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Hiring a Software Developer vs. a Software Firm

There are several ways you can go about creating custom software developed for your business. The two most common options are hiring a software developer or hiring a software firm.

Below we will discuss the pros and cons of each option so you know which is the best for you and your project.

Hiring a Software Developer


Availability: There are a lot of software developers out there. You most likely know someone who knows someone who is a professional software developer, so finding a developer is not hard.

Cost: Many of these individuals are willing to work on the side for a lower hourly rate than what you will find at a staffing firm or software development firm.  You may also find them on a contracting website like UpWork or oDesk, or a one-man business that writes custom software.

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Collaboration: Working with your own personal developer can be great. You get one-on-one interaction, they get to know you, your industry and your product very closely.  You are also able to develop a close working relationship as you both invest time in developing your software.


Required Skillsets: Software development is diverse. There is the web, mobile, and desktop software development, front-end and backend development, architecture, and design.

Each type of programming requires a broad set of skills and experiences to build an application end to end. Not all developers have that expertise.  Some only know web or mobile. Some only build the screens and some stay strictly to the back-end logic.  If you hire a single developer, you may run into limits of what they can do for you.

Design Capabilities: Likewise, not all developers know how to design an application. They are great at coding once they know what you want to build, but you will need to document the software layout and design or outsource it to someone else.

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Process: Your developer may short-cut steps because he or she is the only person working on the project. Documenting requirements, doing a full design, keeping track of tasks and estimating budgets are not something most developers do when they work solo.

They are interested in getting code in your hands and completing the project. While this saves you on project cost initially, it may create difficulties as your application grows and you need to add on new people.

Quality: It is hard for a person to both build and test their own work. Also, when you work alone, there is little collaboration on the best way to do something. In both cases, your application quality may suffer both in the number of defects created and in the overall durability of the code.

Additional Management: Your developer will need management by you. This may mean prioritizing tasks, keeping track of his or her progress, testing their work, prioritizing defects in the software, etc. Managing a software project is a time-consuming task that you will need to take on or hire someone to do for you.

Business Continuity: At its worse, contracting with a single person can be a business continuity risk. Your developer may be slow to respond or might disappear altogether. This is more likely if they are working on your project during nights and weekends.

If he or she does go AWOL, you lose all business and application knowledge and will need to hire another developer or firm to take over the project and come up to speed.

Hiring A Software Firm


Reliability: Software development firms routinely deliver custom software. They will have both the processes and the staff in place to reliably manage, design, develop, and test your software project.  Because of this, there is less risk.

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Quality: Software development firms follow set processes for developing software.  The processes allow for the company to repeatedly deliver quality software for all of their clients.

Each step in the process allows the next step to be more efficient and enables your original idea to be transformed into real working software at the end of the project. Steps will most likely include discovery, requirements gathering, design, screen mockups, project planning, development, and testing.

Business Continuity: As multiple people will be working on your project, the knowledge of your business and application is shared across multiple people. Most professional software companies also insist on documenting requirements and design with drawings and specifications. This means that if a particular developer changes jobs, that knowledge is not lost and it is easy for new team members to pick up where they left off.

Accountability: There is accountability for your project. If you encounter personality or performance issues, you can escalate the matter to managers or the owner of the company to get the matter resolved.


Cost: Software firms will be more expensive than hiring a developer directly. They have to factor in the cost of doing business, management, employee benefits, etc. Software firms also don’t short-cut the process like a software developer might. They will do requirements gathering, designs, project planning, resource planning, status tracking, testing, and issue resolution, whereas a developer typically just develops.

This is a good thing, but your project will cost more in the short term.

Turnover: Turnover is a normal part of the software business.  Developers are in high demand and change jobs every 1-2 years. Your project may see one or two developers transition. Although it is not ideal, good management and processes can smooth over these bumps.

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Ownership: Working with people who truly care about your project is important. Not all software development firms get invested into your business and your product like they should. This can vary from company to company or based on the size of the firm.

Technologies: Some software firms center themselves around a particular product, solution or technology. It is rare that a single technology can solve all problems. You want to make sure that the solution being proposed makes sense for your needs, and the software firm is not trying to fit your square project into their round solution set.


There you have it. Software development can be complicated and it takes the right people with the right processes and skill sets to create software that gives you what you want and that can last. When evaluating your options, consider more than just cost. There have been plenty of companies successful with both models. It just depends on the project and the developer or firm you choose.

The 5 Pillars Of A Successful Software Project

We want to help every software project begin on solid ground. In The 5 Pillars Of A Successful Software Project, we share the five essential ingredients of every software project.

You can grab a copy of the guide below and share it with your team!


Tell Us About Your Software Project!