Biggest Software Development Mistakes Small Businesses Make

It’s no secret that small businesses are fragile creatures.

Luckily, the old statistic that 10% of small businesses survive past the first year is an urban myth. However, the real numbers are still intimidating. According to U.S. Bureau of Labor Statistics data, about 20% of small businesses fail in the first year, and half close within five years. Only 35% survive to celebrate their 10th birthday.

Many factors are involved in the failure rate, and software development errors aren’t in the top 10. However, these errors are among the most avoidable. Whether your business uses new software or your own proprietary software, here are some of the biggest mistakes you should avoid.

4 Software Development Mistakes You Can Easily Avoid

Software Development and the Role It Plays in Your Business

1. Choosing the Wrong Technology

It’s important to have working technology for your startup, including but not limited to newer computers that run fast and reliably, a solid development environment, an intranet/Ethernet infrastructure, and the right programming decisions for the task at hand.

The good news is a strong development team can work with the technology you choose. But you could choose a technology program that presents a host of problems.

Choices to avoid when choosing technology include:

  • Buying cheaper technology with the intent to scale up later can cause short-term problems and add a major expense during later phases of your company.
  • Buying brand-new technology often means spending more money than you have for products that still have a few bugs in them.
  • The newest technology options have a smaller potential pool of experts who know how to use them.
  • Inappropriate technology choices waste time, which means higher payroll costs and lost opportunities that can put your release behind schedule.

The best technology won’t mean seamless and perfect operations. But it will eliminate a host of financial and logistic issues that could combine with other factors to sink your entrepreneurial venture.

How to Avoid This Mistake

Accept that you might not be the best person to choose which technology to purchase. If your team has the knowledge base to make the decision — and isn’t biased toward one brand or another — ask for their input. If you don’t have a large enough team, remember that IT consulting firms offer reasonably priced packages for this exact purpose.

2. Hiring the Wrong Developer

The hard truth is software developers and engineers are never good at everything. They’re good at particular tasks and programming languages. It’s essential to hire someone skilled at the types of technology you need built. For instance, if you want to build a website using Google’s back office, but you hire a developer who doesn’t like Google’s technology for websites, then you may be disappointed. Hiring a team that doesn’t have the expertise you’re seeking is an all-too-common problem for startups.

It doesn’t matter how ninja-smooth your top choice is. If they’re not skilled with the tools and tasks you need, they’re not the best candidate for the job. Similarly, a developer who’s super-specialized in exactly what you need, but is unreliable or even dishonest, is an equally powerful recipe for disaster. Many small business owners hire green teams with limited knowledge because the price tag is lower, promising themselves they’ll bring on more seasoned staff as profits begin to rise.

All of this applies both to hiring in-house employees, freelance contractors, or development service firms. You have to make sure the skillset, knowledge base, and culture are a good match for your business.

How to Avoid This Mistake

Hire someone who is highly familiar with your product and the tools you’ll be using. This can be challenging, but using a headhunter recruiting service is a great place to start. With that one knowledgeable “linchpin” employee in place, you can build out the rest of your team.

3. Not Utilizing Existing Tools

Yes, as a business, it’s your job to create new ideas and offer them to the public. But that doesn’t mean you have to reinvent the wheel with every aspect of the software you’re developing.

While building your own technology tools is tempting and might seem cost-effective and exciting, remember it can be challenging. The process of creating new technology often runs too long and puts you behind schedule. And each day you operate without a product, you have losses on your balance sheet.

How to Avoid This Mistake

Know what tools exist to help you get the job done, how much they cost, and what the real costs of doing it yourself instead will be. Remember that professional loggers don’t go without chainsaws or try to build one from scratch. They go to a hardware store and buy the best existing tool they can afford.

Consider spending a little extra money in the short-term for the best technology that’s available now. Then, once your team learns how to use the software, you’ll be up and running and selling your product quickly.

If you’re producing software, your options are more limited, but they still exist. Multiple video games use existing third-party physics engines so their team can focus on the graphics, story, and gameplay that make their product unique. Tools like that exist for most software genres.

4. Scaling Prematurely

The worst thing that can happen to any small business is getting too many customers before you’re ready for them. This gets you negative reviews, and by the time your business is ready, it’s already gained a bad reputation.

The second-worst thing that can happen to any small business is incurring the expenses of preparing for a lot of new customers who never arrive. Growing your business too fast can be just as hazardous as not growing it fast enough.

Scaling up for software development is especially problematic because of the costs involved. Programmers are expensive, and if you spend their labor hours on new features or infrastructure before you know the market needs, the combined costs can be fatal to a fledgling business. This kind of scope creep is incredibly common, especially among the passionate and optimistic personalities who often start small businesses.

Also, be wary of infrastructure scaling — paying for bandwidth and functionality for 2,000customers when only 50 or 100 are likely to show up. These costs, without the funding to recoup them, are just as wasteful and potentially dangerous.

How to Avoid This Mistake

Conduct exceptional market research. Understand the key factors of who will buy your software, why, and for how much. Run data-driven projections to learn when the rushes will arrive and at what time you can best offer expanded options. Use key performance indicators to track the vital statistics of your software, with metrics to tell you when to expand. Emotional or hunch-based decisions here are as likely to sink you as to make you shine.

Final Thoughts

If you’re reading this article at the very beginning of your product cycle, that’s good news. You can build your business from the start to avoid these startup-killing mistakes. If not, that’s OK too. Just steer the ship of your company away from these errors as quickly as possible.

Michael Bohm grew up in a small town in the Midwest and lives in Michigan with his family of four, where he provides guidance and marketing advice to new businesses.