6 steps towards starting a software development agencyNowadays it may seem that everybody and their dog is trying themselves at establishing some IT startup. Software development companies sprout like mushrooms after the rain but, unfortunately, a vast majority of them crumbles away within 6-10 months. It, however, happens not because the market is oversaturated but rather due to lack of experience and planning. So how should one go about founding and running such an enterprise? Let’s take a look.

1. Secure Initial Funding

One of the most typical reasons why IT startups fail is over-optimism on the part of founders. Only a handful of software companies start bringing in money, let alone a lot of money, within half a year after founding, and counting on getting lucky isn’t the most sound of business policies. Ideally, you should have enough emergency funds to keep your startup without any cuts for at least six months, or more if possible. If your business plan has any value at all, this alone can help you weather out the initial problems and overcome this difficult first period.

2. Organize Test Automation

Testing and quality assurance occupy a tremendous part of the time for any IT company, and yours isn’t going to be an exception – at least if you want to amount to anything in this business. By arranging for testing automation (which usually done using the expertise and assistance of a well-established service doing this kind of work), you can dramatically decrease the amount of manual work you and your colleagues have to do and shorten the time necessary to bring each new product to the market.

3. Be Active Finding Your First Clients

Don’t expect clients to turn up, be proactive looking for them. Your family, friends, acquaintances and their extended networks may be the first stop. Establish a website with a regularly updated blog before starting out. Contact other companies working in the same niche and offer to do some work on contract – it will fill in the portfolio of your business and demonstrate your ability to take up and complete commercial projects.

4. Be Careful and Meticulous when Developing and Launching a Product

Make sure the idea of the product is viable, that you both have resources to bring it to life and will have clients interested in your work. Do as much market research as possible and consult industry specialists concerning your ideas and possibilities of future investments. At the same time, make sure you protect your idea – have all whom you consult sign a non-disclosure agreement. If your product is in its final stages of formation, you may want to hire an intellectual property attorney. It is worth doing if you want to protect your interests and trademark your product to prevent others from stealing its name.

5. Decide What Your Business Is Going to Be Legally

There is a world of difference between a sole proprietorship, partnership, LLC, corporation and other arrangements – all of them have their strong and weak points and are suitable for different situations. Consult an experienced business attorney who will be able to evaluate your situation and suggest the optimal solution.

6. Offer Several Packages

Whatever product you offer, try making it available for different groups of clients on different sets of conditions. It is usually a good idea to have an entry-point offering that is free but limited in functionality, and two or three paid variants aimed at different target clientele.

Starting a software development business isn’t that much different from starting any other kind of business – you should think about protecting your interests legally, finding the right employees and clients, and so on. However, there are things that can drastically improve your chances of success – be sure to make full use of them!

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