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The 14 mistakes that will kill your independent development shop

Steven A. Lowe | Oct. 15, 2014
Deciding to go it alone as an independent software developer is a liberating experience. The thrill of being your own boss cannot be denied -- neither can the fact that being your own boss means building a business. It's no longer simply about the code. Everything is your responsibility, from paperwork to partnerships, and with this increasing burden come greater pitfalls that can sink your business.

Every software project has a "champion" (or "patron" if you prefer). This is the person with the authority to write the checks to pay for your work and the will to defend your project internally to ensure it succeeds. It is essential to identify this person and cultivate a meaningful relationship, where possible.

All too often the champion is not present, revealed, or even mentioned in consultative meetings. Worse, department heads or senior executives often insist they have the authority and budget to get the project done, when in fact that is not the case.

Always look at who signs the checks. In some companies, department managers have discretionary budgets and are indeed the champion of their projects. In other companies, executives higher up the chain — sometimes more than one — are the true, hidden champions; their approval is required for project expenditures.

It's not unusual, especially in smaller, privately held businesses, for the company president to be presented as the project champion, but in reality the CFO or company owner has to sign the checks. Don't be fooled into thinking you have a stronger commitment than you actually have.

Indie dev mistake No. 6: Failing to establish (and maintain) a sales pipeline

Selling custom software development is a slow, consultative process. Prospects may know they have a problem, but they may not be sure they really want to solve it. After all, the decision to adopt a custom solution can change the direction and foundation of an entire business; the bigger the business, the longer it takes to decide and turn. Even highly qualified, eager referrals from happy clients can take several months to close.

This means you must always add prospects to your sales pipeline. You must also always measure time spent and results. These numbers are crucial to keeping your pipeline flowing.

Suppose you need one client to support your business for half a year, and you can close one sale in six months for every 600 prospects you encounter. In this simplistic example, fewer than 100 prospects entering your pipeline every month could mean trouble.

In reality, the numbers are more complicated, but the structure of the pipeline remains the same: prospects in, time elapsed, sales out. Always be tracking time to qualify, time to close, average deal size, and close percentages. Use these numbers to project future income from the current pipeline. Subtract future costs and allow for projects (and income) ending. This will give you a leading indicator: If the resulting number is negative or trending downward, you are at risk of insufficient cash flow unless you add more clients to the pipeline.

Indie dev mistake No. 7: Failing to diversify your client base


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