How To Start A Software Company

How to Start A Software Company can be answered in many ways because it will be different every time depending on your specific situation. Some of the ways you can start your own software company are with other partners, by yourself, and more recently through outsourcing to places like India and China which can cost much less than starting in the US with employees here.

No matter how you answer the question how to start a software company, there are definitely some hurdles that you need to face before you get off the ground and into the air with your new venture.

Identify your market

software companies have one of the highest fail rates when it comes to early-stage companies. However, many new startups do not see that as a deterrent, or they think that the opposite is true and that because there are so many people in the industry they can just go find their customers.

This is why market research and business planning are so important. It’s always good to make sure you’re entering a market where your product has room for growth. For example, look at what Google has done with their AdWords platform; they dominate this market because they created something in demand.

Starting your own babysitting business can be quite rewarding – you get to choose your own hours, set your rates, and decide how involved you want to be in the actual childcare.

Evaluate your product idea

Your product idea is the most important factor in getting your software company off the ground. From differentiating yourself in the market to choosing your pricing model, it’s vital that you consider this decision carefully. Before coming up with an idea for your product, first consider what you will be doing with it and why someone would want it. Is it something completely new that no one has ever tried before? How does it differ from other products? The best way to evaluate these questions is by asking them to people who are not involved in your project, so as not to skew their answers.

Build your business plan

Come up with an idea. Be realistic about what will work in the market and what you have the skills for. You can also consult with investors for input. For example, do you know if your idea would scale? Would it be a good fit for retail sales? These are important questions to ask yourself as soon as possible.

Set up a legal entity

Selecting an appropriate business structure can be very important in structuring your business. There are a variety of ways you can select the right structure for your situation including sole proprietorship, partnership, LLC, and corporation. There are advantages and disadvantages associated with each type of entity and it is imperative that you know which one is best for you. For example, if there are more than two members who plan on being actively involved in the operation of the business then an LLC would not be advisable because it does not limit the personal liability of any member or provide certain tax benefits for those types of businesses.

Get funding

Since startups do not have revenue at the beginning, founders need an external source of funding. In order to get venture capital, founders need either personal funds or investment money from other sources. The process can be complex, but there are some guides on how to apply for funding. Venture capitalists invest in two types of businesses those with high rates of return and those that provide a breakthrough product or service in an emerging market (depending on what is being invested in).

Keep it simple and cheap, keep it lean and mean

If you’re considering starting your own software company, it’s best to think about the viability of your idea. Do market research. Ask friends and colleagues for feedback. Consider what you’d be doing on a day-to-day basis and weigh those pros and cons with the marketability of your product or service before moving forward.

It takes time and money to build something from scratch, so make sure you’re not wasting either by launching something that isn’t as high-quality as it could be or doesn’t have as large of an audience reach as anticipated. If you’ve had an idea that’s never been done before, spend some time brainstorming how you’ll execute it while taking into account these factors – but don’t let the initial capital expense deter you.

Protect your investment

If you’re developing a computer program, you will need to assign someone the responsibility of protecting your intellectual property from copyright infringement. If you go it alone and allow your product to be distributed in its entirety without restrictions, then anyone can copy the code and resell it as their own. Even if you file for copyright protection immediately upon the conception of the idea, without trademark protection, competitors are free to market and sell products identical or very similar in look and function. In order to prevent this kind of theft, an individual may apply for both copyright protection with US Copyright Office, as well as filing for trademark protection with USPTO.

Use the KISS principle (Keep It Simple Stupid!)

KISS stands for Keep It Simple Stupid. Software development has changed rapidly in the last decade and it’s now more important than ever to be agile. It’s important that you have a plan before diving into the nitty gritty of your software. Creating milestones and setting goals with deadlines will help focus your team on how they’re going to get there.

Use agile methodologies such as SCRUM and LEAN, so you’re able to adjust quickly as problems arise or unforeseen circumstances arise. Plus, creating documentation such as meeting notes, architectural diagrams, use case diagrams and wireframes will allow for transparency throughout the entire development process so that both business stakeholders and technical teams are aware of what is happening at any given time. This will also help with collaboration across departments too!

The Lean Startup methodology by Eric Ries – use it!

I recommend taking inspiration from Eric Ries’ Lean Startup methodology. The process outlines five key steps for every startup: idea validation, alpha release, beta release, revenue stream and scale. Once you have the basics of your business down, it’s important to focus on these five steps in order to get off the ground and stay grounded once you’re up in the air. Check out the Lean Startup process below


You’ve had an idea for the next best mobile app, but before you can sit down and code it, you need to make sure that your business is set up properly. When registering your company with your state’s Secretary of State office or filing your Articles of Incorporation with the state’s Corporation Commission, be sure to include the following:

The name of the corporation and any alternate names under which it does business. The full legal name and address (including city, county, and zip code) of the incorporator or incorporators. The mailing address (including zip name and street address) of the corporation’s principal office in this state and each branch location if any in this state.


Please enter your comment!
Please enter your name here