5 Considerations Before You Start A Software Company

Though you hear a lot of startup success stories, it is very important that you take care of certain basic considerations so that your startup is up and running viable. Without understanding these basic tenets, it would be a death trap for you and your startup.

Without further ado, let’s look at the basic considerations for a new software based startup:

Financial Consideration

It is very rare to see startups that have been completely “started from scratch” or “bootstrapped” from the very beginning to the time of their market entry. The on ground reality is that financial support of some type or the other is always required to create any kind of sustaining the business. More so when it comes to businesses that take months and months of developing to arrive at a  finished product that could be sold in the market, such as a software product.

The most crucial thing any software based startup must address is a business plan and should have enough funding that will get the team through the development phase, at the very minimum.

The business plan of the startup should include basic things like the amount of time investment and human investment required to create the end product, accompanied by other requirements like software tools, office space, and office supplies. After the business plan and running costs have been calculated, the business owner should consider several other types of funding, from bootstrapping, seed funding or establishing a tie up with a reputed company or incubator based on the needs and expense of the team involved in the creation of the project.

Team Prerequisites

Getting a right team in place would be considered the most important of all requisites to the successful running of a software based startup. If a lot of company talent is joining and exiting a startup at a faster rate during the initial product development phases, that would be very detrimental to the software business reputation and all deadlines would be affected. A fledgling software startup should have an in-house software development team that must have all the required expertise that they’ll be needing for their product to be made successfully.

Apart from possessing a complete developer team,  a software-based startup needs sales, marketing, and legal teams to be set up. It could be both in-house talent or the talent could be outsourced. This is paramount to make sure that the product successfully reaches the desired market.

Legal Considerations

Legal advisory services could be considered one of the first requisites that should be processed to even begin the process of creating a software based startup. Legal experts would be the very fast to vet the idea that was conceived by the team as some ideas and further software created using them could be infringing a patent that could be owned by someone else or a company or maybe that isn’t possible in accordance with the laws of the land.

So, the prior legal groundwork has to be done to make sure that time and money invested in development doesn’t go waste. There are legal teams specialized in this field that could help you, if you have established a relation with an incubator or co-working networks, they might point you in the right direction.

Source Code Escrow

Most software startups as they are setting up business overlook this important service. If your target audience is enterprise customers then they will want protections to be set in place in case your startup doesn’t succeed in the long run.

Source code escrow is a service provided by a third party vendor that protects the software, associated data, software source code, and other related documentation necessary from an unexpected and/or permanent interruption of the software vendor, such as bankruptcy.  If the unexpected situation had to happen your business customer will be able to continue to use the crucial software that you and your team developed for them.

Planning ahead even for such unexpected outcomes would show your potential enterprise clients that you are well thought off about customer concerns and are ready to do the essential measurements to earn their trust and business.  This could turn the odds in favor of a relatively younger startup.

Market considerations

Once everything else is set in place, it’ll be time for you to start preparing your product for market readiness. It is generally as much work that your team spent on development of the product. Creating a software from scratch is one thing, but then preparing it and then later launching it in a market is an entirely different animal.

A software based company should focus on doing the required market research parallel as they develop a software product for the market so that they will be able to actually sell their product to a customer base who might need it.

I hope these ideas were helpful to you. Let us know if you have any doubts through the comments section and we will be glad to help you out.