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How to Start a Software Business

How to Start a Software Business


The software industry has been leading technological advancements for years now, with big companies such as Apple and Microsoft positioning among the most valuable and popular companies in history. It’s unsurprising that numerous people aim to begin their own software company. But do you know how to begin a software company?

Fresh software businesses are formed continuously to leverage the newest improvements in technology over numerous services and products. However, though it might seem as if the software industry is drenched with companies of all sizes, deliberating how to start a software company is not as easy as it might appear. It’s even easier to create a successful software company that keeps developing over the long term.

To succeed, software companies must work out what problems they are setting off to solve and work towards solutions their customers and clients require. Just as significantly, a software company is required to stand out from the ground and gain benefits over its competitors.

This blog will discuss the details of how to start a software company. We will look into the key factors that business leaders and startup founders must consider setting up their software business, share key perceptions of what it takes to guarantee your company’s success and discuss how to safeguard your business and software products.

Software Business Market

Source: Statista

According to Statista, the Software market revenue is predicted to reach US$698.80bn in 2024. Revenue is also anticipated to display a CAGR of 5.27%, ensuing a market volume of US$858.10bn by 2028.

What is a Software Development Company?

A software development company or business (or team, depending on the agency) designs and develops custom software applications, outlines, and tools that assist in solving problems or achieving a specific result. As you have probably predicted, the people who structure this team are pretty intellectual. While every software development team or company is diverse, it will usually be created by software architects or developers, or at least one product owner (the person accountable for testing and working with the product, ensuring it works properly), and some kind of project manager.

Why is starting a software development startup becoming more and more popular?

To prove that the software development niche is up-to-the-minute so far, let’s revisit the figures. In recent years, this market has practiced high levels of growth, which means the users need high-quality and robust mobile apps and software solutions.

The software development process usually involves mobile app designing, developing, deploying, and maintaining for businesses. As you can understand, this area is promptly growing, and there’s a lack of qualified and professional software development professionals. If you have numerous years of experience in the related niche, why not create a software development company?

Here’s a list of the key benefits that software dev companies can pass to other businesses:

  • Craft an advanced product that certainly brings superfluous profit to business owners
  • Improve productivity and employee drive
  • Integrate software with other programs
  • Increase the scale of business operations over time
  • Enhance ROI

What are the Required Basics to Start Your Software Development Business?

We have listed the main steps to follow for intercepting that challenge successfully. Of course, there are numerous features to consider, but these are the basic steps that must be followed for everyone attentive to making a software development company work:

Create a business plan

Form your development plan, describe your company’s main goals, and instructions to follow in accomplishing these goals. A business plan lets you plan your expenses and set your objectives. It’s not essential to follow the plan word for word as reality might (and will) diverge from your plan, but it will be useful in determining your first steps while considering the budget.

Here are the main sections an IT business plan must comprise:

  • Executive summary
  • Your company’s detailed description;
  • All-inclusive market research;
  • Services descriptions provided by the company;
  • Management structure;
  • Company’s marketing strategy;
  • A comprehensive financial analysis.

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Develop a unique brand.

Though creating a brand is not an easy task, it’s of greatest importance for any business owner to do this while considering: What should it look like? How should it make your customers feel? Reminisce that a brand is not an identifiable name; it’s how your customers distinguish you during your interaction with them.

This task involves the following stages:

  • Comprehending your key audience and competitors
  • Indicating your focus;
  • Outlining your business name;
  • Creating your motto;
  • Describing your business colours and fonts;
  • Designing a brand logo;
  • Relating branding across your business in every domain.

Assessing the Key Costs and Expenses

As a business owner, you must recognize the key drivers behind the costs and expenses related to administrating a software company. Such costs and expenses comprise:

  • Employee wages
  • Research and development costs (R&D)
  • Marketing and promotion
  • Office space and business location rent
  • Office equipment, supplies, and furniture
  • Software development costs (data storage, servers, applications)

A complete assessment of these costs and expenses will have a huge impact on any resolutions related to funding and creating revenue for your software company. Consider how much preliminary investment you will require to cover these expenses from the beginning, and how much revenue and growth you are expecting to produce that will keep the business operating at a profit.

Hire people

When constructing your own software development company, you must be double sure that your associates, employees, and business partners are professionals in this niche. Effective human resource management is of the highest importance, and this is where experience matters a lot. Your first and leading task is to look for your developers. In addition, you must also find project managers, technical leads, user acceptance testers, software testers, product analytics, and customer care specialists.

If you are on a budget, you can do this personally, specifically when you know IT professionals who are seeking a job right away. However, it’s preferred to utilize recruiting services or hire an internal recruiter if you are not all set to invest time in this time-ingesting process. Just outline your needs, and experts in this niche will look for the right people for your company.

Client’s Test sources

If you are starting your software Development Company from scratch, your first step must be either looking for recommendations, i.e. some of your colleagues can propose your services to relevant people or strike marketplaces such as Upwork or YouTeam supporting your services. After locating your first clients, don’t cease to test all possible sources, as you never know which will fetch you the optimal results. Among the options are SEO investment, content marketing, outbound sales, events and conferences, networking, etc.

Testing, Promoting, and Marketing Your Software Products

Testing your software is significant for your software company’s success at every stage. Once your software product crosses the development stage, it must be tested systematically to expose and fix any bugs to ensure it hits the market at a high-quality level. Owning a successful, reasonable software product from the outset will improve your company’s reputation and increase customer devotion, which is exclusively significant during the startup phase of a software company’s lifespan.

Software companies should have a detailed quality control and assurance plan in place for testing their software. Frequently, a dedicated team comprising of a few developers will test the software product’s every feature, ensuring that it operates as planned. Occasionally, external testers are carried out for product quality assessment. Each test must follow an approved set of measures. A selected group of end-users must also be requested to test the product to assess how user-friendly and useful it is. Only once all the bugs and errors are instituted and fixed can the product be completed.

The product then requires to be promoted and marketed. All software products are mainly marketed online since software companies’ clients will be on the viewpoint for new products online. Consequently, maintaining a solid online presence is of extreme importance for software companies. That means owning an alluring and user-friendly website, a robust social media presence, and promotional movements that might include previews or teasers of the recently released product.

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Securing Your Software Business with the Right Insurance Coverage

Learning how to start a software company encompasses the evaluation of several risks that you and your business will come across at every point, right from the beginning. A software company, similarly, to any other business, can’t function safely and officially without having the right insurance coverage in place. That’s why devising an effective risk management strategy is so significant.

Cyber liability insurance is necessary for all software companies to secure against cybercrimes, including ransomware attacks and data gaps. Technology blunders & omissions insurance (Tech E&O) is just as essential because it is intended to provide a shield against liability risks handled by people employed in the tech sector, comprising software companies. For software development companies, this can be the first insurance policy to reflect on.

Most business owners, including startup founders, need a business owner’s policy (BOP), packaging together numerous policies involving commercial property insurance, general liability insurance, and business interruption insurance.

Directors’ & officers’ insurance (D&O) is indispensable for a software company’s leadership. D&O insurance guards the company’s directors and officers alongside lawsuits claiming gaps of fiduciary duty. While it is usually a good idea to have D&O insurance, it is particularly vital for any software company, along with a board of directors.

All software companies owning employees, except for very few, need workers compensation insurance. Also, employment practices liability insurance (EPLI) offers software companies the coverage for claims given by employees against their employer.


Knowing how to start a software company is a time-consuming process, requiring patience and a lot of research. You must be ready to oblige yourself completely to your vision for building your software company and implementing all the risk-taking impending with working to apprehend that vision.

At the same time, it’s essential for startup founders to take on the accountability of shielding their business from the beginning by creating a functional business plan, besides determining the right legal structure and catering to all the legal necessities required to begin a business. It also involves putting up the needed funds, hiring the right people, and analyzing the products to confirm high quality.

Beyond everything, starting a software company particularly involves taking the required measures to secure your intellectual property and owning the right insurance coverage to protect yourself and your business.

If you are also looking for experienced software developers to advance your business and team, don’t hesitate to contact Progatix. We are adaptable and serve numerous custom services, fluctuating from creating a simple mobile app to generating a whole offshore development centre.

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Avatar for Amna Shahid

Amna Shahid, a technical content writer, is an expert in simplifying intricate notions and composing captivating narratives to participate and convey technical information efficiently. With a devotion to brilliance in this dynamic technical writing field, Amna is open to collaborating and new possibilities in this succeeding tech realm.
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Progatix, a well-known software development company, has been delivering innovative digital consultancy services & custom software solutions encouraging business growth since 2003. Our remarkable solutions involve strategic digital consultancy, legacy system migration, DevOps, and stellar testing services.

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