Plenty of software companies is growing bigger and bigger, 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 about an IT company should remember one thing – starting a business isn’t a problem. The problem is in running a business.
I’m well aware of that because a few years ago I founded a company which specialised in front-end technologies under the name of LemonTea.pl. We have won few significant international awards like Awwwards Honorable Mention although we had only four people aboard. Eventually, we have decided to join SoftwareHut because we weren’t able to grow bigger.
We were a small IT company, and still, we had a few advantages over larger ones. We also had some problems and limitations which were difficult to overcome. And that’s why we have decided to join forces with SoftwareHut. I’ve gained valuable experience and thanks to it I can tell you about two sides of running 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:
- Small businesses are agile and have an ability to rearrange rapidly if there is such a need.
- Small companies take care of their customers even more than their bigger competitors. Small ones are built on robust passion!
- Small companies are built by high-quality specialists.
- Small companies are frequently greatly specialised experts in one specific field.
Those days…What a school of life it was. We were learning and doing 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 have been struggling for two years before we made a profit. We had competencies, but we also had a lack of customers and a few other problems.
Personally, I felt good about selling projects, but a lack of technical skills in project management sometimes caused problems with delivery delay or not providing things we have promised on time. My selling activities resulted in projects which were crossing the capabilities of our team, and personally, I didn’t have skills of a good project manager in the IT industry.
As LemonTea, we won a big contract, but there was no possibility to execute it because we haven’t fulfilled corporate procedures. Our client expected from us – a small company of several people – $2 Million insurance. From a business and technical standpoint, a customer wanted to work with us. Unfortunately, we were too small of a company to take that placing. We hit upon a “glass roof”.
We also had a problem with a continuity of small projects which resulted in problems with a cash flow and an inability to recruit new people.
It’s always better to identify problems before they occur. We haven’t done that then, but we did afterwards. Luckily, because I can now share them with you.
Problems of IT companies
Main problems small companies may encounter on their way:
- Small companies often have one client thanks to relations they’ve built before, they don’t have a well-established sales department, and they don’t know how to sell their services.
- Small companies are often being led by programmers, who have to work as salesmen and they struggle with that.
- Small companies typically work for one kind of client, e.g. digital agency or startup, and they don’t know how to acquire a different kind of a client, e.g. corporate client.
- Small companies don’t have money for marketing and PR.
- Employees in small companies have limited opportunities to improve because they don’t have specialists around to learn from.
- Small companies often have a problem with cash flow.
- Small companies are struggling to work on cash flow to manage bigger projects.
- Small companies may lose a profit from the past few months in the case of a lack of tasks for already employed programmers.
We have analysed our situation deeply at some point in the past. It was when an offer from SoftwareHut appeared on the table. It happened just in time; just when we were ready to move on.
I’m sure that I made the right decision because in my case I couldn’t fully realise my selling skills in foreign markets. During the first meeting with SoftwareHut CEO – Robert Strzelecki – I’ve said that if he takes project delivery from me, I will be in charge of closing sales.
Today, after one year of working at SH, I have marketing and PR support, I’m acquiring clients from a whole different league, and I’m talking about contracts worth much more money. In 2016, I was responsible for 30 percents of incomes in TenderHut Group. It gives me great satisfaction.
What about you and your software company? Where are you headed? What’re your problems? How will you solve them?