How to start a Software development business


How to start a Software Development Business

Are you interested in starting your own Software Development Business?

There are many reasons you might want to start a software development business. Maybe you have a great idea for a new app or piece of software. Maybe you're a great developer and you're sick of working for someone else. Whatever your reason, starting a software development business can be a great way to make money and achieve your goals. Of course, starting any business is not without its challenges. There's a lot to think about when starting a business, from coming up with a great idea to building a team to developing and marketing your product. But don't let that discourage you—if you're passionate about software development and you're willing to put in the hard work, starting a software development business can be a great way to achieve your goals. In this guide, we'll walk you through everything you need to know to start a software development business, from coming up with an idea to building a team to marketing your product. We'll also provide some tips along the way to help you avoid some of the most common mistakes made by first-time entrepreneurs. So if you're ready to start your own software development business, read on!
Business Plan
If you're thinking about starting a software development business, the first thing you need to do is create a business plan. This document will outline your business goals, strategies, and how you plan on achieving them. Your business plan should include:
-An Executive Summary: This is a brief overview of your business, what you do, and your plans for the future.
-Company Description: This is a more detailed description of your company, what services you offer, and your target market.
-Market Analysis: This section will analyze your industry and target market. You'll need to research your competition and identify your niche.
-Sales and Marketing Strategy: This section will detail your sales and marketing strategy. How will you reach your target market? What kind of marketing campaigns will you run?
-Operational Plan: This section will outline your day-to-day operations. What processes will you use to develop software? How will you manage projects?
-Financial Plan: This is perhaps the most important section of your business plan. You'll need to detail your startup costs, financial projections, and how you plan on generating revenue.
Target Market
If you want to start a software development business, you need to first identify your target market. This can be difficult, as there are many potential markets out there for software development businesses. However, by taking the time to research and understand your target market, you can better focus your business and attract the right customers. When identifying your target market, consider the following:
-What type of software do you develop?
-Who will use your software?
-What needs does your software address?
-What are the demographics of your potential customers?
-What is your competition like?
By understanding your target market, you can better position your business to succeed.
Business Model
There are a few different ways you can go about starting a software development business. You can either start your own company from scratch, or you can purchase an existing software development company. If you're starting your own company, you'll need to come up with a business model and a plan for how to generate revenue. There are a few different ways to do this, but the most common is to either sell your software products outright, or to offer them on a subscription basis. You'll also need to decide how you'll market and sell your products, and what sort of customer support you'll offer. If you're purchasing an existing software development company, the business model will likely already be in place. However, you may want to consider changing the pricing structure, or adding new products to the lineup. It's also important to make sure that the company you're purchasing has a good reputation, and that its customer base is loyal and satisfied..
Competitive Landscape
When starting any business, it is important to understand the competitive landscape. The software development industry is no different. There are a few main types of competitors in the software development space:
1) Large Enterprise Software Development Companies: These are the big players in the industry. They have the resources and marketing power to attract and retain customers. They also have the scale to offer lower prices.
2) Medium-Sized Software Development Companies: These companies are often more nimble and customer-focused than their larger counterparts. They may not have the same resources, but they can be more responsive to customer needs.
3) Boutique Software Development Companies: These companies are often small, but they offer specialized expertise and services. They may be more expensive, but they can provide a higher level of service.
4) Freelance Software Developers: These developers work independently and are often hired on a project basis. They are typically cheaper than full-time employees, but they may not be as reliable or have the same level of expertise.
Costs & Pricing Strategy
There are a few things to think about when it comes to costs and pricing strategy for your software development business. First, you need to consider the cost of your products or services. This includes the cost of development, hosting, and support. You also need to consider the price of your products or services. This includes the price of development, hosting, and support. You need to find a balance between these two factors to ensure that you are making a profit and providing value to your customers. Next, you need to consider your pricing strategy. There are a few different ways to price your products or services. You can charge by the hour, by the project, or by the month. You need to find a pricing strategy that works for you and your business. There are a few things to consider when choosing your pricing strategy.
First, you need to consider your target market. Are you targeting small businesses or large enterprises?
Second, you need to consider your competition. What are they charging for their products or services?
Third, you need to consider your margins. How much profit do you want to make on each sale? Once you have considered all of these factors, you can start to develop a pricing strategy for
Forming a Legal Entity
If you want to start a Software Development business, you will need to form a legal entity. This will protect you from personal liability and help you raise money for your business. You can choose to form a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each type of entity has its own pros and cons, so you will need to choose the one that is right for your business. If you are the only owner of your business, a sole proprietorship may be the best option. This type of business is easy to set up and you will not have to deal with much paperwork. However, sole proprietorships offer no personal liability protection, which means that you could be held responsible for debts incurred by your business. Partnerships are similar to sole proprietorships in that they are easy to set up and offer no personal liability protection. If you decide to form a partnership, you will need to choose a business partner who you can trust and who has complementary skills. It is important to have a written partnership agreement that outlines each partner's roles and responsibilities. A limited liability company (LLC) offers personal liability protection and is a good option for a small group of founders. 
Opening a Business Bank Account
When you’re ready to start your Software Development business, one of the first steps is to open a business bank account. This will help you keep your personal and business finances separate and will make it easier to track your expenses and income. To open a business bank account, you’ll need to have the following information and documents:
-Your business name and address
-Your Social Security number or Employer Identification Number (EIN)
-A list of the owners, officers, and directors of the company
-Articles of incorporation or a business license
-A voided check or deposit slip from the account you’ll be using for your business
Once you have all of the required information and documents, you can visit your local bank or credit union to open a business checking account.
Setting up Business Accounting
If you're starting a Software Development business, one of the first things you need to do is set up your business accounting. This will ensure that you're keeping track of your finances and that you're complying with any financial regulations that apply to your business. Here's a quick guide to setting up your business accounting:
1. Choose an accounting software. There are many different accounting software packages available, so do some research to find one that will suit your needs.
2. Set up your chart of accounts. This is a list of all the categories of income and expenditure that you will track in your accounting system.
3. Set up your bank account. You will need a business bank account to manage your finances effectively.
4. Keep track of your income and expenditure. Make sure you keep accurate records of all money coming in and going out of your business.
5. Prepare and file your tax return. Once a year, you will need to file a tax return for your business. Make sure you keep on top of this so that you don't miss the deadline
Setting up Business Insurance
As a business owner, it is important to protect your company with the proper insurance. When setting up a Software Development business, you will need to consider the following types of insurance:
-Product liability insurance: This will protect you in the event that a product you designed and printed causes injury or damage.
-Professional liability insurance: This will protect you in the event that a client suffers damages as a result of your work.
-Business property insurance: This will protect your equipment and premises in the event of damage or theft.
-Business interruption insurance: This will protect you in the event that your business has to stop operations due to a covered event.
-Employee dishonesty insurance: This will protect you in the event that an employee steals from your business.
Speak with an insurance agent to determine which policies are right for your business
Setting up a Business Website
If you want to start a Software Development business, one of the first things you need to do is set up a website. This will be your online home base, where potential customers can learn more about your business and what you have to offer. There are a few key things you need to include on your website:
-An About page: This is where you can tell your story and give potential customers a sense of who you are and what you stand for.
-A portfolio: Showcase your best version on your website so that potential clients can see your work.
-A contact page: Make it easy for people to get in touch with you by including your email address and/or social media links.
-Pricing information: Let visitors know how much you charge for your services.
By having a well-designed website, you’ll be able to attract more customers and grow your Software Development business
Obtaining the Necessary Permits
If you want to start a software development business, the first step is to obtain the necessary permits. Depending on your country, state, and city, the requirements for starting a business may vary. However, there are some common permits and licenses that most businesses need. The first permit you will need is a business license. This can be obtained from your local city hall or chamber of commerce. In addition to a business license, you will also need a permit to operate your business from your home. This is usually obtained from your city or county government. Another common permit needed for starting a software development business is a sales tax permit. This allows you to collect sales tax from your customers on the products and services you sell. In most cases, you will need to register for a sales tax permit with your state government. Once you have obtained the necessary permits and licenses, you can start setting up your software development business. This includes finding office space, hiring employees, and marketing your business to potential customers.
Setting up a Business Number or Appointment Setter
When you’re ready to start your Software Development business, one of the first things you need to do is set up a business phone number or an appointment setter. You can use a service like Google Voice to set up a business phone number for your Software Development business. Google Voice will give you a free business phone number that you can use to make and receive calls. Once you have a business phone number, you can start taking calls from potential customers. When you get a call, be sure to take down the customer’s name, contact information, and what they need. Once you have this information, you can give the customer a call back to discuss the project in more detail and give them a quote.

Hiring Employees

When starting a software development business, hiring employees should be one of the top priorities. The right employees should have the necessary skills and experience to help you reach your goals. Make sure to create a fair and competitive payroll system and develop a workforce strategy that will allow you to retain and motivate your staff.

Acquiring Equipment and Software

Having the right equipment and software is essential when starting a software development business. Create a budget for purchasing the necessary tools and technology for your team. Invest in reliable hardware and up-to-date software that will enable you to efficiently develop quality software products.

Attracting Clients and Generating Revenue

Generating revenue is key to the success of any business. Consider marketing strategies that will help you reach potential clients and create effective sales pitches. Develop a unique brand identity that will make your company stand out from the competition and create an impressive portfolio of projects to showcase your capabilities.

Building a Team of Advisors

As you build your business, it's important to surround yourself with advisors who can provide valuable guidance. Seek out mentors who have experience in the software development industry, as well as legal counsel who can help you navigate any potential issues.

Developing a Brand Identity

Creating a strong brand identity is critical when starting a software development business. It gives potential clients an idea of what they can expect from you, as well as setting you apart from competitors. Invest in logo design and visuals that align with your mission statement and values.

Securing Financing for Growth

You may need additional financing in order to grow your business. Research different funding sources such as venture capital firms or angel investors, who can provide the necessary capital for expansion.

Automating Your Processes

To remain competitive in the software development industry, it's important to streamline processes by automating certain tasks. Investing in technology can help you increase efficiency, allowing you to dedicate more time to developing quality products.

Maximizing Your Profitability

Maximizing profitability should be one of your main goals as a business owner. Look for cost savings opportunities wherever possible, such as reducing overhead expenses or optimizing production processes. Utilize data analytics to identify areas where improvements can be made and make informed decisions about how best to allocate resources.
Assuming you have followed all of the previous steps in this series on starting a Software Development business, you should now have a clear understanding of what is required to get your business up and running. While there is no one-size-fits-all formula for success, these tips should help you avoid some of the common pitfalls associated with starting a new business. With careful planning and execution, you can increase your chances of building a successful Software Development business.

Why write a business plan?

A business plan is a critical tool for businesses and startups for a number of reasons:
  • Business Plans can help to articulate and flesh out the business’s goals and objectives. This can be beneficial not only for the business owner, but also for potential investors or partners
  • Business Plans can serve as a roadmap for the business, helping to keep it on track and on target. This is especially important for businesses that are growing and evolving, as it can be easy to get sidetracked without a clear plan in place.
  • Business plans can be a valuable tool for communicating the business’s vision to employees, customers, and other key stakeholders.
  • Business plans are one of the most affordable and straightforward ways of ensuring your business is successful.
  • Business plans allow you to understand your competition better to critically analyze your unique business proposition and differentiate yourself from the market.
  • Business Plans allow you to better understand your customer. Conducting a customer analysis is essential to create better products and services and market more effectively.
  • Business Plans allow you to determine the financial needs of the business leading to a better understanding of how much capital is needed to start the business and how much fundraising is needed.
  • Business Plans allow you to put your business model in words and analyze it further to improve revenues or fill the holes in your strategy.
  • Business plans allow you to attract investors and partners into the business as they can read an explanation about the business.
  • Business plans allow you to position your brand by understanding your company’s role in the marketplace.
  • Business Plans allow you to uncover new opportunities by undergoing the process of brainstorming while drafting your business plan which allows you to see your business in a new light. This allows you to come up with new ideas for products/services, business and marketing strategies.
  • Business Plans allow you to access the growth and success of your business by comparing actual operational results versus the forecasts and assumptions in your business plan. This allows you to update your business plan to a business growth plan and ensure the long-term success and survival of your business.

Business Plan Content


Many people struggle with drafting a business plan and it is necessary to ensure all important sections are present in a business plan:
  1. Executive Summary
  2. Company Overview
  3. Industry Analysis
  4. Consumer Analysis
  5. Competitor Analysis & Advantages
  6. Marketing Strategies & Plan
  7. Plan of Action
  8. Management Team

The financial forecast template is an extensive Microsoft Excel sheet with Sheets on Required Start-up Capital, Salary & Wage Plans, 5-year Income Statement, 5-year Cash-Flow Statement, 5-Year Balance Sheet, 5-Year Financial Highlights and other accounting statements that would cost in excess of £1000 if obtained by an accountant.

The financial forecast has been excluded from the business plan template. If you’d like to receive the financial forecast template for your start-up, please contact us at . Our consultants will be happy to discuss your business plan and provide you with the financial forecast template to accompany your business plan.

Instructions for the Business Plan Template

To complete your perfect Software Development business plan, fill out the form below and download our Software Development business plan template. The template is a word document that can be edited to include information about your Software Development business. The document contains instructions to complete the business plan and will go over all sections of the plan. Instructions are given in the document in red font and some tips are also included in blue font. The free template includes all sections excluding the financial forecast. If you need any additional help with drafting your business plan from our business plan template, please set up a complimentary 30-minute consultation with one of our consultants.

Ongoing Business Planning


With the growth of your business, your initial goals and plan is bound to change. To ensure the continued growth and success of your business, it is necessary to periodically update your business plan. Your business plan will convert to a business growth plan with versions that are updated every quarter/year. Avvale Consulting recommends that you update your business plan every few months and practice this as a process. Your business is also more likely to grow if you access your performance regularly against your business plans and reassess targets for business growth plans.


Want a Bespoke Business Plan for your Software Development Business?

Our Expertise


Avvale Consulting has extensive experience working with companies in many sectors including the Software Development industry. You can avail a free 30-minute business consultation to ask any questions you have about starting your Software Development business. We would also be happy to create a bespoke Software Development business plan for your Software Development business including a 5-year financial forecast to ensure the success of your Software Development business and raise capital from investors to start your Software Development business. This will include high-value consulting hours with our consultants and multiple value-added products such as investor lists and Angel Investor introductions.


About Us


Avvale Consulting is a leading startup business consulting firm based in London, United Kingdom. Our consultants have years of experience working with startups and have worked with over 300 startups from all around the world. Our team has thousands of business plans, pitch decks and other investment documents for startups leading to over $100 Million raised from various sources. Our business plan templates are the combination of years of startup fundraising and operational experience and can be easily completed by a business owner regardless of their business stage or expertise. So, whether you are a budding entrepreneur or a veteran businessman, download our business plan template and get started on your business growth journey today.