A reader asks:

I’ve got a great idea for a business but it would require the development of a computer program in order to work. How do I go about getting someone to design a program for me and how do I know they won’t just make it for themselves and steal my idea? Also where could I get funding for such a project?

Another reader asks:

I have an idea that I think could be developed into a web based software. The idea would need me to get a software developer to design my idea but I dont want them to steal my idea and then go and develop it and put it on the market.

Well I’m certainly a good person to ask as software development is my background and web based software is what my first business developed.

Stealing The Business Idea

Despite the emphasis placed on Intellectual Property (IP) in the form of Patents on Dragons’ Den it’s almost impossible to protect a business idea. Sure some people will obsess over Non Disclosure Agreements (NDAs) but no experienced business angel or venture capitalist will agree to sign them so you’re going to have to accept that turning your idea into a business involves sharing it with other people, who could if they wanted, steal it.

The reality however is that if you deal with professional investors or an established firm of software developers they are unlikely to steal your idea, a) they are already in business and b) it would harm their reputation if they were caught stealing their customer’s ideas.

You should also consider that if you idea is that easy to steal, it’ll be copied by competitors (or might even be being worked on already) and it’s probably not a brilliant new or unique business idea.

Funding The Business Idea

There are basically four ways to fund a business:

1. Your savings – use money you’ve saved up.
2. Borrowing the money – either personal borrowing or borrowing through the business, although a startup business without assets will struggle to borrow money.
3. Equity finance – essentially selling a share of the business to an investor, who might be a friend or family member, a business angel or a venture capital fund.
4. Grants – there are a range of grants available for startups, but nearly all of them will require you to have some other funding in place for at least 25% of the total investment.

It’s common for a business to use a mixture of the above.

Finding A Software Developer

It depends how you are funding the development. If you’ve raise money through a grant you might find you’re restricted to using a software developer that is approved by the organisation funding the grant. If you raise finance from an investor it’s worth asking them if the can suggest a suitable company, that they or their contacts have worked with in the past.

If neither of those are the case, then start looking for companies that have worked on similar projects, use Google to find them and check references. Software development is a complex process and the costs will escalate rapidly if you haven’t clearly specified exactly what you want. I strongly suggest you choose a firm that you can meet face to face on a regular basis unless you’ve got extensive experience of specifying and managing software development projects.

Please keep in mind that good software developers will cost between £30 and £100 per hour. As it’s a business I’ve worked in I can also suggest some excellent UK firms contact me if you’d like an introduction to them.

Asking John:
Do you have a business question you would like me to answer? If so you can Ask John or you can ask on the forums where you’ll get both my input and that of your fellow entrepreneurs.

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