8 things I learnt from starting, running, and selling a software agency

Hey guys,

I am a software developer that started (or rather stumbled into starting) a software development agency.

Financially, it went a lot better than I originally expected. We hit 6 figures in year 1, high 6 figures in year 2, and 7 figures in year 3. We were super happy with this result, and it kept getting better.

Last year after 8 years, I sold my business to a larger agency.

It’s something I had thought about doing for a while. I wanted the opportunity to pursue other interests, and have a long break to plan the next chapter of my life. After travelling in an RV with my wife for the last 8 months, I have certainly had that break!

Anyways, long story short - I ran my business for 8 years, and 8 months ago I sold it.

So I thought it would be poetic to capture the top 8 important lessons I learnt from running a software development agency.

1. It’s tough to do it by yourself.
In fact, I don’t think I would have done it. I started my agency with a good friend from university, and later when he moved onto a different venture, my wife joined. Having a partner to “divide and conquer” was great, and the emotional support was integral for me.

2. Have a niche.
Don’t try and do everything, otherwise you’re competing with everyone. We originally focused on building MVPs or startups, and whilst this was fun the money wasn’t great. Custom software for internal business use was our second focus, and that was very successful. We found the niche, started getting great projects, and then hit 7 figures pretty fast.

3. Your staff are a superpower.
We were a small, lean team, and I couldn’t have done it without them. I worked hard on building a good culture and giving them more responsibility as they grew.

4. Pay great.
Software devs are expensive, and small businesses and startups can’t always afford to compete on price. But as soon as we were making proper money, we paid our staff well and paid them back for the loyalty they showed in the early years.

5. Client relationships are your main focus.
To remain small and lean, we focused on a small group of well paying clients, over many low paying clients. So when we found a good fit, we worked hard to truly get to know them and their business goals. Develop mutual trust, and become their long-term technology partner.

6. Become an expert.
Act as a consultancy and not just a “dev shop”. Be technically excellent, but also go above and beyond in all phases of the project lifecycle. It’s surprising how many agencies aren’t that great or aren’t consistent. Be consistently great and you can charge accordingly.

7. Agency life can be endless.
There’s always another project, and things move fast. If you don’t design the environment you want, chaos will design it for you. Have clear standards, and protect yours and your staff’s time to cultivate a relaxed environment.

8. Build to sell.
Even if you don’t think you will ever want to sell, create processes, document processes, build pipelines, and don’t allow yourself to be the bottleneck. Empower your team, and learn to delegate efficiently.

I probably have about 16,000 other lessons, but these are my top eight!

I have started a newsletter and blog helping developers start and run their own dev agencies, not spammy at all, totally free, just a cathartic process for me to brain-dump everything I have learnt on my journey.

Any questions? I’m more than happy to answer anything and provide help where I can!

Cheers,

Chris