Start a Software Company

Want to leap into entrepreneurship? Give a boost to your entrepreneurial ambitions! Start a software business & be a part of this flourishing industry.

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Registering a Company is quick, easy, and can be done online with Vakilsearch in 3 simple steps:


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Start a business in Software Company

Want to start a software company? Great decision indeed! The software and information technology (IT) industry has been a chief contributor to the progressive economic performance of India in the recent past. Top global companies in this field are also looking to invest in India as quality manpower is available to them at relatively lower expenses. Of late, many Indian startups have also made their presence felt in this sector.

However, before starting your own software company, you need to follow certain procedures dictated by the enterprise regulations of the country. We will tell you everything about how to start your own software company from scratch.

But, before going through this, let’s first understand the types of software companies prevailing in India.

Types of software companies in India

Before starting your own software company, it’s important to choose the right type of Software Company. Broadly speaking, Indian software companies can be categorized into 2 types. Namely,

  • Consulting or service-based company
  • Product-based or development-based company

Consulting or service-based company

These types of software companies are known to provide consultancy and other services related to information technology, business consulting, software engineering, and other outsourced services to their clients. Some prominent Indian software companies in this category are – Wipro, TCS, IBM, Accenture, Infosys, Tech Mahindra, etc.

The types of services provided by these companies include (but not limited to)-

  • Database migration services
  • Custom business solutions
  • Application development
  • Customization services
  • ERP solutions
  • Outsourcing
  • Programming services
  • Collaborative commerce
  • Quality assurance
  • Programming services
  • Multimedia services

Product-based or development-based company

These types of software companies are known to provide products or groups of products that contribute to a major part of the revenues of an organization. Major companies in this category that exist in India include- Tally, Zoho, Amazon, Google, Microsoft, CISCO, and so on.

Points to consider before starting your own software company

Before starting your own software business, you would do well to consider the below-mentioned points-

  • Decide on the type of services/products to offer
  • Target a niche market where it is not so fierce
  • Have an assessment of the feasibility and profitability
  • Decide on the most effective distribution channels available
  • Your business should provide new and better solutions at lower prices to the customers, than the competition.

Benefits of starting a business in the IT industry:

You are your own boss

You don’t have too much about a corporate 9-5 anymore, and slave under someone else. Starting a software company in India ensures that you remain your own boss, which is a huge incentive to work harder.

Flexible timings

We have all had to stay back till insane hours at our office, and found that we don’t have a lot of time for our family. However, by starting your own IT company, you ensure that you have flexible timing. While it might take a lot of effort and time to set the company up, once it starts running profitably, you will have more time on your hands.

It’s your office, your income. You will be the decision-maker

It isn’t always nice to work very hard, knowing that the fruit of your efforts go into someone else’s pocket. Well, if you start your own software company in India, you never have to worry about that anymore. Since it is your company, you get to decide where the profits go. You can choose to reinvest in the company, or even take the money home, depending on what your requirements are at the moment.

Work-Life balance

Achieving the right work-life balance is very difficult in the 21st century. However, when you become your own boss, it becomes a lot easier to do so. You will finally get to set your priorities and find time for your family and loved one if you start a business in the IT industry.

Feel free to choose your employees/authorities

One of the biggest advantages of starting your own software business is that you get to set company policies. Therefore, you will have total control over who you hire, who you work with and how your office or workspace will be.

Rewards are yours and risks are yours

When you become your own boss, you have total control over your fate and destiny. Therefore, all the rewards, risks and issues with your business remain your own, giving you more incentive to work hard.

Growing Community

The software industry is booming in India, and by starting your own IT firm, you get to be a part of that growth and provide employment opportunities to many people around you. This is a very satisfying part of running your own business.

How To Start a Software Company

For those wondering how to start an IT company, it begins by taking a leap into entrepreneurship. With the technical know-how, required to plan on how to start an IT company, and the willingness to work hard. You can follow it up with the steps mentioned below, which will help you with how to start an IT company in India.

  • Create A Website: As an important step of how to start an IT company, it is expected of you to have a website to reach your potential customers and to list the services you provide. Also by installing a chatbot or an instant chat tool, you can easily connect with your website visitors, and help them provide immediate information, and facilitate sales quicker. You can either hire a web designer or web developer, or rely on third-party companies such as Squarespace and Wix to create your website, and complete the first step in your, how to start an IT company in India, journey.
  • The Structure Of Your Business: The next step to consider when learning how to start an IT business is to figure out the legal structure of your business. This refers to One Person Company, Sole Proprietorship, LLC, etc, This will have an impact on your business operations, taxes, and business perpetuity. It is best to consult with legal professionals or business consultants before deciding which structure to adopt. Last but not least, refer to your own business goals and see if the structure you want to adopt compliments it.
  • Registering Your Business: The next part of your how to start an IT company in India journey involves registering your business entity, based on the legal structure that you have chosen. The formalities may differ based on the state you are located in. While registering your business you are required to register it under a name, which can serve as your brand name as well. However, if you wish to keep your brand name and your registered name separate, you can opt to register your business under a DBA (Doing Business As).
  • The Ideal Location: Location should also matter when it comes to deciding how to start an IT business. Establishing yourself in a location where your customers can reach you directly or at least see that you are located conveniently or prominently. Of course, some locations are competitive and expensive. Hence, a cost-profit analysis also helps when it comes to making your final decisions. Location can also help you with forming several IT business ideas, in case you have plans to expand your operations.
  • Bank Account: With respect to opening any business, opening a current bank account is also essential. A current account allows your business earnings and personal earnings separate. Banks offer several services to businesses as part of their new offerings which makes it convenient for them to manage their finances and facilitate payments. Banks also provide their in-house consultants to assist you with selecting the banking services you require.
  • Build a business identity: Your brand defines the identity of your business and will continue to do so in perpetuity of your IT business. Hence, it is important to establish an identity that goes well with the theme and overall style of your business. The brand also helps in differentiating your business from your competitors, and essentially forming an intangible asset of your business.
  • Business Software: How to start an IT business without setting up adequate business software. As a business owner, there are several tasks and responsibilities to be executed. With a fully functional CRM software, that allows you to track your sales, automate marketing activities, execute HR activities, collect accounting and finance information, manage projects, etc. A reliable business software optimizes business processes and operations and makes it easy for you to manage your IT business more efficiently.
  • Marketing: To get the word out there and to attract your target market, advertising should form a critical part of your marketing strategy. This also helps prospective customers find more information about your IT business. Some of the popular mediums through which you can advertise are social media, third-party reviewers, print ads, digital loyalty programs, email marketing and other types of promotion.
  • IT Business Insurance: To protect you and your business, it is important to invest in insurance. Some people may share the opinion that it is an unnecessary expense. However, in the event of any unforeseen circumstances, insurance will provide coverage over potential losses and third-party liabilities. It doesn’t matter if you’re running a home-based business or an office-based business when it comes to how to start an IT company, insurance will help in covering business activities, equipment, and potential lawsuits, in the event someone is injured on your property or premises. Other types of business insurances include commercial property insurance, professional liability insurance also known as technology errors and omissions insurance (specific to IT industry). Each of these insurances cover specific types of coverages, such as losses related to equipment or property, general liability, and others that cover customer lawsuits.
  • Network: When it comes to how to start an IT business in India by finding new clients, networking forms a crucial part of the entire process. In order to ensure the long term success of your business, it is important to expand your business network with influential personalities who can bring in more customers to your business and enhance its visibility and popularity.

How a software company works: Perfect Software Company Business Plan

A Business plan for a Software Company must contain the following;

  • Objectives:This can include promoting software to MNCs, expand good software created by the company, work with reputed companies and improve their existing IT infrastructure and create a brand name for the company within a stipulated time frame.
  • Mission and Vision: This talks about where the company is now, what it aims to do, and where it sees itself down the line.
  • Keys to Success: Talks about what areas you need to focus on to achieve success.
  • Product: This section will talk about the technical specifications and other details of the product. It can include the stages of product development, what problem the product solves, why it is important and how it can help people.
  • Company Brief The brief basically carries information regarding what the company stands for, the evolution the company has gone through and where it wants to end up years from now.
  • Pricing and Monetisations: The financial side of the business plan should elaborate on how the product will be priced, what the customer acquisition costs are, what profit margins can be attained and how the company plans to make money.
  • Staffing and Services: Highlight how you plan on recruiting, staffing, training and developing your workforce. It should also contain information regarding what services you will provide.
  • Marketing: Put forth a complete marketing strategy, including details on how you aim to build a brand, attract new customers and sell your product.

Step by step procedure on how to start a Software company in India

  • Draft a comprehensive business plan that serves as the guideline for your business and its growth. Make sure the business plan contains all the relevant information, including technical descriptions, the market you want to be a part of and what plans you have for the future.
  • By looking at the market and the type of product you want to create, choose a structure for your business organisation. You can opt between Partnership Firm, LLP and Private Limited Company for your business structure.
  • Once you are done incorporating your business, decide on what region you want to work in, whether you want to be a national company or want to go global.
  • Register your company with the ROC after choosing an appropriate name for your company. At this stage, you will also have to draft an Article of Association and Memorandum of Association. Next, fill out all the compliance declarations required, provide the address proof of your registered office, and send all these documents to the ROC.
  • You need to choose a registered office address for your company depending on the size of your workforce. You will also need to populate, refurbish and decorate this building as per your company’s requirements.
  • Next comes staffing and training. You will need to find highly skilled coders and programmers to help run the business. You will need a couple of software engineers, a few programming professionals, an HR or operations manager and someone to handle all your accounting and bookkeeping.
  • Next, you will need to register as an employer with the concerned State Employment Department, as per your State’s legal requirements. Doing so will enable you to post job ads and hire competent individuals through their online portal. We will help you register your business easily.
  • Finally, you can opt to register with Software Technology Parks India to receive benefits and tax breaks from the government.

Different Types Of Information Technology Roles

There are several different information technology roles that have gained popularity over the years, as the IT industry has grown. Some of these information technology roles are;

  • Cloud Computing Engineers
  • Computer Network Specialists
  • Computer Support Specialist
  • Database Administrator
  • Information Technology Analysts
  • Information Technology Leadership
  • Information Security Specialist
  • Software/Application Developer
  • Web Developer

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