How to Set up a Software Company: A Comprehensive Step-by-Step Guide

Tags: software
Published: 2020-09-30 08:32:31

Software and IT are some of the few businesses in which you can make a lot of money very quickly. Moreover, it is easy to get a technology company up and running even if you don’t have the full amount to facilitate the startup.

Do you want to know the worst myth about startups ever coined? That you need to have a robust technical background in disciplines like IT or coding to run a software startup. Like most false things though, the myth has an element of truth in it as having knowledge about software and Information Technology helps you understand better the products you’ll be dealing in.

But, the truth is you can set up a vast and successful software development company, whether or not you have a technical background. All you have to do is ensure you get all other things right and that you’re aware of how to get the talent that you need.

With that said, setting up a software company involves a set of procedures which we have divided into three actionable steps to simplify the process.

Step 1: Gather Information and Experience

Develop Software and Business Expertise

Although you don’t need to have a degree in computer science to start your software company, running a business is as professional as it gets and you need to have a skill at least in finance, accounting, human resource management, or marketing.

You can even get an entry job at another software development company and work in a managerial position, to have a view of how operations are run. While this may be a long way of learning, you’ll come out a stronger leader and a better communicator in the long run. Pay close attention in particular to the problems of end users that other software companies are not solving. This will inspire your idea.

Generate a Product Idea

Come up with an innovative product idea appertaining to everything you’ve learned and observed in the past about the needs of users. You want to be sure of the solidity of your idea, hence it’s necessary to conduct plenty of market research to learn of any present or potential competition. Don’t forget to consult with professionals in the field and collect feedback from focus groups.

Additionally, speaking with renown software developers helps test out your idea before making any time and money investments. Anybody you approach with your idea should sign a non-disclosure agreement to safeguard its integrity at least until you trademark your product.

Step 2: Preparing to launch

We live in a dog eat dog world. Ensure you obtain the required patents and trademarks before you go any further with the setup procedure.

Create a business plan

Put down a detailed plan that spells out the purpose of your software business, product, market audience, branding approach, financial needs, and product competition. Include also in your business plan a strategic plan to guide you in accomplishing your targets for the company. The strategic layout should entail your business concept, market research, a marketing plan, an operations plan, and a financial plan.

Set the right legal and business foundations

Housekeeping is up next. The truth about footing details like choosing the correct legal entity, setting up accounting systems, and creating operating systems; it’s not an adventure. However, a business cannot do without them.

To propel any software idea and make a profitable, viable product of it demands to get it right with all the legal and business particulars as soon as possible. Else you risk everything falling apart.

This is the part where you seek the skill of experienced accountants and business lawyers to take care of matters relating to:

> Registering your business name with the relevant office,

> Acquiring a tax identification number belonging to your software company, and

> Educating you on issues relating to taxes, licensing, and insurance.

Raise funds for your company

A software company is one of the few ventures that can run on a low budget. However, it is still a business and businesses need money to survive. Make a list of the total capital you’ll need to finance your software company in its early stages of start-up. Consider obtaining funding from the following sources:

> Contact venture capital firms for the possibility of getting into a funding agreement. Although you’ll give up equity in your software company, VCFs are a good way to acquire early-stage funding for your business.

> Research grants and loans.

> Explore online funding sources, e.g. Kickstarter and Lending Club.

> Relatives and friends can make good investors too.

Create the perfect team

You’d be surprised at how effective the right blend of skills, personalities, and experience can be in getting your software idea off the ground. A power team is made up of people who’ll speak their truth and confront you when you’re wrong but are willing to support your every decision as their leader.

Entrepreneurship expert Salim Ismail claims that every successful startup team needs somebody to fill the role of a:

> Customer champion

> Visionary and dreamer

> Innovation architect

> Rainmaker

Yours being a software company, the methodology with which you’ll hire your team of software developers will go a long way to determining the credibility and quality of the final product. You’d do good to check out this guide on choosing the best developers before you make a hiring decision.

Purchase mandatory equipment and applications

After finding office space at a convenient location, equip your team with programming applications, computers, servers, data storage capability, and all other essential tools that come in handy when creating and distributing software. You might need to hire companies in other industries for heavy-duty tasks such as the manufacturing of CDs.

Allocate a development timeline for your software product

Keep in mind that a sophisticated data management system is likely to take longer to develop than a mere mobile phone application. It’s always wise to consult outside experts and ask for input from your team on the appropriate waiting time for the software you’re bringing to the market. Sure, taking out other potential competition is a priority, but it will do the company no good if you offer consumers a product that’s filled with bugs because your lack of patience got the better side of you.

Be a leader

Overlook the development process. Erupt clear communication channels between you and software development team members to ensure that everybody is moving in the same direction and working towards a shared product vision. Weekly status meetings are an excellent way to keep track of progress and review the timeline.

Step 3: Testing and marketing your product

Test the product after the development phase

Build a structured quality control and guarantee process. You can delegate a small development team to test each feature for proper functioning on different operating systems or bring in outside testers with a fresh view to interact with the software.

A complete layout of testing procedures should guide the testers not to skip any step; otherwise the test will be invalid.

Furthermore, allow a small team of consumers from your target audience to use your product and gauge for its user-friendliness, accuracy, effectiveness, and efficiency. This will help you make any necessary changes to your software and retest for quality before finally releasing it out into the market.

Market your product

This final step wraps up the procedure of setting up a software company and involves hiring experienced marketing experts or a marketing firm to work for you. These same professionals should help shape decisions about market audience, and product features and uses. Marketing plays a huge part in the success of any business. For one, it’s the marketers that get feedback on software performance from customers and prospects.

Nowadays, It’s a rule of thumb for every business to have an online standing. Its mere survival depends on it. At the least, ensure you have a website and a social media page for your software company. Increase the anticipation of future users by teasing a lot about the software that’s to come and the things that it’ll help them to accomplish.

Strictly following the above guide should ensure smooth sailing for your startup process. However, it is natural for problems to spring up along the way. If this happens, remember that no one gets everything right the first time. Still, no failure is permanent, and each mistake inches you closer to your dream.

Originally published on https://www.aalpha.net/blog/how-to-set-up-a-software-company-a-comprehensive-step-by-step-guide/