Even before Covid-19 lockdowns in almost every industry forced many professionals to begin working remotely from home, there was a growing trend within the gig economy. More and more highly skilled professionals began working from home on a freelance basis in which they ‘thought’ they didn’t need to form and register a business entity. While that may be the case, if you are planning on starting a business as a software developer working from home, it’s in your best interest to form a company and treat it like a business. Here is some of what you need to know.
Make Sure You Have Everything You Need
This is something many freelancers fail to account for. If you are starting out as a home-based software developer, you obviously have a working knowledge of code. That’s a given. However, do you have everything you need to actually begin coding at home? One thing you will need is a computer on which you can write code. There are specific types of computers on sites like Lenovo.com equipped with a midrange Graphical Processing Unit, GPU, such as the AMD Radeon series or the NVIDIA GeForce RTX series. However, if you are using CUDA acceleration technology then you will require a top-tier GPU as would be necessary for gaming. In other words, unless you have the equipment you need, you will not be ready to start a business. Having all the tools of the trade is an absolute must.
Take Care of All Legalities
Not only will you need to register your business by name in your state but also by the type of business structure you want to operate. A sole proprietorship is the easiest to file, however, there is no separating your personal finances from the business financial obligations. You may wish to register as an LLC or a C Corp if you don’t want to be held personally responsible for any business debt. As a sole proprietor, they can take your home and that new Mercedes but as an LLC or C Corp, those things are untouchable unless they are titled to the business.
Insurance Is a Must
If nothing else, make sure you have at least minimal liability coverage. With that said, it really depends on the amount of risk you feel you will be exposed to. For example, if you are developing software for a bank in which thousands of individual and business accounts could be hacked, you want to carry adequate liability coverage. You don’t want to face the financial liabilities if your software left a backdoor open in which a hacker could gain access to all that private financial information.
You will also need to market your newly formed business but that comes after everything else is in place. Once you are ready to launch you can hire a marketing firm but until you have all your ducks in a row, as they say, you aren’t ready to begin working. So then, how do you start a home-based software development company? Gather every tool you will need, form a business entity, get insurance, and then tell the world what you can do.