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8 things I learnt from starting, running, and selling a software agency

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Chris Rickard

Contributor
May 9, 2022
10
33
Australia
Hey guys,

I am a software developer that started (or rather stumbled into starting) a software development agency.

Financially, it went a lot better than I originally expected. We hit 6 figures in year 1, high 6 figures in year 2, and 7 figures in year 3. We were super happy with this result, and it kept getting better.

Last year after 8 years, I sold my business to a larger agency.

It’s something I had thought about doing for a while. I wanted the opportunity to pursue other interests, and have a long break to plan the next chapter of my life. After travelling in an RV with my wife for the last 8 months, I have certainly had that break!

Anyways, long story short - I ran my business for 8 years, and 8 months ago I sold it.

So I thought it would be poetic to capture the top 8 important lessons I learned from running a software development agency.

  1. It’s tough to do it all by yourself.
    In fact, I don’t think I would have done it. I started my agency with a good friend from university, and later when he moved on to a different venture, my wife joined. Having a partner to “divide and conquer” was great, and the emotional support was integral for me.

  2. Have a niche.
    Don’t try and do everything, otherwise, you’re competing with everyone. We originally focused on building MVPs or startups, and whilst this was fun the money wasn’t great. Custom software for internal business use was our second focus, and that was very successful. We found the niche, started getting great projects, and then hit 7 figures pretty fast.

  3. Your staff are a superpower.
    We were a small, lean team, and I couldn’t have done it without them. I worked hard on building a good culture and giving them more responsibility as they grew.

  4. Pay great (when you can afford to).
    Software devs are expensive, and small businesses can’t always afford to compete on price. But as soon as we were making proper money, we paid our staff well and paid them back for the loyalty they showed in the early years.

  5. Client relationships are your main focus.
    To remain small and lean, we focused on a small group of well-paying clients, over many low-paying clients. So when we found a good fit, we worked hard to truly get to know them and their business goals. Develop mutual trust, and become their long-term technology partner.

  6. Become an expert.
    Act as a consultancy and not just a “dev shop”. Be technically excellent, but also go above and beyond in all phases of the project lifecycle. It’s surprising how many agencies aren’t that great or aren’t consistent. Be consistently great and you can charge accordingly.

  7. Agency life can be endless.
    There’s always another project, and things move fast. If you don’t design the environment you want, chaos will design it for you. Have clear standards, and protect your and your staff’s time to cultivate a relaxed environment.

  8. Build to sell.
    Even if you don’t think you will ever want to sell, create processes, document processes, build pipelines, and don’t allow yourself to be the bottleneck. Empower your team, and learn to delegate efficiently.

I probably have about 16,000 other lessons, but these are my top eight!

I have started a newsletter and blog helping developers start and run their own dev agencies, not spammy at all, totally free, and just a cathartic process for me to brain-dump everything I have learnt on my journey.

Any questions? I’m more than happy to answer anything and provide help where I can!

Cheers,

Chris.
 
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arguino

New Contributor
Read Fastlane!
Read Unscripted!
Jun 24, 2020
14
7
Montreal, Qc, Canada
As a former agency software developper, I have to say my CEO could've used a couple of your advices (all of them really), great lesson!

Read a bit of your blog, did you convince one of your existing freelance client to become your agency's first client?
 

fredz

New Contributor
May 29, 2019
7
4
Thank you for your tips. Yesterday I wrote a post on the forum asking for advices on starting a software development Agency and just like that you posted today !!
If you don't mind answering , what did you do to get your first clients? And how did you handle your first project(s) ?
Did you outsource directly?
Thanks
 

Ramius

New Contributor
Read Fastlane!
Jul 10, 2017
12
9
44
South Yorkshire, England
Great post, Chris. Congratulations on all of your success! I imagine you were a damn good person to work for, rather than just a boss.

My question is actually about your blog. It's quite frankly the best looking blog I've ever seen, and an aesthetic/structure I've been looking for! Everything I found thus far looked a little bit too outdated or poorly formatted. Your site is perfect. Mind sharing the details of how you built and designed it?
 
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fastlane_dad

8 Figure Fastlane Graduate
FASTLANE INSIDER
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Speedway Pass
Jun 20, 2017
161
818
39
Scottsdale, AZ
@Chris Rickard Hey awesome story and welcome to the forum.

Had a very similar journey to yours, but more so on the e-commerce side, that spanned the last 15 years. That culminated in my business partner @NeoDialectic and I selling our business for 8 figures -- to figure out (and give us freedom!) of what this next phase of life shall be! More of my exit here ( My Fastlane Exit )

I like your blog setup as well and I'm sure if you keep growing it, will provide massive value and help many along, especially in the software field.

What are your plans now that you have done some traveling? Do you plan to get back into the same field or do something else?
 
Last edited:

Chris Rickard

Contributor
May 9, 2022
10
33
Australia
As a former agency software developper, I have to say my CEO could've used a couple of your advices (all of them really), great lesson!

Read a bit of your blog, did you convince one of your existing freelance client to become your agency's first client?
Thanks, agencies aren't easy, but I think we were lucky to find our niche fast and leverage that.

My initial co-founder and I were both freelancing before starting the agency, so it was an easy transition.
We just told our clients "pay the invoice to this new bank account", and that was how it all began.

We did however get into sales and marketing quite early, and our first big agency projects were all referrals from friends, family, previous freelance clients, or old work colleagues. This is one of my first recommendations to people starting out - milk your existing network.

From talking to other agencies, referrals are basically how most agencies get off the ground.
 

Chris Rickard

Contributor
May 9, 2022
10
33
Australia
Thank you for your tips. Yesterday I wrote a post on the forum asking for advices on starting a software development Agency and just like that you posted today !!
If you don't mind answering , what did you do to get your first clients? And how did you handle your first project(s) ?
Did you outsource directly?
Thanks
Oh really, damn I wish I had of seen that - could have saved me writing up this post :)

If you take a read of the reply just above your post, I describe how our first clients were from our freelance roles, and the next batch of clients was from referrals. If you are interested, I wrote up a detailed blog post on referrals and why they can be awesome.

Handling our first projects was pretty simple. My co-founder and I were both software developers, so we just did what we know best. The biggest learnings were project management, client management, and scheduling - but this all came later as we got a bit bigger.

We didn't outsource at all. We developed everything ourselves, then when we got too much work we hired a junior, then another, then another - and so on. We focused on development, not design - so we never needed to bring in our companies to help.

We stuck to what we did best, and that worked well for us.
 
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Myster kouadj

Bronze Contributor
Read Fastlane!
Speedway Pass
Mar 13, 2022
166
111
Hey guys,

I am a software developer that started (or rather stumbled into starting) a software development agency.

Financially, it went a lot better than I originally expected. We hit 6 figures in year 1, high 6 figures in year 2, and 7 figures in year 3. We were super happy with this result, and it kept getting better.

Last year after 8 years, I sold my business to a larger agency.

It’s something I had thought about doing for a while. I wanted the opportunity to pursue other interests, and have a long break to plan the next chapter of my life. After travelling in an RV with my wife for the last 8 months, I have certainly had that break!

Anyways, long story short - I ran my business for 8 years, and 8 months ago I sold it.

So I thought it would be poetic to capture the top 8 important lessons I learned from running a software development agency.

  1. It’s tough to do it all by yourself.
    In fact, I don’t think I would have done it. I started my agency with a good friend from university, and later when he moved on to a different venture, my wife joined. Having a partner to “divide and conquer” was great, and the emotional support was integral for me.

  2. Have a niche.
    Don’t try and do everything, otherwise, you’re competing with everyone. We originally focused on building MVPs or startups, and whilst this was fun the money wasn’t great. Custom software for internal business use was our second focus, and that was very successful. We found the niche, started getting great projects, and then hit 7 figures pretty fast.

  3. Your staff are a superpower.
    We were a small, lean team, and I couldn’t have done it without them. I worked hard on building a good culture and giving them more responsibility as they grew.

  4. Pay great (when you can afford to).
    Software devs are expensive, and small businesses can’t always afford to compete on price. But as soon as we were making proper money, we paid our staff well and paid them back for the loyalty they showed in the early years.

  5. Client relationships are your main focus.
    To remain small and lean, we focused on a small group of well-paying clients, over many low-paying clients. So when we found a good fit, we worked hard to truly get to know them and their business goals. Develop mutual trust, and become their long-term technology partner.

  6. Become an expert.
    Act as a consultancy and not just a “dev shop”. Be technically excellent, but also go above and beyond in all phases of the project lifecycle. It’s surprising how many agencies aren’t that great or aren’t consistent. Be consistently great and you can charge accordingly.

  7. Agency life can be endless.
    There’s always another project, and things move fast. If you don’t design the environment you want, chaos will design it for you. Have clear standards, and protect your and your staff’s time to cultivate a relaxed environment.

  8. Build to sell.
    Even if you don’t think you will ever want to sell, create processes, document processes, build pipelines, and don’t allow yourself to be the bottleneck. Empower your team, and learn to delegate efficiently.

I probably have about 16,000 other lessons, but these are my top eight!

I have started a newsletter and blog helping developers start and run their own dev agencies, not spammy at all, totally free, and just a cathartic process for me to brain-dump everything I have learnt on my journey.

Any questions? I’m more than happy to answer anything and provide help where I can!

Cheers,

Chris.
Thank you for the lessons learned.
I checked out your blog, and it's great.
Tell me please, how did you build it?
 

Chris Rickard

Contributor
May 9, 2022
10
33
Australia
Thank you for the lessons learned.
I checked out your blog, and it's great.
Tell me please, how did you build it?

How did I build my blog? Sure thing.
  • I used Ghost as the platform (a great blog, CMS, newsletter platform, member platform etc)
  • With the Dawn theme (you can see I've hardly customised it)
  • Hosted on Linode ($50 credit for new signups, costs $7 per month with backups)
  • Mailgun to send emails (free)
  • EmailOctopus for signup onboarding sequence
  • Revue to add a signup button to my Twitter Profile
  • Zapier to integrate
    • Ghost members into EmailOctopus
    • Revue signups into Ghost
 

Myster kouadj

Bronze Contributor
Read Fastlane!
Speedway Pass
Mar 13, 2022
166
111
How did I build my blog? Sure thing.
  • I used Ghost as the platform (a great blog, CMS, newsletter platform, member platform etc)
  • With the Dawn theme (you can see I've hardly customised it)
  • Hosted on Linode ($50 credit for new signups, costs $7 per month with backups)
  • Mailgun to send emails (free)
  • EmailOctopus for signup onboarding sequence
  • Revue to add a signup button to my Twitter Profile
  • Zapier to integrate
    • Ghost members into EmailOctopus
    • Revue signups into Ghost
OK, thanks . tell me again, there is one thing that I would like to have more clarification, how is the generation of earnings obtained through a website without advertising or sales, that is to say websites on which we only publish items ?
is it only the number of clicks to get to the site that generates income or is it the time spent by a visitor on your site that generates income?
 
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Chris Rickard

Contributor
May 9, 2022
10
33
Australia
OK, thanks . tell me again, there is one thing that I would like to have more clarification, how is the generation of earnings obtained through a website without advertising or sales, that is to say websites on which we only publish items ?
is it only the number of clicks to get to the site that generates income or is it the time spent by a visitor on your site that generates income?
At the moment I am generating no income from my blog and newsletter, I am building an audience
 

Myster kouadj

Bronze Contributor
Read Fastlane!
Speedway Pass
Mar 13, 2022
166
111
At the moment I am generating no income from my blog and newsletter, I am building an audience
Ok I see. It's good. I too will be launching mine in July to build an audience. Because in September I plan to offer products from local stores on my site to deliver to students and pupils in my city.
 

Chris Rickard

Contributor
May 9, 2022
10
33
Australia
Ok I see. It's good. I too will be launching mine in July to build an audience. Because in September I plan to offer products from local stores on my site to deliver to students and pupils in my city.
Yeah awesome, good luck!
 
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