Are you about starting a software development company? If YES, here is a complete sample software development business plan template & feasibility report you can use for FREE.
A software development company is where software is not only developed but distributed for different purposes such as instructional, learning, calculation, entertainment, and assessment purposes. Before one can start a software company, there are basic things that one needs such as a knowledge of programming, technical support skills, the necessary experience at managing a company and funds.
However, before starting a software development business, it would be best to conduct a thorough market research of the industry
A Sample Software Development Business Plan Template
Table of Content
- 1 Industry Overview
- 2 Software Development Business Plan – Executive Summary
- 3 Our Products and Services
- 4 Our Mission and Vision Statement
- 5 Job Roles and Responsibilities
- 6 SWOT Analysis
- 7 MARKET ANALYSIS
- 8 Our Target Market
- 9 SALES AND MARKETING STRATEGY
- 10 Sales Forecast
- 11 Publicity and Advertising Strategy
- 12 Startup Expenditure (Budget)
- 13 Sustainability and Expansion Strategy
The software development industry has grown in the space of a century from an almost on-existent industry to one that is not only a billion dollar industry but an indispensible one, especially as software form the basis of modern gadgets and devices.
Between 2011 and 2016, this industry has been dynamic in growth, especially as there has been increasing demand from businesses and consumers, with more people spending their discretionary income on products such as video games.
The industry is being said to generate $205 billion and has a projected annual income of 3% from 2011 to 2016. There are more than 8,500 software development businesses in the United States of America that employs more than 455,000 people.
Globally as at 2013, according to Gartner, the software revenue was $407.3 billion which was a 4.8% increase from the #388.5 billion registered in 2012. The industry according to Forrester was projected to be the fastest growing in 2014 with a growth pegged at 7.1%.
The software development industry has room for growth as there is considerable demand in this industry with more businesses adopting software programs that will allow for improved efficiency and lower operating costs; this was so as to look for ways to not be affected by the economic downturn.
Cloud computing capabilities have created several advances for companies who have realized the positive effect of virtual offices and the savings implications for the company. This technology has helped companies to not only reduce overhead but increase productivity as well.
Another plus for companies are virtualizations which not only allow them to eliminate several server farms but has made IT infrastructure more economical and flexible while slashing operating costs.
There are moderate barriers for new businesses that wish to enter this industry; however, certain product segments have a higher barrier than others. One common thing in this industry is patents which serve as a means of limiting competition, even though some companies willingly license their patented technology.
Software Development Business Plan – Executive Summary
Doodle Tech Inc. is a leading software development business that is based in Market Street, Suite 800, San Francisco – California, USA. We are in business to develop software for general purposes and for specific purposes to our various clients. We have in place training services and we also offer technical support in line with our business.
Our location is very strategic in the sense that we are close to manufacturing firms as well as technology giants and other big businesses here in California that will ensure that we have an edge over other software companies in other parts of California.
We are in business to not only make profit but to also compete favorably against other software development companies in the industry and attain our vision of being the preferred software development company for clients all over the United States of America.
We intend to ensure that we demonstrate fair business ethics in every point of our business. We hold ourselves accountable for our high standards and ensure that all our employees are not only attuned to but display this standards at all times in order to positively promote the company.
As a result of this, we are willing to go the extra mile by putting in structures, processes and planes in place to ensure that we get the best professionals who not only have the expertise but are also competent and know how to take our company from where we are to where we intend to be.
Our employees have welfare packages that are currently amongst the best in the whole industry amongst similar start-ups such as ours. We have also provided a conducive environment for all our employees in order to ensure that they remain productive at all times in order to improve the bottom line of the company.
We offer excellent customer services that have been known to retain a high number of our clients. All our customer service executives have been trained to know how to respond to customers and are also updated as regards the industry trends in order to ensure that reliable information is passed to our clients.
Finally, the expertise of both our owners, Jack Taylor and Christopher Warden in software development and business management is a great plus as both are not only Harvard graduates but also have more than 30 years of combined experience that will ensure that Doodle Tech Inc. attains its goals and objectives in time.
Our Products and Services
Doodle Tech Inc. intends to deal in several services whilst also generating revenue that would boost our bottom line tremendously. These several services will be added to our core service and should keep us favorably disposed to compete against our competitors.
We however intend to ensure that all our multiple sources of income which include training and technical support are in line with what is obtainable in the industry and accordingly to the laws of the United States of America. Therefore some of the services and products we will engage in are;
- Developing of software according to clients’ specifications
- Sale of software
- Offering of subscriptions for our software
- Charging of license fees for our software
- Charging by transaction
- Advertisements on our software
- Training services
- Technical support
Our Mission and Vision Statement
- Our vision at Doodle Tech Inc. is to be distinct from other software development companies by creating software that suits the diverse needs of our end users, and to be the preferred software firm for users in the United States of America.
- In order to achieve our vision, we have on hand the best software developers that will ensure that we attain our goal of being the preferred software company and in meeting all the diverse software needs of our customers here in the United States of America.
Our Business Structure
We know how important it is to have the right business structure for our software development company as getting it right from the start will eliminate most hitches that will crop up relating to our structure during the course of running the business. For this purpose, we intend to hire only competent and professionals in the available positions in our company.
Due also to the fact that we intend to run a wide range of services, we intend to ensure that we employ those that are capable of filling in these different positions. All our employees are those who understand the industry well and who are attuned with our vision and are committed to ensuring that we attain these goals and objectives.
We are also prepared to ensure that our workers are well paid and have welfare packages that are the best in similar categories across start-ups such as ours in the industry. We will also ensure that the working environment is not only conducive but is one that will enhance their skills and make them more productive.
Below is the intended business structure for Doodle Tech Inc.;
- Chief Executive Officer
- Software Development Manager
- Business Development Manager
- Human Resources and Admin Manager
- Customer Service Executives
- Marketing Executives
- Security Guard
Job Roles and Responsibilities
Chief Executive Officer
- Develop overall policies that would provide the right direction for the company
- Ensures that strategies are implemented and weak strategies are removed
- Meets and negotiate with high powered clients on behalf of the company
Software Development Manager
- Ensures that new software is developed and tested for bugs before being released to the public
- Develops new software for existing software so that clients can upgrade without running into hitches
- Carries out constant tests on software released to find out weak points and work on it.
Business Development Manager
- Researches on new businesses that will generate more revenue for the company
- Reviews company’s current products and services and decides how to make them better
- Works with the software development manager to give feedback on what the market trends are
- Prepares the budget on behalf of the firm and liaises with the owners to ensure that budget is reviewed and correctly implemented
- Prepares all the financial information and statement on behalf of the firm
- Ensures that tax is prepared and filed correctly to the correct authorities
- Ensures that the company’s books balances with that of the bank at the end of every month and accounting period
Human Resources and Admin Manager
- Ensures that the right employees are recruited on behalf of the company
- Carries out orientation and ensures that employees are assigned the right tasks for their responsibilities
- Ensures that all the administrative functions of the company are performed smoothly without any hitches
Customer Service Executives
- Ensures that all customers enquiries as well as complaints are well attended to and promptly resolved
- Keeps an accurate customer database on behalf of the company and ensures that it is regularly updated
- Carries out other duties as determined by the human resources and admin manager
- Conducts a marketing research on the software development industry to identify new markets for Doodle Tech Inc.
- Drafts strategies and reviews weak strategies to ensure that ineffective ones are removed
- Conducts direct marketing on behalf of the firm
- Meets and negotiates with high level clients on behalf of the firm
- Ensures that the premises and all the properties are secured after work hours by conducting patrols
- Monitors the surveillance cameras in line with securing people and property of Doodle Tech Inc.
- Keeps updated about the security information in the locality and pass along important security tips to staff
- Ensures that the premises is kept clean before work resumes
- Keeps the staff and guest conveniences clean at all times
- Ensures that cleaning supplies are always in stock
- Carries out any other duties as directed by the admin manager
In order to determine if we were engaging in the right concept for our business, we hired the services of brand consultants who were not only reputable but the best here in San Francisco – California to let us know if it was worthwhile going into the business now.
The business consultants took a deep look at our strengths, weaknesses, opportunities and threats to allow the know what we were likely to face starting and running our business here in San Francisco – California, and in the United States of America as a whole. The results of the SWOT analysis that was conducted on our behalf are as follows;
Our strengths are numerous and lie in the fact that we have the right business structure that will ensure that we conquer this industry. Our software developers are the best there is and have the expertise and experience to enable us attain our goals and objectives.
We are also involved in ensuring that our software pass through quality process, reason we have external testers who run several tests on any of our software before it is released. Finally, our owners have the necessary experience that would make our being at the top a piece of cake, as both have more than 30 years experience in the software industry both as developers and in managerial positions.
There are few weaknesses that we identified for Doodle Tech Inc. and they include the fact that we were going to develop software that were not really different from what our competitors were offering. Also, there is the other fact that we are located in an area where there are other software companies, making our location a bit saturated.
We are however confident that we would be able to battle whatever weaknesses might crop up during the course of running or starting the business.
There are so many opportunities available to us as there are new market segments that we have identified which would likely generate money for us. There are so many strategic alliances which we would engage in so as to have a foot into other target markets and generate more revenue for our bottom line.
We also have the opportunity of moving into the international market as our software is such that has no boundary limits. Finally, we would fully tap into the internet in order to promote and increase awareness for our brand.
Threats are external factors that cannot be controlled by a business; however any serious business should not only be prepared for threats but also have ways by which these threats will not be allowed to totally affect the business.
Some of the threats we would likely face at Doodle Tech Inc. are; the arrival of a new competitor into our location, engaging in price wars with competitors, dealing with government policies that might have an effect on our industry. We are fully prepared for any threats we are likely to face, as we have strategies on ground to battle such threats.
- Market Trends
The trend in the software industry is that most software firms or companies are located in clusters in identifiable locations. This is due to certain facts such as these companies wanting to be close for competitive and industry purposes and also most software companies depend on one another to be able to carry out certain functions or complete certain specific tasks for clients.
This does not however mean that there aren’t software companies in other locations or that software companies in these other locations cant still get jobs done. To however remain relevant, software companies must always remain innovative and unique in their offerings and services. Another trend with software companies is in its publicity and promotion activities.
To be able to attract the much needed awareness and also attract clients that would pay money for the firms’ products, software companies have engaged in strong promotional activities either by hiring brand consultants or getting an in-house team or deploying both methods to draft the strategies that would enable it be recognized in the industry. Intense promotional activities will also help in getting a huge share of the market.
Lastly, software cannot work without any device and so goes hand in hand with new or existing technology; which is why most software companies try to partner with technology firms so as to create new software or upgrade existing software for these firms. This goes to show that software industry is dependent on the technology and manufacturing industry in order to survive or thrive.
Our Target Market
Almost everyone makes use of software and have either bought directly from the developers or indirectly via owning a device. This means that the target market for any software development company is wide. We however have mapped out a strategy that would allow us gain a vital share of the target market.
One of our first strategies is in conducting a thorough market research that would enable us understand the market we are to go into and know what they expect from us and what our obligations are towards them. The result of the market research of the market research showed that we were in business to develop software or offer other kinds of related services to the following people;
- Corporate organizations
- Entertainment industry
- Educational institutions
- IT firms
- Accounting firms
- Financial institutions
- Small businesses
- Agricultural sector
- Military and defense sector
- Other software companies
Our Competitive Advantage
Just like any other business that is established to make profit, we hope to be able to compete favorably against our competitors in the same industry. Our vision is to be the preferred software development company for our clients all over the United States of America and to achieve this, we intend to come up with competitive strategies that would enable us attain our goals and objectives.
We intend to ensure that the software developed for general purposes will come in different categories that will be convenient for all our users.
We have assembled a high team of software developers as well as management team who are not only highly experienced and who understand how to handle a start-up and make it become a force to be reckoned with nationally. Our staffs are also attuned to our core values and principles and understand the importance of projecting the image of the company positively to our customers – potential and existing.
Another competitive advantage that we have to our favor is our excellent customer service culture which is already resounding across the industry as one of the best of start-ups of our size. Our customer executives are highly trained and are always updated on industry trends so as to be able to give our customers the correct information at all times.
Finally, because we know how important it is for our employees to be happy always, we are committed to treating them right. Our management team has a stake in the company’s profits and our lower cadre employees have incentives built into their welfare packages. All this is to enable our employees remain happy and productive.
SALES AND MARKETING STRATEGY
- Sources of Income
Doodle Tech Inc. just like any other business has been established with the aim of generating revenue and making profit in the technology and software industry, and we are going to ensure that we make software that will help us accomplish this purpose, as well as engage in other services as well.
Doodle Tech Inc. therefore intends to generate income by engaging in the following services;
- Developing of software according to clients’ specifications
- Sale of software
- Offering of subscriptions for our software
- Charging of license fees for our software
- Charging by transaction
- Advertisements on our software
- Training services
- Technical support
The software industry has come to stay and can only keep evolving into something bigger and stronger, as there will always be gadgets, devices and templates that would require the use of a new software or an upgrade.
Our strategic location in San Francisco – California has afforded us the opportunity to be close to many technological giants and businesses and this will see us generating and meeting our set revenue in no time, thereby growing our business tremendously.
After conducting a thorough analysis on the software industry and analyzing our chances in the industry, we were able to come up with a sales forecast that has shown strong positives in how we are likely to far in the market.
The sales projections were based on several assumptions and facts garnered across similar start-ups in the industry and across the United States of America as a whole. Therefore, the sales projection that Doodle Tech Inc. conducted to analyze its chances are as follows;
- First Fiscal Year-: $400,000
- Second Fiscal Year-: $800,000
- Third Fiscal Year-: $1,600,000
N.B: The above sales projections were done based on major assumptions that some factors that were used in making these assumptions would remain the same. However, should there be any change either positively or negatively, it would likely increase or decrease the above figures.
- Marketing Strategy and Sales Strategy
Marketing is a very important aspect of any business because it is not only a way to generate revenue for a business; it is also a way of garnering publicity to attract new customers whilst retaining the old ones. Every business no matter its level or life cycle of needs marketing in order to thrive, which is why any entrepreneur or business person starting or running a business usually sets money aside for marketing.
Asides creating funds for marketing, it is also important to ensure that effective strategies are created. Creating effective marketing strategies are essential as they would ensure that the funds are channeled the right way. In marketing Doodle Tech Inc., we would ensure that we leverage on all conventional and unconventional means of making sure that our brand and products are marketed to all our existing and potential customers.
We would conduct a market survey that would allow us understand the right strategies to draft and how effective they would be depending on the target market. To conduct a thorough market survey, we would make use of accurate available data so that we would be effectively able to compete with all our competitors all over the United States of America.
We also intend to hire a reputable marketing consultant who should be able to draft the right marketing strategies that would allow Doodle Tech Inc. penetrate the market. Also, our marketing team would be empowered in ensuring that the marketing strategies created are in tune with our corporate goals and objectives as a business.
Therefore, the following are the marketing strategies we hope to adopt at Doodle Tech Inc. in order to sell our products and services;
- Ensure that we introduce our software development business by sending out introductory letters to technology and manufacturing companies as well as other big software companies and other stakeholders in the industry.
- Network with other software companies by attending software developer conferences
- Advertise our software development business in local newspapers, technology related magazines, and in local radio and television stations
- Ensure that Doodle Tech Inc. is listed in online and offline directories
- Engage in direct marketing and sales
- Ensure that we are actively involved in forums and blogs in marketing our company
Publicity and Advertising Strategy
Carrying out the right publicity and advertisement for our software development business is very essential as it is not enough to just penetrate the market and also create awareness, but to ensure that the strategy will result in Doodle Tech Inc.’s products becoming generic terms for similar products in the same category.
Due to this vision, we have hired a reputable publicity consultant who has the industry knowledge and expertise and who will help in ensuring that our company gets to the top by drafting out strategies that are in line with the core policies of the company and will boost our brand and allow us compete favorably against our competitors.
Below are some of the platforms we intend to leverage on in order to promote Doodle Tech Inc.;
- Develop a free version of our software and give users an opportunity to upgrade at a cost
- Leverage on relevant social media platforms such as Facebook, Twitter, and LinkedIn. Google Hangout and other developers’ forum in order to create awareness about Doodle Tech Inc.
- Engage in pay per click advertisement on popular software development forums
- Create contests on social media and via our website to generate more publicity
- Distribute our handbills and fliers in strategic locations
- Install our flexi banners in conspicuous and strategic locations all over San Francisco
Our Pricing Strategy
Determining the right price for our various software’s will depend on a number of factors, such as how much the market will willingly pay for such software, how much that category of software is being charged for by competitors, and how unique the software is. Other factors that will determine the prices are if we intend to charge a licensing fee for our software, or enable a pay per transaction or a subscription that is time-limited for the end user.
In view of all the above based factors, we will offer our software at prices that are at the prevailing market conditions. However, because this is a competitive market, we will however lower our prices in the first two months of business so as to attract more customers to our business, and also increase the awareness for our products.
- Payment Options
Doodle Tech Inc. realizes that due to improving technology, customers now have different payment options that they can use in paying for services; and so we have different payment policy that is intended to suit all our different customers and their diverse needs.
The payment options we have for our clients are;
- Cash payment
- Payment via check
- Payment via online payment portal
- Payment via Point of Sale (POS) Machine
- Payment via credit card
The above payment platforms were carefully chosen for us by our bank and we have been told that our customers will not experience any hitches or inconvenience whilst using the above platforms.
Startup Expenditure (Budget)
Even though some of the equipment that can be used to start and run a software development company can be gotten for fairly used, thereby lowering the costs of start-up, it will however be vital to stress that setting up a standard software development company would require the equipment used to be standard so as to be able to withstand the heavy workload that it might have to carry out.
Also, the bulk of capital in these circumstances usually goes to paying workers and utility bills that the business will incur during the course of its operation. Therefore, the key areas where we intend to spend our start-up capital on are;
- Total fee for registering Doodle Tech Inc. in the United States of America – $750
- Licenses, permits as well as accounting software – $1250
- Insurance policy (general liability, workers’ compensation) – $2,000
- Leasing and renovating of a facility for use for at least a year – $20,000
- Cost of hiring a business consultant – $2,000
- Operational cost for the first 3 months (salaries of employees and payment of bills) – $200,000
- Other start-up expenses which includes (windows hosting, Linux hosting, bug tracking, graphics design, software subscription and cable broadband) – $15,000
- Marketing promotion expenses (general marketing expenses and promotion activities for grand opening ceremony) – $5,000
- Administrative expenses (stationeries, phone, computers, printers, furniture business cards, office supplies, and stamps) – $10,000
- Cost of purchasing an official vehicle – $30,000
- Cost of launching a website – $1,000
- Cost of throwing a grand opening party – $5,000
- Miscellaneous – $8,000
From the following report, we would need an estimate of $300,000 to be able to start and successfully set up a software development company in San Francisco – California. IT should be noted the bulk of the capital (90%) went towards payment of salaries for employees for a period of three months.
Generating Funding / Startup Capital for Doodle Tech Inc. Business
Doodle Tech Inc. is a business owned by two geeks and businessmen, Jack Taylor and Christopher Warden. We realize our financing is important for our company if we intend to successfully start, run and become a force to be reckoned with in the industry.
We are however going to be careful in where we source for money so as not to lose a part of our company or get locked in repaying a loan that might hinder the progress of our company. This is why we have decided to limit our sources for income to just 5 sources; The following are sources where we intend to get our start-up capital from;
- Generate part capital from our personal savings and sale of stocks
- Get soft loans from family members and friends
- Apply for research grants at the state and federal level
- Source for part capital from online crowdfunding sites like kick starter
- Apply for loan from commercial bank
N.B: from our personal savings and the sale of some of our stocks, we were able to generate the sum of $30,000. The soft loans from our family members and friends amounted to $20,000. We applied for a grant of $50,000 at the state level and have been considered.
We were able to generate the sum of $70,000 from sourcing for funds from kick starter, and we are at the final stages of getting our loan of $130,000 approved for us by the bank. All the necessary documents have been signed and we have been assured by our banker that the amount will soon be credited to our account within two weeks.
Sustainability and Expansion Strategy
Doodle Tech Inc. is established with the aim of making profit and competing amongst others here in the software industry. We are however concerned about the future of our company and so we intend to ensure that we deploy sustainability and expansion strategies so as to keep our business running for a long time.
One of the sustainability strategies which we intend to deploy is in having the right business structure on ground. This we intend to do by hiring competent and professional employees to handle the various tasks that we will assign to them.
We will employ those who understand what businesses such as ours will need to thrive in the industry and the know-how to ensure that we attain our desired goals and objectives. Our employees will not only be well paid and have attractive incentives, they will also continually be trained so that their skills would be enhanced thereby increasing productivity for the company.
We would draft effective publicity and promotional strategies that would ensure that the awareness for our brand and its products are increased to potential and even existing customers. Our promotional efforts will be geared into ensuring that our brand is positively communicated to even our rivals in the industry.
Most of our publicity strategies would be geared towards the millenials by throwing up contests especially on social media as these have the potential to ensure that awareness about our brand is effectively spread even to the baby boomers.
Finally, we take our customers very seriously and to this effect we intend to ensure that we have effective customer service programs which will see our loyal customers getting incentives.
We also would ensure that we attend to all customer enquiries whilst also making sure that all their complaints are resolved speedily depending on the problem. We know that if we carry out these strategies effectively, we would not only push forth our brand but also sustain our business whilst also expanding it at our own pace.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of trucks: Completed
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