How to Hire a Software Development Company
Business | Ivona Cipar

How to Hire a Software Development Company

Monday, Mar 20, 2023 • 11 min read
Five steps to undertake in order to start a new software development project with a partner company.

Starting a new software development project is a complex process, not to mention if it is the first time you are partnering up with a software development company that will work on your project.

Finding the perfect fit for you, your business and the project in question is a difficult task - a task that refers not only to just picking a company, but also to complicated preparation and planning, both pre and post finding the partner company. A considerable number of risks can be avoided and different stages eased if you choose your partner company correctly, but in order to do that, you need to come prepared.

In this blog post, we go over the most important steps in finding that one company that will do your outsourced work as if you were to do it yourself, perhaps, and hopefully, even better. We will also cover additional phases included in the process of hiring, both those that occur before and after you have narrowed down your choice to the one software development company.

A good software product and a successful project are the direct result of great and thorough planning, analyzing and researching.

While a great idea you have that will streamline the work within your company and improve your business process is a starting point, it can be fatal for your entire project if it is not elaborated and specified to the very last detail.

Outsourcing projects fail. According to Dun & Bradstreet’s Barometer of Global Outsourcing, “20 to 25% of all outsourcing relationships fail within two years, and 50% fail within five.” Causes are many, but the main source of dissatisfaction leading to partnership termination is poor project management, along with simply not choosing an adequate vendor to fulfill your goals.

Say you do master the first step, which refers to a detailed plan of project requirements, explained in detail later in the blog, but you fail to choose a software development company that has the experience and the ability to complete those requirements - your planning was futile.

It works the other way around, too. You choose a trusted and experienced company, but your requirements were unclear from the outset. No matter how experienced and talented, the software developers you are working with cannot deliver a satisfactory product if you yourself are not sure what exactly it is that you want, or have simply not written it down and elaborated on your objectives.

The delicate process of choosing and hiring a software development company can, thus, be summed up in the following five steps:

  1. Define project requirements and deadlines.
  2. Find potential companies.
  3. Shortlist companies.
  4. Choose the right company.
  5. Confirm legal details.

Choosin and Hiring Software Company

1. Define project requirements and deadlines.

Before you even start searching for a partner that will develop your software project, you need to be clear about what you need, otherwise it may turn out that you choose a company that cannot complete your project, or complete it the way you desire. If your project requirements are not defined clearly enough, it may result in a poor final product, missed deadlines and a lack of satisfaction on both sides.

And what precisely are project requirements? It refers to the tasks, functions and conditions the fulfillment of which is crucial to the success of the project. Here, we make a distinction between business requirements and technical requirements. The former refers to the overall business objectives that the project aims to accomplish, while the latter specifies the methods and technologies that will be used to achieve those objectives.

Project requirements are connected to, but do not mean the same as project goals. If you are thinking about starting a software project, you likely already have a project goal. In terms of software development, a project goal may be that your company needs an HR management system that will help optimize your process of recruiting and hiring employees. On the other hand, a project requirement would be that, for example, the software has a communications platform, database management feature, a calendar and the ability to automate replies.

Project goals are the WHAT, and the project requirements the HOW.

Goals refer to what you want to achieve, while requirements to the precise and exact ways of reaching your desired project outcome.

SMART goals SMART requirements
Long-term Short-term
Primary goal Smaller steps to meet the goal
Collective effort by the whole team Divided into les complex tasks for smaller groups of people
Follows a general strategy More tactical, on-the-fly adjustments

According to Info-Tech, “up to 50% of project rework is attributable to problems with requirements, [while] of projects that fail, 70% fail due to poor requirements.” A highly effective method for setting your goals and requirements is the SMART approach. The SMART abbreviation represents the following concepts: Specific, Measurable, Achievable, Relevant, and Time-bound.


Set your goals and requirements, both short- and long-term, and present them to your potential partner to define whether and to which extent they can complete them. However, keep your expectations realistic, especially in terms of deadlines.

Setting realistic deadlines can be troublesome if you do not have experience in the field of software development and cannot precisely assess the time needed to complete certain tasks, or even the entire project.

The good news is that this is something your partner company can help you with. While you may have recommendations, they will be able to clearly set out the deadlines, usually under the guidance of their project managers.

2. Find potential companies

Outsourcing type

After you have made a detailed plan and assessment of your project and desired product, decide which way you wish to outsource your work to, while taking into consideration all the pros and cons of each available option.

The options are the following:

  • Onshoring. Outsourcing your work to a company that is located within the borders of your country.
  • Nearshoring. Outsourcing your work to a company located not more than 2-3 time zones away.
  • Offshoring. Outsourcing your work to a company located on a different continent and with a greater time-zone difference.

This will be the starting point for your initial research of potential companies. Once you choose the region, research your options based on location criteria.


The best way to start your research is simply by Googling software development companies based on their location, and the services they provide.

Another great source for finding a partner company is LinkedIn, in which the results can also be filtered by location or other relevant criteria.

For additional information about the company, such as their average prices, the technologies they use and the size of the company, you can visit Clutch. An added benefit offered by Clutch is the possibility to see the average client rating, as well as client comments.


Of course, another option you can choose is to decide on your partner based on quality recommendations, that is, if you have them. In an abundance of options, it may be difficult to find a good partner, which is why having someone recommend a company they have already worked with and whose work has already been proven to be good, is the easy way out.

However, even though you may get a recommendation, you still need to make sure that this company, no matter how satisfied someone else is with them, fits and can complete your project requirements. This is why you made them in the first place.

3. Shortlist companies

After conducting your initial research, you should have a list of potential software development companies. The next step is to shortlist those companies that seem like a good fit for your project. To do this, you should consider a variety of factors, including:

  • Background and experience.
  • Portfolio and technologies.
  • Clients and references.

While you may be able to quickly exclude some companies that you initially found as potential options, simply by them not fulfilling important factors from the list, for others it may be a bit more difficult and require you to go into detailed research. While you may do all of this yourself, you may also opt for contacting the companies directly to receive the information you need. However, this step should be reserved for an already shortened list of candidates so as not to waste your time on unnecessary communication.

Background and experience. Usually available on company websites in the About us or similar sections, you will quickly be able to learn more about the company’s history, when they were founded and who the founders are. You may additionally check their LinkedIn profiles or Google the founders to see who you could potentially work with. You will also be able to see how much experience they have and how long they have been working in the software development industry. If available, a useful source of information would be information of their prior outsourcing partnerships, because, since this is a complex sort of partnership, companies that have no experience with it, may “get burned”.

Portfolio and technologies. Next thing you should check is the work portfolio. Again, most software development companies have those available on their websites, along with the list of technologies used for particular projects and the technologies their developers are working with. The portfolio can help you see the complexity of the projects they had previously worked on, their size and scope, as well as industry knowledge. You may work in the pharmaceutical industry, so a company who has already developed projects for the same industry may easily find their place on your list of potential partners.

Mono portfolio

Clients and references. While these may also be available on the company’s website, you are advised to visit other platforms, primarily Clutch, which will show unbiased information, since clients leave their ratings and comments on their own. You should seek and use this information to confirm what you learned about the company and to ensure they are a good partner to work with.

4. Choose the right company

To make sure that the company you are choosing as your partner is the correct choice for you, your next step should be to contact them and start the communication. Conduct interviews with the shortlisted candidates to discuss pricing, to further elaborate on their technical abilities and experience with similar projects, to allow them to ask questions about your project, as well as to see whether you are a cultural fit and that there are no boundaries to communication. This is a critical decision, as the success of your project will depend on the company you choose.

Pricing. Included in your initial planning, you should have a set budget for the project. The process of estimating the cost of the project is its own complicated endeavor as so many different factors can influence the final cost of your project, such as the type and size of the project, technologies used, etc. You should also decide which type of contract you wish to sign - whether it is a fixed-price contract, or a time and materials contract. The type of contract you choose will, again, depend upon your initial project requirements and deadlines.

To make it fit within your budget, do not just go for the cheapest possible option you find - this, in the end, tends to be the most expensive option, since it usually comes at a cost with regards to quality.

Availability. This step is very simple - you just have to determine whether the company has the developers available to finish your project within your desired timeframe and deadlines and whether they will be focused only on your project if you need them.

Cultural fit. When choosing to work with another company, the determining factor should not be just their technical expertise. While this is most certainly your starting point, when you start interviewing them, you should ask about and analyze their company culture. The way they run their business, the approach they have to work, to deadlines, to the quality of work, their approach to their employees - everything should be communicated and analyzed so that you ensure this is someone you can cooperate with, and someone you can trust. An additional step would be checking their social media profiles and their blog posts, which should help in building the image of the company. The ideal situation would be cooperating with someone who has the same approach and whose work is governed by the same principles as yours.

Communication. The importance of communication can never be highlighted enough. It is a crucial factor at the very beginning for your initial negotiations, since this is when you go through your project requirements, discuss the company’s technical knowledge and prior experience with similar projects, and, as mentioned, their approach to work. Your initial conversations should give you clear clues and understanding of how you will be able to communicate with them in the future. Along with poor project requirements, communication is one of the top reasons projects fail. This data does not refer to outsourcing projects, but to projects in general - including in-house projects and teams who are working within the same company. This is why you should put an even bigger emphasis on the importance of communication when you have an outside team working for you, since this is a situation in which you may have even more potential communication barriers. Your project cannot and will not progress if everything throughout the course of its development is not clearly and distinctly communicated - between you and the partner company, between you and their project managers, between the project managers and the development team, as well as within the development team itself.

Once you have found a company that fits you best, the next step is to write everything down on paper and sign it. To secure yourself and your project from any kind of unlawful or harming practices, invest time in crafting detailed contracts that will clearly define your expectations in terms of project requirements, specifications, deadlines and timelines. Make sure to arrange a pricing plan that will work both for you and the chosen company and ensure maximum profitability of the partnership.

Also, protect your company and your data by signing a non-disclosure agreement (NDA) to legally bind your partner in keeping all your confidential information private.

Regarding your product, ensure who owns the rights to the intellectual property that is being created throughout the project, such as patents, copyrights and trademarks. Additionally, you can sign a non-compete clause that will prevent your partners from working with your competitors on a similar product as yours for a particular period of time in order to protect your business interests and goals.

Price-wise, as was previously briefly mentioned, you sign one of the two types of price contracts. A fixed price contract is a good choice for you if your requirements are clearly defined to the very last detail, the work can be clearly assigned, and the deadlines are set. On the other hand, if you initially do not have everything worked out and plan on changing the requirements along the way, a better choice for you would be a time-and-material contract. This would be a wiser choice since the development time will probably change as well due to the changed requirements, which means you will pay for how much time exactly is spent in the end.

Comparison of Fixed Price to Time and Material

Starting the cooperation

Once you have finally gone through this process of selecting and initial negotiations, and after you have produced all the necessary documentation and contracts, both sides have agreed and signed them, you can start working on the project.

If you have chosen carefully and planned diligently, your project will surely start from solid ground, greatly increasing the probability of its ultimate success and your satisfaction - and even probable future cooperation with the same software development company.

The success of your project heavily relies on your ability to define your project requirements, set realistic deadlines, and find the right outsourcing partner. By following the five steps outlined in this blog post, you can avoid most of the risks before even starting the project and, this way, ensure its success.

Keep in mind that, once the project starts, communication and collaboration with your partner company are essential for achieving your project goals, and previously set requirements.

Therefore, make sure you choose a company that not only has the necessary technical skills but also understands your business objectives and values.

With the right partner company, you can achieve great results, improve your business processes, and gain a competitive advantage in your industry.

Get results with Mono

Entrusting an experienced team to make your project come to life is a benefit that cannot be overlooked. You can easily research Mono’s past client and in-house projects, the technologies we have expertise in, the industries for which we have been spending years developing custom software solutions, as well as client testimonials on our profile available on Clutch. What we would like most is you contacting us and learning everything you need to know first hand.

So, get in touch with us and let’s make your project goals happen.