How to run a Service based software Company?

Running a software company is not the same as running a traditional business. In order to run a software company, one must know the basic knowledge of the software world. You can not run a software company if you do not know what you are working on.

Software Development Company

There are two main type of IT companies:

  • Product-Based Software companies like Microsoft, SAP or Google etc
  • Service-Based Software Companies like TCS, Infosys, Cognizant, Wipro etc

Dos and Dont of a Service based Software company.

These are some of the things that I learnt from my couple of years of experience while starting up Orthiya. I tried to come up with a list of things that I think are important while setting up a Software Company. Get prepared to take notes, as these tips and tricks might help you avoid those mistakes that I did.

Its all about Process:

One thing that most new service-based software company get wrong is that they try to run it as a freelancer rather than a company. You must keep in mind that a company requires a process to function properly. Any organization without a process is going to fail in the long run. When you set up a company, your first task should be coming with the process. There must be a defined process on how you will hire people? or How will you get projects? Most importantly what development cycle you would follow, Is your company going to develop projects using the agile model or waterfall model?

Team, Team and Team:

Software company need a technically sound team which knows what to do and how to do it. Make sure the initial team you hire is motivated, dedicated and have the technical knowledge. Do not rely on inexperience developers when you are starting a new company because you would be relying a lot on them during the start of the company. Instead of hiring four inexperience developers, it is better to hire one experienced developer. Most software companies try to save money on salaries but they do not realize any money you save by hiring inexperienced staff will eventually lead to losses in future. A good developer is a great investment, he will help you figure out things, train new staff and eventually lead projects when you are not around.

Tools are your friends:

You are new software company, you can not hire an employee for everything you do. For example it is better to pay 20$ subscription fee for a management tool, rather then hiring a full time manager. This does not mean that you do everything via some tool. Its important to prioritize tasks, because you will need to work on marketing, management, HR and legal issues as well. As a business man, you should know what are your weak point and how you can solve it. If you think that you can solve your accountant needs by using an online tool that cost 10$ a month. Then that is much better then hiring a full time employee who will cost you thousands.

Do not rely on Up-work and Freelancer for all of your projects:

In start, no doubt these 3rd party sites are good for business. But if you are relying completely on these sites, it may not work in future. You are a software company, you will deal 100 of people and some times you might get things wrong and that is okay. Mistakes will happen and you will improve only after making these mistakes. The thing with these 3rd party project providers is that one wrong review, can crumble your entire company. As review stays online forever, it will cause you to lose alot of business and also give a bad name to your company. So it is better to have multiple sources of acquiring projects.


Never give up on what you really want to do. The person with big dreams is more powerful than the one with all the facts. 

H. Jackson Brown, Jr.

No company start perfect, there will a lot of mistakes and errors. Learn from your mistakes, improve your process and team. Running a company and improving it is an incremental thing and it will take time. Change your strategies and see what works for you. Keep trying and not giving up will eventually lead you to success. It will help you achieve your vision and make you stand out.

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