kaltura, Inc. Instead of covering the whole market, the founders decided to target several sectors, such as enterprise, education, and media.

An opposite tactic can also bear fruit, if thought out carefully. Masquerade Technologies, Inc. The application allows users to change their look selecting a filter mask or an effect from the library and then share it with their friends on Facebook and Instagram.

Although developed in Eastern Europe, this application quickly gained popularity in the US and Asia-Pacific and was bought by Facebook in In , Rdio, Inc. The service was popular in 85 countries. However, the company was constantly staggering behind its competitor Spotify, and eventually surrendered to them. Rdio filed for bankruptcy and was acquired by its competitor Pandora Media, Inc. If users are fully satisfied with the solutions they are already offered, they may be reluctant to look for any alternatives.

What is more, they will hardly switch to your solution if they can use similar services for free. The same situation happened to Rdio when they offered a paid version of their product while Spotify started offering free services in their ad-based product version. Choosing the right stage to enter the market is vital for the success of your product. You should focus not on the software itself, but rather on your potential customers.

If they are interested in your offering, you are more likely to succeed. One more important thing is to decide how you will sell your product. If there are similar offerings on the market, study the way your competitors do it. Basically, you can either sell your software directly to the end user or allow users to download it through your website.

In the case of direct sales, you will be dealing with big companies and SMEs. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

Certain state permits and licenses may be needed to operate a software development business. Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses. A software development business is generally run out of an office.

Businesses operating out of a physical location typically require a Certificate of Occupancy CO. A CO confirms that all building codes, zoning laws and government regulations have been met. Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. There are several types of insurance policies created for different types of businesses with different risks. Recommended: Learn what business insurance for your Software Development Business will cost.

Business Insurance for Software Development Business. Your brand is what your company stands for, as well as how your business is perceived by the public.

A strong brand will help your business stand out from competitors. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website. Most software development companies market their programs online, through websites and other platforms.

What other platforms are most appropriate for a particular business to use depends on what programs that business creates. Still unsure about what kind of business you want to start? After defining your brand and creating your logo the next step is to create a website for your business. While this may have been a reasonable fear back in , web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler. Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders.

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. There are many services available to entrepreneurs who want to set up a business phone system. Check out our review of the Best Business Phone Systems to find the best phone service for your small business.

Nextiva is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing. Select your state below for an in-depth guide on completing each of these steps in your home state. While many different types of people work within the software development industry, business founders tend to be people who bridge the gap between logic and creativity.

Writing programs, of course, requires a strong command of logic. Entrepreneurship Quiz. Much of the work that goes on at a software development company is done on a computer. Business owners spend time writing code, testing and debugging programs, marketing their programs and providing support to customers. Business owners must themselves know how to code in at least one programming language, and competency in several languages is highly advisable.

This technical knowledge is necessary to code and debug programs. Many community colleges and four-year colleges have computer science programs, and local software developers may offer private tutoring.

A software development company can be a small, one-person business, or it can grow into an international corporation. Gorges is a local development company in Ithaca, NY, and Logos is a good example of a niche-specific company. Subscribe to our YouTube channel. One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners. Want to learn more about starting a business from entrepreneurs themselves?

There are many resources out there specifically for women entrepreneurs. Many successful software development companies have raised support on Kickstarter before launching. Business owners who do hire employees frequently bring on computer programmers, computer developers, designers and marketers. Basically, you can either sell your software directly to the end user or allow users to download it through your website. In the case of direct sales, you will be dealing with big companies and SMEs.

You may sell licenses for your software or charge for subscriptions, making the product available for a limited period while the subscription is active. Your profit will depend on the uniqueness of your software and on the number of competitors on the market. Basically, selling a few expensive licenses to big companies may be as profitable as selling lots of cheap licenses to SMEs. If you plan on selling your software through a website, you should start with offering users a free trial of your product to see if it works for them.

Meanwhile, you may gain revenue from support and maintenance. Basically, you may own a successful software business without a technical partner. However, having someone more code-savvy may be useful. They can be involved part-time into your company and review the architecture and code.

In return, you may offer them equity in your company. However, you will have to share your growing profit with the co-owner in the future. One more option is to turn to a reliable vendor offering software as a service. However, you will depend on them a lot, as you will have less control over the software development. Besides, you should allocate some extra time and budget for communication with the vendor to make sure the software satisfies your requirements.

Once you have an idea, obtain the necessary patents and register trademarks to protect it. Make your collaborators sign a non-disclosure agreement at the product creation stage to prevent leakage of any project-related information. State your business purpose, product, target audience, competitors, financial needs, and the expected time to market for your product.

Quirky, Inc. The startup struggled to raise money, went through numerous layoffs, and even shut one of its offices. Later on, they eventually filed for bankruptcy and sold the business in September Now, the invention startup is back with new owners and a new business model. The platform preserves its purpose, but Quirky itself will no longer manufacture products. Instead, they delegated this task to other companies. The startup conducted no market validation and chose the wrong distribution channel — retail chains.

So, they overspent on inventory but failed to recognize whether each product addressed a real consumer need. After all, clicking on an invention you like is different from being ready to pay for it. Determine the legal structure of your business for the purpose of taxation. Take care of insurance in case something goes wrong with your software. Organizing your own software development team is difficult, time-consuming and expensive. Consider outsourcing your development efforts at least at the first stages.

This way, you will get this piece of work done by specialists. If they are overseas employees, you may benefit from their lower labor rates compared to those of the specialists inside the US. Longer project engagement, costly onsite training, language barriers, and different time zones are possible drawbacks with this option. However, reliable contractors mitigate them to the minimum.

On the contrary, hiring wrong people will ruin even the most elaborate plan. GovWorks Inc. The founders had a sound business plan, sufficient venture capital, and a growing audience. The absence of well-coordinated teamwork led the company to a failure. Testing reveals bugs in your software and ensures its quality.

This way, you increase customer satisfaction, which adds to your profit and reputation. However, factors such as time pressure can make you delegate your testing efforts to others.

Software prototyping allows you to get an idea of how the final product will look like before investing time and money finishing it. Users test it, provide their feedback, and decide whether they opt for it in the future. At this stage, correcting mistakes is easier and cheaper that doing if after the product final release. That is why you should come with a prototype as early as possible. After you assess how it goes with your software prototype, you can make all the necessary changes.

Once you have a prototype, or better yet, an MVP, you may attract venture capital, grants and loans, find investors among your acquaintances or attract online funding resources. Starting a software development company involves much effort. Now, you have a detailed guide on how to do it.