From Idea to Success: How to Start Your Own Software Company
The idea is there - but now it's about implementation. Here you will find everything you need to know about starting your own software company!
- Why it's worth starting a software company
- Which legal form is suitable?
- Choosing the right software area
- 9 tools that can help with founding
- Conclusion: Starting a software company
Do you have an idea for the next big app or ultimate program? Then you should definitely consider starting your own business! But what exactly do you need for this and what should you pay attention to? In this article you will find tips and tricks on what you should consider beforehand.
Why it's worth starting a software company
There are many reasons to start a software company. Here are some of the most important ones:
Innovation potential: The technology industry is constantly changing and offers countless opportunities for innovative ideas and business models. As the founder of a software company, you have the chance to develop innovative products and services.
Growth Market: Demand for software products and services is steadily growing as companies and consumers increasingly operate digitally and rely on technology. As a founder, you can benefit from exactly this growth market.
Flexibility: Starting a software company gives you the opportunity to build and run a business according to your own ideas. You can design your working hours and conditions flexibly and adapt the company to your needs and those of your customers.
Scalability: Software products and services are generally scalable, which means you can expand your business quickly and effectively without having to increase infrastructure and personnel needs to the same extent.
Earning potential: As the founder of a software company, you have the opportunity to build a successful company and earn considerable income. If you are able to develop innovative products and services that meet high demand, it can definitely be worthwhile.
Self-realization: Many people dream of starting their own company and putting their visions and ideas into practice. Starting a software company gives you the opportunity to realise your creative and entrepreneurial ambitions.
Which legal form is suitable?
There are several legal forms for starting a software company. The choice of legal form depends on various factors such as capital requirements, number of founders, extent of liability or taxation. Here are some of the most common legal forms for a software company:
Sole Proprietorship: A sole proprietorship is the simplest form of company formation. In this case, founders are personally liable for all debts and obligations of the company. The sole proprietorship is suitable for single founders who want to start with little capital and want to take on limited liability risks.
GbR: A Gesellschaft bürgerlichen Rechts (GbR) is a form of partnership in which two or more individuals start a business together. The partners are personally and unlimitedly liable for the debts and obligations of the company. The GbR is suitable for those who want to start a company together and for whom a sole proprietorship is not an option.
GmbH: The Gesellschaft mit beschränkter Haftung (GmbH) is one of the most common legal forms for a software company. The partners are only liable for the debts of the GmbH with their capital contribution and are not personally liable. The foundation of a GmbH requires a minimum capital of 25,000 euros, which can be a challenge for many founders. However, the GmbH offers the advantage of a clear limitation of liability and a good reputation with business partners.
UG (haftungsbeschränkt): The Unternehmergesellschaft (haftungsbeschränkt) or short UG is a variant of the GmbH that can be founded with a lower share capital of at least 1 euro. The UG thus offers a possibility to found a GmbH also with little capital. However, the liability risks with a UG are higher than with a GmbH.
AG: The Aktiengesellschaft (AG) is a corporation where the share capital is divided into shares. The shareholders are only liable with their capital contribution and are not personally liable. The foundation of an AG requires a minimum capital of 50,000 euros, which is a hurdle for many founders. The AG is particularly suitable for larger companies that want to be listed on the stock exchange.
Choosing the right software area
There are various software areas that are suitable for starting a software company. The three most common areas are Software-as-a-Service (SaaS), standard software, and custom software solutions. Each of these areas has its own advantages and disadvantages, which should be considered when starting a software company.
Software-as-a-Service (SaaS)
SaaS refers to a cloud-based software solution that is used by customers over the internet. The software is provided and managed by a provider, and users usually pay a monthly or annual fee for the use of the software. SaaS offers several advantages, such as:
Lower startup costs: SaaS companies do not require expensive hardware or infrastructure investments to provide their software.
Scalability: SaaS companies can quickly respond to growing user numbers and adjust their infrastructure to ensure high availability and performance.
Recurring income: Through the subscription model, SaaS companies generate regular income, providing a solid financial foundation for the company.
However, there are also some disadvantages to starting a SaaS company, for example:
Strong competition: The market for SaaS solutions is very competitive, which can make it difficult to stand out from other providers.
Dependence on infrastructure: SaaS companies are heavily dependent on the quality and reliability of the infrastructure on which their software runs.
Maintenance intensive: Since requirements, operating systems and linked software change, SaaS solutions need to receive continuous updates and thus are maintenance intensive.
Data security: Since SaaS solutions are hosted in the cloud, SaaS companies must ensure that their customers' data is secure and protected.
Standard Software
Standard software refers to software products that are developed for a wide target group and can be installed by customers on their own systems. Standard software can be offered as a one-time purchase or a subscription. The benefits of starting a standard software company are:
Higher profit margins: Since standard software can be developed once and sold to many users, standard software companies can achieve higher profit margins than companies that offer custom software solutions.
Less dependence on infrastructure: Unlike SaaS solutions, standard software solutions are not as heavily dependent on the quality and reliability of the infrastructure on which they are installed.
Broad market: Standard software solutions can be developed for a variety of applications and industries, expanding the market for potential customers.
However, there are also some disadvantages to starting a standard software company, such as:
Higher development and testing costs: Standard software products have to be developed and tested for a broad target group, which can lead to higher development and testing costs than custom software solutions.
Limited customizability: Since standard software is developed for a broad target audience, it can be difficult to meet the specific requirements of individual customers.
Rapid technological change: The market for standard software solutions is often characterised by rapid technological developments, which can make it difficult to keep up with new trends and developments.
Custom Software Solutions
Custom software solutions refer to software products that are specifically developed for individual customers or a specific application. The benefits of starting a company that offers custom software solutions are:
High customizability: Custom software solutions can be tailor-made to meet the needs and requirements of individual customers.
Niche market: Since custom software solutions are specifically developed for individual users or a specific application, there is often less competition in this market segment.
Long-term customer relationships: The development of custom software solutions requires close collaboration with the customers, promoting long-term customer relationships.
However, there are also some disadvantages to starting a company that offers custom software solutions, for example:
Higher development costs: Developing custom software solutions often requires a considerable investment in time and resources.
Slower growth: Since custom software solutions are specifically tailored to individual customers, the growth potential of the company may be limited.
Lower scalability: Custom software solutions can be difficult to scale, as all users need to be individually supported.
Overall, the choice of software area in which to start a company depends on many factors such as the target group, financing and the personal strengths and preferences of the founder.
9 tools that can help with founding
If you are still looking for software to support you in implementing your idea, we have compiled tools from the categories Online sales platforms, CRM and Marketing planning:
E-Commerce Platforms & Shop Systems:
Consumer Relationship Management (CRM):
Marketing Ressource Management:
Conclusion: Starting a software company
In summary, starting a software company is a promising way to be active in the IT industry and to build a successful company. However, a successful foundation requires careful planning and execution. Here are the most important points to consider:
A solid business idea that is oriented towards the needs of the market and is based on realistic assumptions and experiences.
An extensive market analysis to determine the target audience, competition and growth potentials.
Choosing an appropriate legal form that meets the needs of the company and considers both legal and tax aspects.
A solid financial plan to finance the company and be economically successful.
A wise decision about the software area the company will operate in, based on factors like target audience, competition and personal strengths.
Regardless of whether you offer a SaaS company, standard software or custom software solutions, a deep understanding of the market, technical know-how and a dedicated team are of great importance for the success of your software company.
Nils ist SEO-Texter bei OMR Reviews und darüber hinaus ein echter Content-Suchti. Egal, ob Grafik, Foto, Video oder Audio – wenn es um digitale Medien geht, ist Nils immer ganz vorne mit dabei. Vor seinem Wechsel zu OMR war er fast 5 Jahre lang als Content-Manager und -Creator in einem Immobilienunternehmen tätig und hat zudem eine klassische Ausbildung als Werbetexter.
