How to Start a Software Company

Last Updated on 2025-05-19

Technology paves the way for the future. If you want to be on the frontlines of the business world, starting a software company might just be your ticket to success. However, starting any type of business isn’t a walk in the park. So, read on and learn how to properly set up a software company.    

The IT industry is one of the highest-earning markets globally. And it’s projected to grow further in the coming years. With emerging techs in high demand, aspiring and veteran entrepreneurs alike are jumping on to the trend of starting a software company. Despite the saturated market, it’s still difficult to break into the business scene successfully.

Starting a software business involves a lot more than just coming up with a creative idea. A lot of entrepreneurs often find themselves in a rut trying to get out of the brainstorming phase. 

The tricky part about starting a software company isn’t the technical stuff. On the contrary, that’s pretty optional. You can run your tech startup without a technical background. The important thing is you have a firm grasp of what problem you’re trying to solve and how you’re going to sell your product as the solution.

Plus, there’s also the challenge of standing out from a sea of other established enterprises. With the boom of the tech industry, software companies are stepping up their game. If you want to build a software company today, you’ll have to keep up with the competition.  

Before we break down the steps of starting a software company, let’s first define what it is and how it operates.

Related Video: How to Start a Tech Company

What is a Software Company?

Software companies are businesses that specialize in creating products and services that leverage the latest technologies. They often delve into areas such as programming, system services, open-source, and software as a service (SaaS). 

A software company generates its revenue through subscriptions, maintenance and support services, software licenses, and more. Most of them use cloud technology to provide convenient access to customers for transactions. 

Some of the biggest names dominating the IT industry today are Apple, Microsoft, and Zoom. But before they transformed into tech giants, they went through their fair share of startup ordeals.

Guide to Starting a Software Company

There’s no one-size-fits-all formula in starting a business. Some of the most successful startup owners came up with their ideas on a whim while others studied it for years. And in the same way, launching a business successfully also doesn’t guarantee success in the long run.

Clearly, you have to put in the full effort to truly gain traction in your business venture. So, here are some of the initial steps you should take in starting a software company. 

1. Identify a Problem

All businesses are designed to address a certain problem. Think of how Steve Jobs came up with the idea that the average citizen could own a computer in their homes.

They paved the way for a new era of technology, competing with other tech giants such as Microsoft to create a home-friendly device. As a pioneer of the PC Revolution, Apple holds its place in the tech world.    

Now, this doesn’t mean you’re supposed to come up with entirely new technology (although that would be great). You can innovate existing technologies and apply them in industries that haven’t leveraged them yet.

For example, the concept of using Artificial Intelligence (AI) for e-commerce. AI isn’t new but integrating it into business operations is certainly innovative.

2. Create a Business Plan

After you’ve finalized what type of service you want to offer, it’s time to organize it. A business plan doubles your chances of reaching your goals. It serves as your guide in launching and managing your startup.

It covers all actionable steps from obtaining a loan, acquiring investment capital, making major purchases, recruiting team members, and strategizing the company’s growth. A software company business plan contains the following points:

• Business Summary – The section that outlines that company’s mission statement and detail about its leadership, employees, and operations.
• Product/Service Description – This section contains the details of the product and services offered. It outlines the pricing, product functionality, and customer benefits. It may also include details about production and manufacturing.
• Target Market – A definition of the target market. It includes competitor analysis and trends in the industry.
• Marketing Strategy – This section describes the company’s strategy to attract its target audiences. It will include a list of distribution channels it will tap into and the future marketing campaign plans.
• Budget – A compilation of the estimated costs related to the operations of the company. This includes staffing, development, manufacturing, marketing, and other operating expenses.

3. Fund your Solution

Once you’ve figured out the problem and the solution, it’s time to put your plan to action. What good is a business plan if you can’t mobilize it? Raising capital for a software startup is incredibly difficult.

Especially so if the amount you’re raising is beyond your bank credit. You’ll have to opt for other fundraising alternatives. Luckily, there are now more opportunities to find investors for your startup.  

You can join accelerator programs or tap into angel investors to get additional funding. The great thing about getting other investors involved is you also get guidance in launching your business.

 4. Hire People

The people you hire play a significant role in the success of your business. As founding members of your company, they set the foundation and dynamics of how your business will operate. Hence, you have to be hands-on in selecting your staff, from the recruitment personnel to your software developers.

You also have to consider how you will hire your team. You can gain access to a wider talent pool through options like outsourcing and freelancing. 

5. Create your MVP

Building a Minimum Viable Product (MVP) is a great way to test the waters. It helps you get initial feedback from your target market. By putting out the initial beta version of the product, you can assess and estimate how it will perform in the long run. It will also serve as your introduction to the industry.  

Build your Software Company with Full Scale

Starting a software startup can be incredibly complicated and frustrating if you don’t have someone to guide you. Mentorship plays a big role in starting your business. You have to surround yourself with people who can bring out the full potential of your idea. Full Scale, in particular, can help you get started on your entrepreneurial journey.  

Full Scale is a software development company that specializes in helping startups succeed. We can help you develop, improve, and maintain your software business. Furthermore, we can provide you with the talent you’ll need for your project. We have seasoned programmers, project managers, and QA specialists ready for deployment.

Ready to start your business? Get your FREE Consultation today!