How to Start a Software Business (Sell Software Online)

If you’re ready to develop your own software and sell it online, congratulations, you will benefit from the expected 8.48% CAGR growth rate of the Global Software Industry Market during the period of 2024-28. The revenue in the software market is expected to rise at an annual growth rate of 5.27% resulting in a volume of USD 858.10 Bn by 2028!

We are sure you are convinced to build a software company and wish to learn how to start.  However, you must take into consideration all the facets to build something from scratch. But don’t worry, we shall break it down for you so that it is easier for you to have a checklist and launch your small business quickly.

Identifying a Niche to Start a Software Company

There are various small and big tech companies that sell software’s online. You must research well before pinpointing your niche or product idea. Look at the target market’s demand, the types of software products available, how you can make your product stand out, type of business that exists, and what future development opportunities are available in the software market.

Your Software  can be for gaming, service-based, applications, plugins, SaaS Products, collaboration platforms, creative design platforms, and so on. Initially, decide the type of software that you wish to sell and then funnel it down to a niche before any further processing.

Setting Up a Business Plan and Product Development

Once you have narrowed down your niche and idea of the product, it’s time to use your software engineering skills.

Define Features and Functionalities of New Software

On studying the software market intensively, you would identify your competitors and the features they offer. Now, it’s time for you to stand out. Thus, define what you want to build exclusively. What benefit would the users receive in using your product instead of your competitor’s. It can be a monetary benefit, a plan type benefit, or an exclusive feature benefit.

Ask Software Developers to Create Minimum Viable Product (MVP)

Based on your product and its features, take help of your development team, create an MVP to be tried and tested by initial users. This will help you identify initial problems and feedback to make your product better. If you are developing an application, do a Beta Run testing to gain valuable user feedback from your target market. 

Setting Up a Realistic Timeline for a Successful Business

Developing a Product that is ready to sell is not a one day task. You will have to go through a lot of trial and error process, get multiple feedback, get industry expert’s insights, and keep making your product better. Even after the launch, you will need to keep updating it and providing bug fixes as and when needed for a smooth run. When you intend to start a business, you must validate the idea before so that you can be sure of your product.

Thus, it is important to set a realistic timeline and milestones for your product. By what time you wish to be ready with the MVP, under what time you want to incorporate feedback, when do you plan to launch, after how many users you would provide a version update, and so on. A roadmap is essential to start a business selling software online.

Setting Up the Software Product Startup

Once you are ready with the roadmap about your product and confident in your offering, it’s time to set up your online business structure to start selling. Consider the following 4 Steps to be ready to welcome the success of your software. 

Setting up the Storefront to Sell

You must make a decision as to where you want to sell your products. You can list your products on a third party platform like CodeCanyon. It provides a marketplace to sell videos, audios, documents, graphics, photos, 3D files, and a lot more.

You can also decide to sell your product online on your own Website. You need to create and launch a Website with the help of WordPress. Get a domain name, choose a hosting provider, and install WordPress. Post that you will need to obtain necessary plugins to set up your storefront to sell. 

Readying up the Documents

Before putting out your software product, you must have your user guides and tutorials active. When you have a user guide ready and some tutorial videos on your Website, it will provide a good impression to the onlookers. They will have some material to look at to better understand your product.

There must also be certain FAQs and Troubleshooting Resources for the new buyers and users of your software. The bank of these documents would act as a source of trust and resources to understand your product.

Choosing a Business Model for Distribution

You decide how you distribute your product. There are various options available,

• Downloadable Software
• Subscription Based Plan
• Freemium Model
• Single Time Purchase Model
• Free Trial or Demo

Customer Support Infrastructure

You must set up a support system before you make your first sale. The support can be in the form of email, chat/bot support, or a ticket raising system. With an established support system, your customers would know that even after making a purchase and paying money, the team will be there for query solving and updates as and when required.

This will build loyal customers and good testimonials thus, promoting word of mouth marketing.

Targeting Right People with Market Research

To sell software online, market your software online. Creating your WordPress Website and listing your software product will not start business for you. You need to make people sitting on the Web aware about your product’s presence and its utility.

Start Content Marketing by providing high quality blog posts, tutorial videos on how to navigate through your software, other bonus videos for tips and tricks, and infographics. Your Content Marketing efforts should be tied up with SEO best practices to create organic traffic.

Digital Marketing and Social Media Marketing are other interlinked ways for developing a lucrative business model. Use Pay Per Click (PPC), Paid Campaigns, Backlinking Strategies for off-page SEO to target specific groups of people and attract them to your Website Storefront.

You must generate leads with all these tactics and enhance your email marketing list for a wider reach. Start a Weekly Newsletter to be in touch with your users and give them up-to-date information. 

Resources to Scale a Successful Software Company

When you launch your Software Startup, you can’t just think about creating one product, listing it on a Website, and selling it to earn passive income. A software selling business is an active process wherein you need to plan the future of your product as well.

You must set a timeline for updates, new releases, extension to your software, new features, or a related new product. This will also let customers know that you are serious about your product and would keep helping them with it after the purchase.

You need to think about scaling the infrastructure to handle future growth. You must have shortlisted cloud solutions and server management for when it’s time to scale up. Not just that, you might need to rent an office space, hire developers, get a tax identification number, file for necessary patents and trademarks, to establish a profitable business in the long run. 

Challenges to sustain the Software Industry

Evolving Regulations

There are evolving regulations attached to software selling which the companies need to look out for. You must be compliant with them. Some of the regulations that you need to look out for are PSD2, GDPR, and CCPA.

Difficulty in Finding Right Customers

Getting customers for whom your software will be a best fit is tough when it’s a new business. Even when you create a product that is aimed at a specific market segment, it is tough to convince them to shift technologies and adapt to a new system.

Market Saturation

The Software market is a bit too crowded. Having an immense potential, many developers are joining this market. Thus, the competition is high and you will have to make enough efforts to stand out. Your business expertise and marketing strategies must be put to use extensively.

Piracy and Intellectual Property Breach

A Software is your intellectual property and you must protect it by obtaining the necessary patents after the development process is complete of a product. 

Timely Technical Support

It can get challenging to respond to user queries on time. If you have put out your product internationally, you need to look at the time zones and be active during their work hours to support them with bugs and errors. Sometimes, this can be a 24-hour process and you might need to hire a support team to work in different shifts. It’s a long shot but if your business is scaled in the right direction, this will be a part of it.

Payment Processing

Incorporating secure payment gateways and enabling multiple ones to support international currencies as well is a task. The issue of currency conversions and refunds can be a confusing deal to set up.

Software Compatibility

Will your software be compatible with all operating systems that the users might have? You will need to run a lot of trial and errors to make your product compatible with all versions and while selling, make necessary changes as per the client requirement. You must be ready for this add-on task.

Setting Up a Legal Structure of your Business

When you start creating a software, you are doing a startup of your business. The startup would act like a small business administration wherein you need to file business information legally. You need to get permits and licences and a document that outlines the business details. 

To expand your business in the future, you need to get a tax number, file tax returns, and think of ways to get grants and loans. With quality control and assurance, your business is bound to scale for which you need to plan beforehand. So, your decisions and actions should be in the future direction of creating a lot of software and offering a product with new development at regular intervals. 

Tools for the Software Development Companies

There are various tools helping you to set up your software startup. The tools help you from selling online to integrating payment gateways, licensing support, marketing, distribution, customer support, and even security and piracy. Look at the list of tools that can be explored by you.

• Explore marketplaces like Shopify, WooCommerce, CodeCanyon to list your product on an established online store front and start selling quickly.
• Payment Gateways like PayPal, Stripe, Mollie, Paystack can help you with setting up different currencies and generate payment accordingly.
• Look at email marketing software of MailChimp, ActiveCampaign and HubSpot Email Marketing.
• Hubspot also provides you with a customer support software that can aid you in setting up a robust support system. You can also check out Zoho, Zendesk, and FreshWorks.

Thus, based on your requirements, you will come across various tools that can make the process a little easier for you.

Inspiring Software Development Business

BookingPress

is a perfect example of creating your own Website as a one stop shop and one stop solution for your software. You can look at the features, study add-ons, check for documentations and video tutorials, and also access blogs from one place. You can even take chat support or opt for contacting them for various needs.

The Website is well set and the software can be purchased then and there once your queries are resolved. If you’re planning to develop your Website on WordPress, you must plan for all levels of precision that you would gradually add on.

Gaming Softwares

Look at Gamestheshop, a dedicated marketplace to sell gaming software. If you are planning to create a gaming software, look out for such marketplaces. They are frequented by gaming lovers to look out for new updates. You never know when your product hits and becomes a cult in the gaming community.

ARMember

Check out ARMember, a WordPress Plugin to create membership Websites. It has its own landing page, however, it is listed on a third party marketplace CodeCanyon. You can choose to launch your software in this way wherein it has its landing page and website, however, on purchase, it is redirected to a marketplace to handle payment gateways.

Launching a Software Business in 2024

Selling software online is a very thorough process and you must have a blueprint of the future ready when you list your first software product. This will help you in sustaining the tough competition and penetrate the market of high competition. You must stand out in some or the other way to differentiate yourself from your competitors.

FAQs to approach this Model

1) Are there any legal requirements to start a software business?

2) How do I Price a Software?

3) What is the best place to sell online?

Creating your own storefront by launching a Website is the best place to sell online. However, if you are new to the technology arena and want an easy solution for short duration, you can sell online on Amazon, Etsy, WooCommerce, eBay and many more such online marketplaces.

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