How to setup a software development firm
Contributor: Nahian-Al-Hossain, Nascenia
Software industry is a booming industry nowadays. Everything is getting digitalized making life easier. So, starting business now in this field is a right choice. However, without proper knowledge and preparation jumping into this business is not expected. Here are some steps that you should follow to build a successful start up.
Decide partnership and fund raising
You have to decide whether you will go for sole proprietorship, partnership or incorporation. If you are a non tech business person, then you can make partnership with tech person and vice versa.
Another important thing is fundraising. You will need to buy equipment and pay initial salary of developers and rent for the office. Fundraising can be done through debt financing and equity financing. Debt financing is expensive and need asset backed support as form of collateral which is difficult for young entrepreneurs. Here, the investors are lender not partner. On the contrary, in equity financing the investors act as partner which helps innovation. So, it is recommended for startup to to go for equity financing. If an investor is not available, an entrepreneur must be sufficiently equipped to cover the initial costs.
Decide what you want to sell
Software industry works in two major areas namely software products and software services.
When a company develops a software product, it becomes the owner of the product. However, selling software product is not easy. It needs a huge cost for marketing of the product. So, startup with deficit in funding can avoid building product initially. On the other hand, software service involves only with the consultancy of the product. Firms build software for others. Here, firms would not be responsible for the marketing. So, startup with less fund can do this kind of business.
Build your team
You can build your own in house team. You need to hire developers and train them up which is both time consuming and costly. Another way, you can outsource your product development which will reduce your time to go to market and save cost. You can outsource your work to South Asian countries like Bangladesh where you will get quality work cost effectively.
You can go for a combination of the two method – hire an inhouse team who will work with the core technology and outsource the rest of the task. Depending on the situation you have to choose the suitable one for your firm.
Monitor existing projects and Ensure New projects
Once you start the project next very important thing is to monitor the project well and ensure it delivers client’s all requirement. Making clients happy is very important because if they are satisfied they will refer future potential clients. At the same time you have to find new project for sustainability of the firm.
I hope that helps. You can read more article on web and mobile app development.