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fredz

New Contributor
May 29, 2019
7
4
Hello,
Being a student in the software development field, a friend of mine (he's a rental business owner) contacted me to help him.
He was tired of always filling paper forms and available software is very expensive, so he asked if I could create a software that could help him automate his daily tasks and manage his assets in one place.

Fast forward 3 months, the software is almost finished and he's happy with the result because he started using it in his business.

This got me thinking, if I provided value for this person and helped him, surely I can do it for other business owners.

I started looking into starting my Software Development agency (not marketing, I will only focus on creating software/apps that improve small businesses processes).

However, I'm feeling really lost and I have so much questions (ex: About handling multiple projects, getting customers for software projects ,scalability,etc..) and this is why I'm asking if there are some people in this forum that launched their software development Agency that could maybe answer some questions and offer advice !

Thank you

**This is my first post on this forum, happy to join you on this journey :)
 
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NeoDialectic

Successfully Exited the Rat Race
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Feb 11, 2022
93
466
Phoenix, az
Hello,
Being a student in the software development field, a friend of mine (he's a rental business owner) contacted me to help him.
He was tired of always filling paper forms and available software is very expensive, so he asked if I could create a software that could help him automate his daily tasks and manage his assets in one place.

Fast forward 3 months, the software is almost finished and he's happy with the result because he started using it in his business.

This got me thinking, if I provided value for this person and helped him, surely I can do it for other business owners.

I started looking into starting my Software Development agency (not marketing, I will only focus on creating software/apps that improve small businesses processes).

However, I'm feeling really lost and I have so much questions (ex: About handling multiple projects, getting customers for software projects ,scalability,etc..) and this is why I'm asking if there are some people in this forum that launched their software development Agency that could maybe answer some questions and offer advice !

Thank you

**This is my first post on this forum, happy to join you on this journey :)
Are you asking for advice on selling this particular software as a business solution or are you asking for advice on starting an agency where people come to you to build custom software for their business? I think you are asking about the latter.

Hopefully someone chimes in with direct experience in this field, but I can provide a more general point of view.

This is a huge field with basically unlimited options for businesses. Everything from single job contractors (example: Upwork) to fortune 500 level software development agencies.So that means the biggest questions you will have to answer is
  • How will I get customers to notice my Agency?
  • Once noticed, what about my Agency will make them want to pick me over the next one?
As it turns out, your current situation seems to have taken care of the hardest part of the entire process. Your friend hired you because of proximity and familiarity. If you have alot of powerful friends or alot of friends with businesses, this is surely a business model you can reproduce. Do you?

If not, then you need to start thinking about how you will answer those questions.

If you do not know the answer to the questions, one possible want to get the ball rolling is by providing your service in places like Upwork. It will hone your skills, expand them, possibly get you contacts, and most importantly it may shed light on what you may be specifically good at and the value you can provide. There is basically zero cost to start and you will right away have to start experimenting and finding how to adapt to get work.

Another way would be to get creative. For example, literally walking into small store fronts and asking if they need help or if there is software that would help their every day. Maybe you will get 1 yes after 100 no's. Maybe you will notice that 20% of them have the same type of unaddressed need but they don't want to spend money hiring somoene to make custom software. So then you can make a generic solution and next time you walk in with a basically made product and clear price tag. "I can solve your X issue and save 2 hours of your employees time every day for $2,000".
 

Andreas Thiel

Bronze Contributor
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Aug 27, 2018
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You might be able to run a business that way, but usually completely custom developed projects are really expensive for a good reason.

One huge issue is: how good are you at gauging feasibility and coming up with effort estimations?
Even for professionals with decades of experience this part is crazy hard.

There are many stories of people who miscalculated a fixed price offering and ended up investing more than they got out of projects.
Is the solution making "time and materials" type deals - charging for the time you actually need to finish the project? For many customers the uncertainty might be a deal breaker. Imagine the friction or drama when you realize that you were off by orders of magnitude with your initial estimates.

Agile methodology can mitigate that problem to a certain degree, when you negotiate prices for incremental releases with a limited set of features.
However, some projects require long spans of research and feasibility research / proof of concept projects.

When you look at Fox's thoughts on how to approach Web Design projects, you could probably bring aspects of that to a general software development agency (Guide).
You could offer a free initial interview, clarify their requirements and even do some free research and a feasibility study (time-boxed).
Based on the results you can then create an offer.

I suppose you should offer a high end service first and not take on many project. Over time (with the permission of your clients) you might be able to build up a library of tools that you can reuse and low budget deals when you are certain that you can deliver something quickly with little effort because you have done similar things.

Something that might be counter intuitive: your sales process would primarily have to be a process of elimination.
The biggest difference between if you make it or not would probably be the kind of project that you have to work on.
You need to be able to say no.
There are many classics when it comes to problematic customers. People who change the requirements all the time or customers that can't seem to provide clear functional requirements.
 

fredz

New Contributor
May 29, 2019
7
4
Are you asking for advice on selling this particular software as a business solution or are you asking for advice on starting an agency where people come to you to build custom software for their business? I think you are asking about the latter.

Hopefully someone chimes in with direct experience in this field, but I can provide a more general point of view.

This is a huge field with basically unlimited options for businesses. Everything from single job contractors (example: Upwork) to fortune 500 level software development agencies.So that means the biggest questions you will have to answer is
  • How will I get customers to notice my Agency?
  • Once noticed, what about my Agency will make them want to pick me over the next one?
As it turns out, your current situation seems to have taken care of the hardest part of the entire process. Your friend hired you because of proximity and familiarity. If you have alot of powerful friends or alot of friends with businesses, this is surely a business model you can reproduce. Do you?

If not, then you need to start thinking about how you will answer those questions.

If you do not know the answer to the questions, one possible want to get the ball rolling is by providing your service in places like Upwork. It will hone your skills, expand them, possibly get you contacts, and most importantly it may shed light on what you may be specifically good at and the value you can provide. There is basically zero cost to start and you will right away have to start experimenting and finding how to adapt to get work.

Another way would be to get creative. For example, literally walking into small store fronts and asking if they need help or if there is software that would help their every day. Maybe you will get 1 yes after 100 no's. Maybe you will notice that 20% of them have the same type of unaddressed need but they don't want to spend money hiring somoene to make custom software. So then you can make a generic solution and next time you walk in with a basically made product and clear price tag. "I can solve your X issue and save 2 hours of your employees time every day for $2,000".
Thank you very much for your answer !
I think that what you said regarding work with other friends with businesses is an avenue I might explore to get started.
Also, by looking at what you said there, I think I should be more vocal about what I'm doing, because I just realised that I know some people who are business owners but they only think I'm a student (not someone who could actually help them ). Maybe it would be good if I "legally" start my Agency and take action towards gaining awareness and showing that I can provide value.

I think the thing stopping me is fear and overthinking about possible future problems, but at the end of the day I just need to start and handle everything when it comes.

I really liked what you said about walking into small store fronts :) . I never really thought about it but it makes sense.

Again thank you ! Your insight opened my eyes on a lot of things.
 
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fredz

New Contributor
May 29, 2019
7
4
You might be able to run a business that way, but usually completely custom developed projects are really expensive for a good reason.

One huge issue is: how good are you at gauging feasibility and coming up with effort estimations?
Even for professionals with decades of experience this part is crazy hard.

There are many stories of people who miscalculated a fixed price offering and ended up investing more than they got out of projects.
Is the solution making "time and materials" type deals - charging for the time you actually need to finish the project? For many customers the uncertainty might be a deal breaker. Imagine the friction or drama when you realize that you were off by orders of magnitude with your initial estimates.

Agile methodology can mitigate that problem to a certain degree, when you negotiate prices for incremental releases with a limited set of features.
However, some projects require long spans of research and feasibility research / proof of concept projects.

When you look at Fox's thoughts on how to approach Web Design projects, you could probably bring aspects of that to a general software development agency (Guide).
You could offer a free initial interview, clarify their requirements and even do some free research and a feasibility study (time-boxed).
Based on the results you can then create an offer.

I suppose you should offer a high end service first and not take on many project. Over time (with the permission of your clients) you might be able to build up a library of tools that you can reuse and low budget deals when you are certain that you can deliver something quickly with little effort because you have done similar things.

Something that might be counter intuitive: your sales process would primarily have to be a process of elimination.
The biggest difference between if you make it or not would probably be the kind of project that you have to work on.
You need to be able to say no.
There are many classics when it comes to problematic customers. People who change the requirements all the time or customers that can't seem to provide clear functional requirements.
Hey Andreas, this was exactly one of my biggest concerns.
By working on this project I realized that I miscalculated so much things, and let's say if I had for example 3 customers at the same time, then It would be chaotic and I would never finish any of them.
What do you think about having employees(Freelancers) at an early stage? I didn't find anything related to this in Fox's threads.

For example, let's say I just got 2 contracts. In addition to working 9 to 5 this summer and back to school next fall , I don't think I would be able to code 2 projects + in a respectable timeframe for my customers , because there are so much things related to software development (Architecture,Dev,Testing,etc..).
I want to provide the best products because at the end of the day my goal is to provide value that will last and not only to make a quick $$, so I need to have a great reputation.

One thing I thought about is maybe to take care of the Architecture part and assign the easy stuff (For example: Development of user interface) to freelancers so it could speed up the development, but again I have no idea so this is why I'm asking if someone can recommend something that might help :)
 

Andreas Thiel

Bronze Contributor
FASTLANE INSIDER
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Speedway Pass
Aug 27, 2018
455
468
41
Karlsruhe, Germany
Hey Andreas, this was exactly one of my biggest concerns.
By working on this project I realized that I miscalculated so much things, and let's say if I had for example 3 customers at the same time, then It would be chaotic and I would never finish any of them.
What do you think about having employees(Freelancers) at an early stage? I didn't find anything related to this in Fox's threads.

For example, let's say I just got 2 contracts. In addition to working 9 to 5 this summer and back to school next fall , I don't think I would be able to code 2 projects + in a respectable timeframe for my customers , because there are so much things related to software development (Architecture,Dev,Testing,etc..).
I want to provide the best products because at the end of the day my goal is to provide value that will last and not only to make a quick $$, so I need to have a great reputation.

One thing I thought about is maybe to take care of the Architecture part and assign the easy stuff (For example: Development of user interface) to freelancers so it could speed up the development, but again I have no idea so this is why I'm asking if someone can recommend something that might help :)
When I mentioned Fox I thought about the book. It is mostly about really listening to the customer, acing the first interview and targeting companies that have money as well as pain points that justify spending significant amounts of money on.

Sure, ideally you'd outsource everything to people who have 20 years of experience and are highly specialized.
Many people suggest designing your business model this way. Either you automate everything, or you specialize primarily somewhere in the sales process.
Then you just outsource and manage the fulfillment. There are enough books about working with freelancers that way.

The thing is
a) you can't plan everything out this way - will you even be able to hire somebody in this environment?
b) how is your financial situation - can you afford to pay freelancers even if the customers pays after the project has been completed? If your plan is charging upfront, are you able to do that each time?

This is why people here usually suggest that you should start by helping one customer (which you did) ...
and then keep adding to the business.
If you plan too far ahead, then it all might fall apart when your plans meet reality.
It might not be the best idea to go big right away. You need to test assumptions.

Basically, the questions are too vague and there is too much uncertainty. The answer is always: "it depends" ... maybe you get a careful "it CAN work".
Nobody can give you detailed steps that you just need to follow.

But one thing you should do is calculate what kind of numbers you'd need to meet to stay afloat initially ... and if you are happy with the best case scenario on paper.
Many people figure out that creating a highly specialized, customizable standard software rather than starting from scratch each time is more appealing, for example.
 

Chris Rickard

Contributor
May 9, 2022
10
33
Australia
Hello,

Being a student in the software development field, a friend of mine (he's a rental business owner) contacted me to help him.
He was tired of always filling paper forms and available software is very expensive, so he asked if I could create a software that could help him automate his daily tasks and manage his assets in one place.

Fast forward 3 months, the software is almost finished and he's happy with the result because he started using it in his business.

This got me thinking, if I provided value for this person and helped him, surely I can do it for other business owners.

I started looking into starting my Software Development agency (not marketing, I will only focus on creating software/apps that improve small businesses processes).

However, I'm feeling really lost and I have so much questions (ex: About handling multiple projects, getting customers for software projects ,scalability,etc..) and this is why I'm asking if there are some people in this forum that launched their software development Agency that could maybe answer some questions and offer advice !

Thank you

**This is my first post on this forum, happy to join you on this journey :)

Hey fredz, I feel you can definitely help other people, but you need to take it one step at a time.

I was in a very similar position to you in 2012, I was freelancing for a year or so, and then ended up starting an agency from it.

My agency focused on software (not design, marketing, brochure websites, or SEO) - and it worked well for us.
I just told some of my story on the forum post 8 Things I Learnt From Starting, Running, And Selling A Software Agency, and I write a lot more about it on my newsletter and blog Dev to Agency (helping developers start agencies).

> However, I'm feeling really lost and I have so much questions
It's good to do research, but remember you don't need to have an answer for every little question right at the start.

From having just exited my agency, one of the most important things I would say is to clearly define why you want to do this. What is your end goal? What do you want to be waking up and doing in 1 year's time? 2 years, 3 years?
Write this down.

The next thing you should do is capture what you want to work on. What are you best at? What do you enjoy? What types of projects excite you?

For my agency, it was internal software for businesses.

Usually, businesses that made money, and needed to automate or improve their workflows and processes to help them make more money (or save more money). Often the businesses were boring (like transport, logistics, healthcare, and financial services) - but the problems we were solving were interesting, and I found them exciting.

I loved talking to these companies, understanding their problems, and then describing to them how technology could improve their business and where.

I also loved building software, and architecting an elegant solution - but ultimately you need to love solving the business's problem, not just code.

It's awesome that this first project opened your eyes, and that you want to do more of it - but I don't think you necessarily need to jump in headfirst and register a company name, build a complex website, get business cards, learn how to manage staff, etc... Approach it like a MVP (minimum viable product), but an MVA (minimum viable agency).

What is the smallest amount of work you can do to...
a) Validate to yourself that client services is what you want (and what you expected)
b) Validate that you can find clients (this will be the hardest part)
c) Validate that being the CEO of a small business is what you want

Know where you want to go, and take small strategic steps to get there.

It's new territory, so you may change your direction along the way - and that's great.
That's the benefit of starting small.

As you have only completed one project by yourself (and the client approached you) - I wonder if your next steps should be to just keep acting as a freelancer, whilst you gain confidence and experience. Even for just another project or two.

So you can do this under your personal name, create a simple portfolio website, and then try and find your next client. You will still gain many of the learnings about client services, and not need to make big commitments.

Don't stress yourself out too early about having too much work, or how to manage projects or how to hire staff, the best way to learn is on the job, on smaller projects, learn as you need to, and get paid to do it!

So your next step really is just to find your second project.

I replied in my other thread about this, but I think a great way to find your next project is via referrals.
I have a detailed blog post on this (sorry to spam but it really is what you are looking for).

Keep us informed on your journey mate, I'm on here but also have a small but active community of developers starting agencies on Twitter if that's your thing.

Cheers,

Chris
 
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fredz

New Contributor
May 29, 2019
7
4
I suppose you should offer a high end service first and not take on many project. Over time (with the permission of your clients) you might be able to build up a library of tools that you can reuse and low budget deals when you are certain that you can deliver something quickly with little effort because you have done similar things.

Hey fredz, I feel you can definitely help other people, but you need to take it one step at a time.

I was in a very similar position to you in 2012, I was freelancing for a year or so, and then ended up starting an agency from it.

My agency focused on software (not design, marketing, brochure websites, or SEO) - and it worked well for us.
I just told some of my story on the forum post 8 Things I Learnt From Starting, Running, And Selling A Software Agency, and I write a lot more about it on my newsletter and blog Dev to Agency (helping developers start agencies).

> However, I'm feeling really lost and I have so much questions
It's good to do research, but remember you don't need to have an answer for every little question right at the start.

From having just exited my agency, one of the most important things I would say is to clearly define why you want to do this. What is your end goal? What do you want to be waking up and doing in 1 year's time? 2 years, 3 years?
Write this down.

The next thing you should do is capture what you want to work on. What are you best at? What do you enjoy? What types of projects excite you?

For my agency, it was internal software for businesses.

Usually, businesses that made money, and needed to automate or improve their workflows and processes to help them make more money (or save more money). Often the businesses were boring (like transport, logistics, healthcare, and financial services) - but the problems we were solving were interesting, and I found them exciting.

I loved talking to these companies, understanding their problems, and then describing to them how technology could improve their business and where.

I also loved building software, and architecting an elegant solution - but ultimately you need to love solving the business's problem, not just code.

It's awesome that this first project opened your eyes, and that you want to do more of it - but I don't think you necessarily need to jump in headfirst and register a company name, build a complex website, get business cards, learn how to manage staff, etc... Approach it like a MVP (minimum viable product), but an MVA (minimum viable agency).

What is the smallest amount of work you can do to...
a) Validate to yourself that client services is what you want (and what you expected)
b) Validate that you can find clients (this will be the hardest part)
c) Validate that being the CEO of a small business is what you want

Know where you want to go, and take small strategic steps to get there.

It's new territory, so you may change your direction along the way - and that's great.
That's the benefit of starting small.

As you have only completed one project by yourself (and the client approached you) - I wonder if your next steps should be to just keep acting as a freelancer, whilst you gain confidence and experience. Even for just another project or two.

So you can do this under your personal name, create a simple portfolio website, and then try and find your next client. You will still gain many of the learnings about client services, and not need to make big commitments.

Don't stress yourself out too early about having too much work, or how to manage projects or how to hire staff, the best way to learn is on the job, on smaller projects, learn as you need to, and get paid to do it!

So your next step really is just to find your second project.

I replied in my other thread about this, but I think a great way to find your next project is via referrals.
I have a detailed blog post on this (sorry to spam but it really is what you are looking for).

Keep us informed on your journey mate, I'm on here but also have a small but active community of developers starting agencies on Twitter if that's your thing.

Cheers,

Chris
Thanks Chris, this really answered all my questions ! Your Blog is awesome, I'm reading it at the moment. I'll definitely update you guys on my journey if it can help or inspire people who are in the same situation as me.
 

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