Do a lot of market research to find out if there is any current or potential competition. Consult with experts in your field and set up focus groups to provide feedback on your idea. Your local chapter of the American Marketing Association can help with this. [1] X Research source Make sure your product idea is viable. Speak with experienced software developers and test out your idea to see if it is doable before making further investments of time and money. Have them sign a non-disclosure agreement (NDA) before discussing the idea.
A template for a non-disclosure agreement can be found online. You may want to hire an intellectual property attorney to see if your product qualifies for a patent. Visit the U. S. Patent Office website for instructions on how to search for existing patents and how to file for a new one. [2] X Trustworthy Source United States Patent and Trademark Office U. S. government agency responsible for registering and protecting patents and trademarks Go to source You can trademark your product by adding a “TM” symbol whenever you use your product name. A registered trademark that prevents others from using your product’s name needs to be obtained from the U. S. Patent Office.
Your business concept: The focus here is on describing your business and the market for your products. Market research: Market research is critical, as it describes the nature of the market you are entering into. Identify who your major competitors are, who your target market is, and the preferences and needs of your target market. A marketing plan: This should describe how you plan on addressing the needs of your market, how you will communicate with customers, and how you will advertise your product. An operations plan: This will describe your operations on a day to day basis. It would include, for example, how you plan to develop the product, a timeline, and people and equipment required. A financial plan: This would outline how you will finance your business, what your expected costs are, and projections as to your revenue.
Sole proprietorship – A sole proprietorship is owned and run by one person, and there is no legal separation between the individual and the business. As a result, all profits, losses, debts and deeds of the business are your responsibility. This option can be attractive for a small business due to its ease of formation, and due to the complete control it provides. [4] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source Partnership – A partnership simply refers to the sharing of ownership between two or more people. Partnerships are formed through the negotiation of an agreement between the partners (assisted by a lawyer usually), and each individual partner is liable for his or her share of profits, losses, or liabilities. This can be attractive if you are choosing to run the business with another person to take advantage of combined skills. [5] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source Keep in mind that each partner is generally liable for the full debts of the partnership. Partners may have to seek payment from the other partners separately if they do not pay their share of a debt. The amount of liability depends upon the terms of any loans the business takes out. Limited liability company (LLC) – To start an LLC, you must, at a minimum, choose a name and file articles of organization with your state, often for a fee. LLC owners pay taxes on their proportion of profits through their individual income tax returns and have to pay self employment tax, but are protected from personal liability for the decisions and actions of the company. [6] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source Corporation – An independent legal entity owned by shareholders. To register your corporation you must choose a company name and file articles of incorporation with your state. You will also need to register with the IRS and get a tax ID. Corporations file taxes separately from their owners. This may prove advantageous, allowing owners to take advantage of the corporate tax rate, but it may also lead to double taxation (which refers to your corporation’s income being taxed, followed by your income from the corporation being taxed when the company pays a dividend or makes a distribution). You should speak with your lawyer or accountant to see if this form of business will benefit you. This structure is generally not appropriate for smaller businesses. [7] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source
You can search the specific requirements of your state online. This process typically only takes a few minutes to complete. This is typically useful for sole proprietorship, since not using a DBA name means that your business name will automatically default to your personal name. Note that a DBA name is also required if you are starting a corporation.
There are also permits and licenses that may be required by your city or county. The best way to find out if your particular business requires any unique permits is to contact your city, describe your business, and inquire about any requirements. For example, many cities require “Home Occupation Permits”, if you plan to operate a business from your home. Consult an accountant or attorney, if necessary. [11] X Research source It is important to have liability insurance for a software company in case your software has a bug that ruins your client’s computer system. [12] X Research source
Explore venture capital funds. Contact venture capital firms that have previously funded software companies to discuss the possibility of entering into an agreement. Do an online search to find companies that have provided early-stage funding for products similar to yours. Note that you will be giving up equity in your company if you accept venture capital funding. Research grants and loans. Contact your local Small Business Administration office to see if you qualify for an SBA-backed bank loan. Explore the availability of funding from local universities who may be interested in financing start-up companies. [14] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source Find investors among relatives and friends. Discuss your software product idea with family and friends to explore the possibility of their investment in your business. Consider online funding sources such as the Lending Club and Kickstarter. [15] X Research source [16] X Research source
You will need to hire a freelancer to design packaging if this is a product that will be offered on a store shelf. You will also need to hire a company to manufacture the CDs, if applicable.
Advertise on job boards such as Monster. com and Indeed. com. Be very specific about the skills and number of years of experience you are looking for. In addition to knowing the right programming languages, look for those who have experience working on teams to bring a new product to market. Check all references carefully. Ask friends and colleagues in similar types of software industries for recommendations.
Before creating the time line, get input from your development team and outside experts to make sure the time allotted is appropriate for the type of software you are brining to market. You want to beat any other potential competition, but you do not want to offer a product that is full of bugs because it was rushed. Oversee the development process. Facilitate clear communication between you and your development team to ensure that everyone is operating under the same product vision. Hold status meetings weekly to make sure progress is being made according to your timeline.
Write up a complete set of testing procedures and make sure all testers are following it to the letter. If steps are skipped it will not be a valid test.
Choose beta testers from industries that you previously determined have a need for your type of software.
Marketing professionals should be getting feedback on product features, etc. , from potential customers rather than just from the software developers in your company. Develop a website and a Facebook page for your company when your product is ready to launch. Provide a lot of “teasers” about what is to come and what the software will be able to do for them.
Licensing fees are usually a one-time charge for the life of the product, such as purchasing the current version of Microsoft Office. A time-limited subscription would be for a specific period of time before an additional charge is incurred. This would be appropriate if you foresee a lot of upgrades being released. Per transaction would be a charge every time the customer uses the software such as at a point of sale.
