Hi guys. I’ve recently started my software development agency. We’ve got our first client, signed a contract with him and developed an MVP of a mobile application for him. I prepared to hire digital marketers to expand the agency, however, occasionally, the client lost all his money and he wasn’t able to pay us for our services. Here’s the situation, we need money to pay our developers, we need money to get more clients for our agency. We’ve got the MVP of the mobile app, but it’s without clients, and it’s hard to sell. I’m thinking of attracting investors for the MVP and developing the app on our own, I don’t know where and how to raise the capital quickly to develop the app and save the agency. How would you approach the situation?
Welcome to the school of hard knocks.
Instead of spending money to finish this product and then more to sell it, I would park it on a shelf for the time being and revisit your business model.
For example, there are not many businesses that come out of the gate like a race horse. Consequently, it is commonplace for firms to budget capital to cover operating expenses until the business is cash flow positive.
However, if you are trying to launch on a shoestring budget, I would require 50 percent down to start an assignment and 50 percent when the product is delivered.
You should really look into hiring overseas! Especially for the Digital Marketing talent.
I’ve found that needing to scale, but not having the funds for it, is what drives a lot of companies to hire outside the US, and it ultimately ends up transforming their business.