20 Steps to Start a Software Publishers Business
Starting a software publishers business means building a product once and selling it many times. Whether you are packaging desktop tools, cloud-based apps, or specialized industry software, this guide walks you through every decision a new software publishers business owner faces — from your first line of code to your first paying customer.
Most people who read this already have someone paying them for a newsletter, a template, a small app, or a subscription. That is a real business. You do not need a certificate to make it official before you count it as one. The paperwork catches up to the work, not the other way round. If money has changed hands for something you built or wrote, you are further along than you think. Start where you actually are on the map above, not at step one out of guilt.
This guide is for anyone building an information publishing software business — a newsletter, a paid feed, a course platform, a plugin, a subscription tool, or any product that packages what you know into something people install, read, or log into. You may already have subscribers or buyers and no paperwork at all. That is fine. Work through the twenty steps below in order, or jump to the step that matches where you are. Each step is one action you can start this week.
Before anything else, decide that this is a business and not a hobby you feel bad about. An information publishing software business means you build or write something once and sell access to it many times. That decision changes how you spend your time. This week, write one sentence: "I am building a business that sells ______." Say it out loud to one person who will remember it. You do not need a name, a logo, or a plan yet. You need to stop treating the work as a side thing you might quit. Deciding is the step everyone skips because it feels like nothing. It is not nothing. It is the thing every later step depends on.
You cannot sell "content" or "software." You sell one specific thing to one specific person for one specific reason. Pick the single product you would ship first if you could only ship one. A weekly market briefing. A tool that formats invoices. A course that teaches a skill. Write down what it does, what someone gets, and how they get it — download, login, or inbox. This week, describe your one thing in two sentences a stranger could repeat back. If you already sell several things, name the one that earns the most or the one you most want to grow. Narrow beats broad. A clear single product is easier to price, explain, and sell than a menu nobody reads.
A software publishers business sells direct to its end users in most cases, rather than through traditional wholesale or retail channels. The buyers who matter most at the start are individuals and small businesses that have a specific workflow problem your software solves — think of them as direct end-user accounts, regardless of their own industry. As the product matures, larger organizational buyers enter the picture: mid-market companies and enterprises that purchase seat licenses or annual subscriptions through a sales process rather than a self-serve checkout. Some software publishers business owners also reach buyers through platform marketplaces — app stores or software directories — where the platform handles discovery and the transaction. The full landscape of potential buyers for any given software publishers business depends heavily on the vertical the product targets.
Nothing you plan matters until someone pays. Making one real sale teaches you more than a month of preparation. Thisweek, offer your one thing to one person from the group you named and ask for money — not a promise, not a "maybe later," actual payment. It can be small. It can be manual: you email them a file, you send a link, you take payment however works. The point is to prove someone will trade money for what you made. If they say no, ask why, and you have learned something. If they say yes, you have a business. Do not wait for the product to be perfect. Sell the version that exists now and improve it after money confirms it is worth improving.
Now that money is moving, decide the shape your business takes. The common options are working as a sole proprietor under your own name, or forming a limited liability company or corporation that stands separate from you. Each affects how you are taxed and how much of your own money is at risk if something goes wrong. You are not behind for having earned money first — most people do. This week, read a plain-language summary of sole proprietor versus LLC versus corporation for software and publishing, and write down which one fits your situation and why. If you are unsure, note the questions you have. You will act on this decision in the next step. Choosing knowingly beats drifting into whatever happens by default.
If you chose to form an LLC or corporation, this is where you make it real by filing with your state's business registration office — usually the Secretary of State. If you decided to stay a sole proprietor, you may still register a trading name so you can operate under something other than your legal name. Doing this does not undo or punish the sales you already made informally; it simply gives your ongoing work a formal home. This week, find your state's business filing website, read what your chosen structure requires, and gather the details you need: your business name, address, and the people involved. File it, or book the time to file it. Registration requirements are set by each state, so confirm the specifics with your own state's office.
Once your entity exists, register it with the tax authorities. Apply for an Employer Identification Number from the IRS — it is free and identifies your business the way a Social Security number identifies you. You will need it to open a bank account and to hire anyone later. Then check whether your state requires you to register for state tax accounts, and whether your city or county requires a general business registration for operating locally, even from home. Software and publishing often trigger sales tax questions depending on where your buyers are, so note that as something to confirm. This week, apply for your EIN online and search "[your city] business registration" to learn what local sign-up your area asks for. Requirements vary by state and locality, so verify with each authority.
A software publishers business sits in the LOW regulatory risk tier, which means the general registrations that apply to any new business are your primary concern. You will need to register your business entity with your state — commonly as an LLC or corporation — and obtain a federal Employer Identification Number from the IRS. Most localities require a general business operating license issued by your city or county. If you collect sales tax on software licenses, your state's department of revenue will require a sales tax permit. Beyond those standard registrations, a software publishers business does not carry the specialized licensing burdens of health, transport, or security industries. Confirm current requirements with your state's secretary of state office and your local municipality before you open.
Open a separate bank account for the business and route all business money through it. Mixing business and personal money is the single most common thing that makes taxes painful and, for an LLC or corporation, can weaken the legal separation you paid to create. You do not need a fancy account. You need one that is only for the business. This week, take your EIN and your registration documents to a bank or an online business bank and open the account. Then point your payment processor at it and start depositing everything you earn there and paying business costs from it. From this day forward, one rule: business dollars live in the business account. It makes every later step — pricing, bookkeeping, taxes — dramatically simpler.
The first money a software publishers business spends goes to entity formation and legal work — drafting terms of service, end-user license agreements, and any contractor agreements for developers you bring on. After that, cloud infrastructure costs arrive quickly: hosting environments, development and staging servers, and software-as-a-service tools for collaboration and project management. Then comes the actual cost of building the product — developer time, whether your own or contracted, is typically the largest single category. Marketing and brand assets follow: a domain, a website, and early content. Finally, payment processing setup and accounting software round out the initial spending. The range varies widely depending on whether you are a solo founder writing your own code or a team hiring outside development resources from the start.
Even a business that only ships files and logins carries risk. If you publish information, someone might claim your advice caused harm. If you write software, someone might claim a bug cost them money. If you handle customer data, a breach is a real exposure. The common coverages for this field are general liability, professional liability or errors-and-omissions, and cyber liability for data handling. You do not need every policy on day one, but you should know which risks apply to you. This week, list the three worst things that could plausibly go wrong in your business, then get quotes from an insurer or broker who understands software and publishing. Ask them directly which coverage matches your risks. Buy what fits the risk you actually carry, not everything on offer.
A software publishers business draws from a broader supply chain than most founders expect; only a few categories are highlighted here. Computing infrastructure providers and web hosting companies Data Processing and Hosting are typically the first vendor relationship you establish — they supply the servers, databases, and cloud environments your software runs on. Computer systems design services firms Computer systems design services become relevant when you contract out development work or bring in specialized technical expertise rather than building everything in-house. Legal services providers Legal services support your intellectual property protection, licensing agreements, and entity structure from the earliest stage. The full set of supplier relationships for a software publishers business extends beyond these three categories and grows as the product and team scale.
Right now the whole business probably lives in your head. That works until you get busy, sick, or want help. Write down how the work actually happens — how a new subscriber is set up, how you publish an issue, how you ship an update, how you handle a refund. Keep it simple: a checklist per task, in whatever document tool you already use. This week, pick the one task you do most often and write the steps someone else could follow to do it without asking you. Documenting it forces you to notice the messy parts and fix them. It also makes the business worth something beyond your own hours. A business that only runs when you are awake is a job. Written steps are the first move away from that.
Keep a running record of every dollar in and every dollar out. This is not optional and it is not hard once it is a habit. Good records tell you whether you are actually making money, and they turn tax time from a panic into an afternoon. Track income by product and costs by category — hosting, tools, contractors, fees. Use bookkeeping software, a spreadsheet, or a tool like Stripe's built-in reporting to start. This week, set up one place where every transaction lands, and enter everything from the past month so you are current. Then set a recurring thirty-minute slot each week to keep it updated. The business that knows its own numbers can make decisions. The one that guesses cannot.
Your business owes taxes on its profit, and how you pay depends on the structure you chose in step five. Sole proprietors and most LLCs report business income on their personal return; corporations file separately. Because no one withholds tax from your sales, you likely need to set money aside and pay the tax authorities through the year rather than in one lump. Depending on where your buyers are, you may also owe sales tax on digital products. This week, open a separate savings account, and each time money comes in, move a portion aside for taxes so it is there when due. Then talk to a tax professional who works with software and publishing businesses to confirm what you owe and when. Rules depend on your structure and location, so verify yours.
At some point you cannot do everything yourself. The first hire in this field is usually a contractor — an editor, a developer, a support person, a designer — brought in for specific work rather than a full-time employee. The difference matters: contractors and employees are taxed and treated differently, and misclassifying someone creates real problems. Start by deciding which task drains you most and would free the most of your time if handed off. This week, write a one-paragraph description of that task and what "done well" looks like, then find one contractor to try it on a small piece of work. Pay them properly and keep the paperwork. Getting comfortable delegating a small thing now makes the bigger hires later far less frightening.
The first three sales for a software publishers business almost always come from people who already know you. Former colleagues who understand the problem your software solves are the most credible early adopters — they can also provide testimonials. Second, online communities where your target users gather (forums, subreddits, Slack groups organized around a specific profession or tool) give you direct access to people who are actively complaining about the problem you built for. Post genuinely, answer questions, and mention your product when it is relevant. Third, a short beta program with a small group of invited testers — offered free or at a steep discount in exchange for structured feedback — converts testers into paying customers once the product feels solid. Do not wait for the product to feel perfect; early revenue and early feedback are the same thing.
Buyers need to find you and trust you before they pay. That means being present where people look for what you sell and proving you are real. List your product in the directories, marketplaces, and app stores that matter for your field, and claim your business profile on the platforms your buyers search — a listing on a marketplace like Product Hunt is one place to start. Then verify what can be verified: confirm your domain, complete platform trust checks, and add real reviews from real buyers. This week, pick the one place your buyers most likely look, create or complete your listing there, and ask two happy customers for a short review. Being findable and being trusted are different jobs. Do both, starting with wherever your buyers already spend their attention.
You cannot tell if you are doing well without something to compare against. Industry figures — typical margins, common churn rates for subscriptions, average revenue per user, standard cost structures for software and publishing — give you a mirror. If your numbers are far off, that is a signal to investigate, not to panic. This week, find one published benchmark for your specific corner of the field, whether that is newsletter open rates, app conversion rates, or subscription retention, and write down how your own number compares. Use trade associations, industry reports, and public filings as sources rather than a competitor's marketing. Knowing you retain fewer subscribers than typical, or spend more on hosting than peers, points you straight at what to fix next. Comparison turns vague worry into a specific task.
Now, and only now, write the plan — after you have proven the product, made sales, and seen your own numbers. A plan written before any of that is fiction. A plan written now is a map of a real thing. Keep it short: what you sell, who buys it, what it costs to make, what you charge, how you find buyers, and what you want the next year to look like. You can draft it in a document, a template, or a planning tool. This week, write a two-page version covering those points, using the real figures from your bookkeeping and benchmarks. Revisit it every few months and adjust. The plan is not for a bank or an investor first — it is for you, so you steer on purpose instead of by accident.
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This is how to get started. If you want the whole thing — a plan with your numbers in it, benchmarked against federal figures for your industry, with the procedures for running it already written — that is what we build. A free template asks you to describe your customers. Ours names them.