Plenty of software companies are growing every day, as are the demands for their services. It’s no surprise if we take a look at the direction in which the world tends to move nowadays. However, those who have always dreamed of an IT company should remember one thing – starting a business isn’t a problem, the problem is in running a business.
Personal experience
I'm well aware of that because a few years ago, I started to take small projects when I was in the final year of engineering, although we had only four people aboard we successfully completed them. After completing my engineering I decided to start Tecture.
We were a small IT company, even then we had a few advantages over the larger ones. We had to face a lot problems and limitations which were difficult to overcome, thanks to these problems, we gained a lot of valuable experience. Because of this, I now know what it is to run a business in the hyper-competitive IT environment.
Benefits of small IT companies
First, let's talk about the bright side. What advantages do small businesses have? How can they compete against the bigger ones? From my point of view, I can highlight three benefits:
- They are agile and have an ability to rearrange rapidly if there is such a need.
- Built on robust passion, they take care better care of their customers when compared to bigger organizations.
- Small companies are frequently greatly specialized experts in one their specific fields.
Those days....…What a school of life it was. We were learning and delivering at the same time. Our actions led to mistakes, and eventually, mistakes were lessons for us. As someone once said, “you either win, or you learn”. I couldn’t agree more.
We struggled for two years before we made profit. We had competencies, but we also lacked customers and had a few other problems.
Personally, I felt good about selling projects, but a lack of project management skills sometimes caused problems in delivering on time My selling resulted in projects which were crossing the capabilities of our team, and personally, I lacked the skills of a good project manager that was required in the IT industry.
We eventually got a huge opportunity but it looked difficult since we didn’t complete the corporate procedures. We were ideal from the business and technical point of view but we were too small a company to take this up. We hit upon a ‘glass roof’.
We also faced problems with the continuity of small projects which resulted in cash flow problems and we were unable to recruit new people.
It’s always better to identify problems before they occur. We didn’t do that then, but later corrected our mistake. Luckily, because I am able to share them with you.
Problems of small IT companies
Main problems small companies may encounter on their way:
- They often have one client, thanks to the relations they built earlier, so they don’t have a well-established sales department and they lack the knowledge of selling their services.
- Usually they are led by programmers, who find it difficult to face the client and struggle to sell.
- They end up working for one kind of a client, making it difficult to acquire a different kind of a client.
- They lack the budget for Marketing and PR.
- Employees in small companies have limited opportunities to improve because they don’t have specialists around them to learn from.
- They often face cash flow problems hence find it difficult manage bigger projects
- There can be a loss in the profit when for a few months most of the employed programmers don’t have tasks to do.