How to start Selling Software


2

I have been looking around for a guide or some advice on what I should do next with a program I created. I have been programming as a hobby and I finished making a small program that I am thinking about selling it online.

I have no idea what to do next.. I live in Canada, and I am not sure if I need to do some registrations with the government or any legal stuff. Can I just start selling my program through a website and receive the money through Paypal? Can I sell worldwide without legal issues? Do I need to make a company?

Also, I am still in High school, and the program helps computer novices make programs (like Visual Basic), I don't know if those factors would cause any more implications. I found about this site by searching Google pages for a guide then landing here. If anyone knows a guide or process/steps/advice or anything, that would be awesome.

Software

asked Aug 16 '12 at 10:37
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Flippy
13 points

2 Answers


3

That's awesome that you have achieved some programming success while still in high school.

If you want to sell your software, you need a market hypothesis. That is, you need to figure out the kinds of people who have a need to do something which your software does better, faster, , and is worth more to them than the price of your software. So first come up with who you think would be interested in your product, and then approach them to see if they like your product and would be willing to pay for it.

There are a lot more things that you'll need to do to sell it. I recommend reading The Startup Owner's Manual by Steve Blank & Bob Dorf. It's one of the best books I have read on the topic.

answered Aug 16 '12 at 23:13
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Jay Godse
381 points
  • Thanks for the info Jay. My plan is to sell it much cheaper than everything else out there. I am just wondering, Can I just start selling my program through a website and receive the money through Paypal? or Would I get in trouble for missing a step? – Flippy 8 years ago

1

It sounds like you know what you want to do with your software product, and are asking about the business side of proceding.

Let me answer for the U.S., although I believe it's all the same in Canada - at least at this general level. You'll have to get the specifics there.

The short answer is Yes, you can just offer your software and take payment through Paypal or any other way you can get paid. And people do that. But there is also a reason why developers form companies. What you are suggesting makes you a "Sole proprietor", which just means you are selling personally, yourself. The problem is, that makes you liable for everything. It might also make it difficult to sell the ownership of your product to a big company who doesn't want your personal problems and liabilities. And, there are tax differences based on your choices. Additionally, financing is even harder to get as a personal business.

Most developers probably wouldn't do what you're suggesting and sell software personally. The most common "business form" is the LLC here in the U.S. It was created fairly recently to make it simple and cheap to form a company. LLCs and corporations provide "limited liability", which simply means you can't be liable (sued) for more than what you have invested in the business, (in most cases).

You can still do it either way you decide.

Just one comment on your sales strategy. While price is very important, it is well known that simply selling cheaper is rarely a successful strategy, unless you have found a much cheaper way than your competitors to produce what you are selling. If your costs are the same, it all comes out of your profit.

Good luck!

answered Aug 18 '12 at 00:00
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Patrick Moloney
126 points
  • Can you form an LLC as a minor? – Dj Clayworth 8 years ago
  • Wow great help. After reading your response then researching, I think becoming a Sole proprietor would be easier. Setting up a corporation seems very difficult and in Canada, there is no LLC. As a sole proprietor, Do I have to pay tax for my profits? I am thinking about going with FastSpring to manage the money for me, and I think that they include taxes when a product is sold. Do I need to register with the government for paying taxes? I hear alot about a tax number. Also, I am planning to make a free version of the software but it displays a watermark on anything created with it. – Flippy 8 years ago
  • I am also going to do beta testing before anything to make sure that people like it. – Flippy 8 years ago
  • You already are a sole proprietor - that is the default. I'm not familiar with FastSpring, but these companies hold sales tax, if anything. The taxes you're should mean are income taxes. They have no idea how much income tax you owe. And if they did withhold something toward that, it would only be a downpayment. You would still have to make a complete filing and pay what additional you might owe. All of that said, I have no idea on the specifics in Canada, buat the big picture should be the same. -- Oh, and if you found this to be "great help" feel free to accept my answer so the system works – Patrick Moloney 8 years ago

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