7 Things You Must Know Before Setting up Software Company

Are you a creative, disciplined, innovative and intelligent risk-taker? Are you fascinated by how productivity can be improved with Software Company? Do you want to start your own business? If you answered ‘yes’ to these questions then it’s time you claim your share of the billion-dollar software industry that’s growing every day.

But don’t jump to starting a business just because you’re a talented worker and want to be your own boss. Thinking business means thinking differently. Of course your talent counts. Here is a solid formula to help you set up a money-earning business of your own.

1. Focus Right: Software Product or Software Services?

The software industry has fantastic potential for those with the right talent and understanding of how to run a business. As a business owner, you need to first decide an area of focus in the industry. There are mainly two sectors in the software industry:

• Software products
• Software services

Software products or programs are a set of applications developed for particular tasks. Software products can target individual business or home users. Software products are also developed to target a particular market segment. For example, there is a suite of programs that helps users take care of all their office paperwork including writing letters, preparing charts, invoices etc.

Then, there can be a software package for a particular car manufacturing company to generate Order Management, Procurement, Forecasting, Delivery, stock inventory etc. An organization can also hire your company to tailor-make special software products for their staff. For example, a magazine company may ask you to re-design an existing word processing package to suit their translation needs for English and Spanish.

On the other hand, software services cover marketing or maintaining software products that might have been developed by your company or someone else. It can also include custom software migration like helping a company move its existing records to a new system. It can also include book-keeping, maintaining records, a subscription list, salary accounts etc.

When you start a business you should carefully evaluate your initial investment capacity and human resource available to you. Conduct a survey of the market and see how other companies in the same area as yours are functioning.

2. Balancing Act: Hiring Technical Team First or Sourcing Software Projects First

Clients are crucial. So is your team that will do the job. Obtaining contracts and then hiring a technical team makes more sense. You could hire specifically according to the requirements of the project.

As your company grows you could keep a multi-talented team working on different projects at the same time.

The trick is in having a team that can complete a project successfully according to the client’s requirement. This will help you build a good brand image. A good brand image means more projects and more profits. Once your confidence in your team, you can hire more people to expand the expertise area of your company.

Hiring a team when your company still has to look for projects would mean keeping staff idle and paying salary without work. It would also demoralize your team.

3. Having a Business Partner or Not To Have Partner

Let’s face it. It takes two to tango. But if both people tango to different tunes you’ve got one miserable situation before you.

Deciding to launch a company by yourself or having a business partner is a question you alone can answer. But either way, one thing that has to be clear at all times is to decide who is in charge. Just because someone makes a great friend, neighbor or spouse does not mean that they would do an equal great job at being business partners.

List your reasons for choosing a business partner. If it is for access to bigger investment capacity, technical help etc. then it makes sense. Do not choose a business partner for emotional reasons ever unless you want to sink your ship.

4. Customer Target Location, Location & Location

If you want to stencil something on the walls of your office make it: Customer target location. You can have the best product on the planet but if your clients don’t need the product what use would it be?

The Internet has made the global market accessible to smaller companies. The flip side is that the Internet has also made competition tougher. Therefore, it is essential to focus on a small group in a particular location.

For example, you are developing a software package for a school. The software package has to keep track of the attendance of the school’s teachers. It is very important to begin by focusing on that individual school. Figure out how other schools are functioning in the city. That ways you can have both a micro and macro view of how your team could develop the project that would eventually have potential beyond a single client.

Conduct a comprehensive market research. Start small. Mark out a local area first and see how best you can tap it. Try to understand the very basic local needs that you can take care of through your software company. Once you start small and focus on a core location you can build profits and client base.

5. Biggest Challenge: Making Sure You Will Have Ongoing Software Projects or New Web Development Projects in Pipeline

The experts call it the double-bill advantage. On the one hand, you can run your company at a pace that suits you. On the other, there is no sitting back with a pipe to smoke. You have to remain on a constant trajectory of growth. If you don’t have a steady inflow of projects, the company is bound to sink. As a business owner you must keep track of new clients, market changes, new options, new projects etc. It is like keeping an oxygen pipeline in place.

6. Software Outsourcing or Not To Outsource

There is a lot of confusion about outsourcing. Outsourcing works best in certain instances only. One of the most logical reasons to outsource is when your existing staff strength is not enough. However, outsourcing also means risking delays and quality compromise.

Overall, you must evaluate whether you really need additional help. Most people wrongly assume that outsourcing is always cheap. This is not so because monitoring outsourced work is far more difficult. You could end up with higher costs with outsourcing if things backfire. But the decision has to be taken only after you have carefully evaluated every single aspect of outsourcing.

Set aside at least a week to take a decision on how and from where you could go for outsourcing. Balance that with a cost-estimate.

7. Talent, Talent and Excellent Talent

You can have billions of dollars at your disposal but if your staff is of mediocre talent you will only end up wasting all the investment. However, having highly talented employees who cannot work together would get your company nowhere.

Choose wisely when picking employees. Take your time building a team that can work harmoniously together and deliver quality work. In the final evaluation, the quality of service you provide to your clients will matter.

So, here’s to your very own software company: Tread cautiously, stay on course!

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