Is the software agency fundamentally a broken business model?
I started off my career building MVPs for others. I really enjoy building things to spec and helping bring a technical perspective to stakeholders.
However, I've found that while it's lucrative to be a one-man dev shop, it has some scaling issues:
- Scaling
Scaling a dev shop is difficult. Finding talent is hard enough and it almost seems like 2 developers working on the same project is almost always slower than just 1 because of communication overhead.
Therefore I can only commit to so much work at a time. It feels like feast or famine and keeping consistent work is very difficult. I want to be able to give predictable deadlines but juggling between 3 projects between 3 clients is not easy to do.
- Defining Scope && handling change
With clients that are not familiar with tech whatsoever, the concept of sprints has to be thought. Especially if that's your pricing model. You have to spend time to breakdown that you don't charge per project but per sprint and change.
I've charged hourly rates in the past but I really don't like this model. If I were the customer I would hate to be given a "blank check" to the developer. I want to know upfront how much things cost so I can budget. It's a reasonable request.
However, as we developers know, customers don't know what they want until they see it.
This turns into constant scope creep and change. At points you're tempted to just go with the clients' requests rather than keep changing estimates. Which eventually leads back to the hourly rate idea.
I really enjoy building out other's ideas but handling these 2 major aspects of the service business is difficult for me to understand and compensate for.
For those successfully running a consultancy/service business what are your strategies to handle these billing and operational issues ethically?
Hi, i'm having the same problems. I'm located in Argentina / Chile, and we are constantly experiencing the same problems. It's hard to grow, the only time we have being growing fast is when we located our people as consultant in the clients headquarters.
But in those cases you loose track of your people, the quality. It's not what i want. And every one is making the same, it easy to be replaced by larger companies when they want more people that you have.
Today we are trying to make our own product cause i got tired of trying to grow the business like that (Consultancy or developing inhouse being small). But well, i'm open to learn new ways how to handle the software agency.