Key Takeaways
- Knowing how to choose a software development company starts with a short list: three to five vendors, narrowed to two or three finalists.
- Ask every vendor the same 12 questions on fit, process, pricing, code ownership, security and support.
- Put change rules in writing. PMI's 2018 Pulse of the Profession (July 2018) found 52% of projects had scope creep.
- Put ownership in writing too. A US copyright transfer must be written and signed.
- Score finalists on a weighted scorecard and treat a 1 out of 5 on IP (intellectual property) or security as a dealbreaker.
We are Software Solutions Inc., a custom software development company, so we may be on your list. Here is how we would want you to vet us.
How to Choose a Software Development Company in 6 Steps
To choose a software development company, write a short brief, shortlist three to five vendors with relevant work and ask each the same 12 questions. Then check verified reviews, call references, score finalists on a weighted scorecard and test your top pick with a paid discovery phase before you sign a full contract.
- Write a one-page brief: goals, users, systems, budget and deadline.
- Shortlist three to five vendors.
- Ask the 12 questions below.
- Check reviews and references.
- Score finalists.
- Run paid discovery.
How Many Software Development Companies Should You Shortlist?
Shortlist three to five software development companies for first calls, then narrow to two or three finalists for references and scoring. Three gives you a real comparison of price and approach. Past five, you add meetings without adding insight. Send every vendor the same brief so their quotes compare fairly.
What Should You Ask About a Vendor's Fit and Experience?
Ask whether the vendor has solved a problem like yours and who will actually do the work. Relevant experience cuts planning time and surprises. Knowing the real team protects you from meeting senior people during sales and junior people during delivery.
1. Have you built something like this for a business like ours?
Why it matters: a team that has built something similar already knows the edge cases. Good answer: comparable projects and a reference you can call. Red flag: "We can build anything," backed by screenshots with no story.
2. Who exactly will work on our project?
Why it matters: the people who sell a project often are not the people who build it. Good answer: named roles and a call with the lead engineer before you sign. Red flag: "We will assign the team after you sign."
What Should You Ask About Process and Communication?
Ask what happens before coding starts and how you will see progress once it does. A good vendor maps your goals, users and systems, then puts scope and an estimate in writing. During the build, you should see working software every few weeks and have one named contact who replies fast.
3. What happens before you write any code?
Why it matters: in a McKinsey and University of Oxford study of more than 5,400 IT projects (October 2012), large projects ran 45% over budget on average and delivered 56% less value than predicted. Good answer: a discovery phase, meaning a short planning stage that ends in a written scope and estimate. Red flag: a firm quote after one short call.
4. How will we see progress, and who do we talk to?
Why it matters: problems spotted early are easier to fix. Good answer: a demo after every sprint (a fixed work cycle, often two weeks) and a dedicated project manager. Red flag: monthly status emails and nothing to click until it is "ready."
We work in two-week sprints, give clients direct access to engineers and reply within one business day.
What Should You Ask About Pricing and Contracts?
Ask which pricing model the vendor recommends and how it handles changes. The right model depends on how settled your scope is. The contract should list what is included and excluded, and every new request should be estimated and approved by you before anyone bills for it.
5. Which pricing model fits our project, and why?
Why it matters: fixed price is one agreed price for a defined scope. Time and materials bills actual hours, which suits evolving products. Good answer: a recommendation tied to your situation, trade-offs included. Red flag: a quote far below everyone else's with no explanation.
6. How do you handle change requests, and what is not included?
Why it matters: scope creep means requirements grow without matching changes to budget or timeline. PMI's 2018 survey put it at 52% of projects, up from 43% five years earlier. Good answer: a written change process with an estimate you approve first, plus listed exclusions. Red flag: "Don't worry, we're flexible."
Who Owns the Code When You Hire a Software Development Company?
You should own the source code, designs and documentation, and the contract should say so in writing. In the US, calling custom software a "work made for hire" may not be enough on its own, so ask for an explicit written assignment of rights.
7. Who owns the code, designs and documentation?
Why it matters: by default, the creator of a work owns the copyright, says the US Copyright Office. Its Circular 30 (revised August 2024) lists nine categories of commissioned work that can be "made for hire," and software is not one. Under 17 U.S.C. section 204(a), a copyright transfer must be written and signed. Have a lawyer review the IP clause. Good answer: "You own everything we build, assigned in writing." Red flag: the vendor keeps ownership and licenses your product back to you.
8. Will we control the repository and accounts from day one?
Why it matters: a repository is where your source code and its history live. If the vendor controls it, you are locked in. Good answer: admin access for you and accounts in your company's name. Red flag: a fee to hand over code or credentials.
Our clients own all source code, designs and documentation, with no lock-in and no hidden licensing fees.
How Do You Vet a Software Vendor's Security and Compliance?
Ask how security fits into every release, not just the last one, and whether the vendor will sign the agreements your industry requires. Look for a named framework, testing on each release, limited data access and a clear AI tools policy. Compliance belongs in discovery, not the week before launch.
9. How do you build security into every release?
Why it matters: NIST's Secure Software Development Framework (SP 800-218, February 2022) gives buyers and vendors a shared vocabulary for secure development. Good answer: security testing before every release, role-based access (people see only what their job needs) and a non-disclosure agreement (NDA) before discovery. Red flag: "The cloud provider handles security."
We use only approved AI tools for tasks like testing and code review, and never use client data to train outside models.
10. Can you meet our regulatory requirements?
Why it matters: a vendor handling protected health information for you generally needs a business associate agreement, a contract limiting how it uses and protects that data, per HHS. Under GDPR, a vendor processing personal data for you needs its duties set out in a contract or other legal act, per the European Commission. Good answer: planning for HIPAA, PCI DSS (the payment card security standard) or GDPR from day one. Red flag: "We'll make it compliant at the end."
What Support Should You Expect After Launch?
Expect a written support plan covering monitoring, bug fixes, security updates and response times, at a clear monthly cost. You should also know how you would leave: what the vendor hands over, how long the transition takes and what moving the work elsewhere costs.
11. What does support look like, and what does it cost?
Why it matters: users find bugs. Good answer: a service level agreement (SLA), meaning written response times by severity, plus cloud and DevOps monitoring. Red flag: "Just call us if something breaks."
12. If we part ways, how do we leave?
Why it matters: even good partnerships end. Good answer: a documented handover plan. Red flag: exit fees to get your own code back.
How Do You Check a Software Company's Reviews and References?
Read verified reviews on a platform such as Clutch, then call at least two references per finalist. Reference calls let you ask harder questions: did the vendor hit its estimate, how did it share bad news, and would the client hire it again?
Clutch's help center (checked October 2026) says it confirms each reviewer's identity and work history, and labels reviews it cannot confirm "Not Verified." On calls, ask about a project that went off track.
How Do You Score and Compare Software Development Vendors?
Use a weighted scorecard. List the criteria that matter, give each a weight so they total 100%, score each vendor 1 to 5, then multiply and add. The total makes trade-offs visible. Setting dealbreakers in advance stops a polished demo from outweighing weak contract terms.
| Criterion | Weight | Score 1 to 5 on |
|---|---|---|
| Relevant experience | 20% | Similar projects, references |
| Team and seniority | 10% | Named people, senior lead |
| Discovery and process | 15% | Written scope, sprint demos, testing |
| Communication | 10% | Named manager, response time |
| Pricing and contract | 15% | Model fit, change process, exclusions |
| IP ownership and exit | 10% | Written assignment, handover plan |
| Security and compliance | 10% | Release testing, signs a business associate or data processing agreement |
| Support after launch | 10% | SLA, monitoring, monthly cost |
Adjust weights to fit. A healthcare product might raise security to 20%.
Worked Example: Two Hypothetical Vendors
Vendor A and Vendor B are fictional. Vendor A is cheaper with a strong portfolio but wants to keep code ownership. Vendor B has less industry experience but clear IP terms.
| Criterion (weight) | A score | A weighted | B score | B weighted |
|---|---|---|---|---|
| Experience (20%) | 5 | 1.00 | 3 | 0.60 |
| Team (10%) | 3 | 0.30 | 4 | 0.40 |
| Process (15%) | 2 | 0.30 | 5 | 0.75 |
| Communication (10%) | 3 | 0.30 | 4 | 0.40 |
| Pricing and contract (15%) | 3 | 0.45 | 4 | 0.60 |
| IP and exit (10%) | 1 | 0.10 | 5 | 0.50 |
| Security (10%) | 3 | 0.30 | 4 | 0.40 |
| Support (10%) | 2 | 0.20 | 3 | 0.30 |
| Total (out of 5.00) | 2.95 | 3.95 |
Each weighted cell is weight times score. Vendor A totals 2.95 and Vendor B totals 3.95. Vendor B wins despite the higher price, and an "IP below 3" dealbreaker would have cut Vendor A first.
Is a Paid Discovery Phase Worth It?
A paid discovery phase is usually worth it because it is the cheapest way to test a vendor before a full build. You pay a small, fixed fee for a scope, architecture plan and estimate. If the work is weak, you leave with documents another vendor can use.
Every Software Solutions Inc. project starts with discovery under an NDA, and you approve clickable screens before development begins.
When Don't You Need a Software Development Company?
You may not need a software development company if an off-the-shelf tool covers most of your needs, your team lacks just one skill, you cannot fund upkeep, or you have not confirmed users want the product. A subscription, a freelancer or a quick no-code prototype will cost less and teach you more.
Custom work pays off when packaged tools cannot connect to your systems or when you are replacing legacy software that holds you back.
Choosing a Software Development Company: Your Next Step
Now you know how to choose a software development company: shortlist three to five, ask all 12 questions, check references, score finalists and test your top pick with discovery. Get ownership and change rules in writing first.
Want to test us? Bring these 12 questions to a free consultation with Software Solutions Inc.
Sources
- McKinsey & Company, Delivering large-scale IT projects on time, on budget, and on value (October 2012): a study of more than 5,400 IT projects with the University of Oxford; large projects averaged 45% over budget and delivered 56% less value than predicted.
- PMI, Scope Patrol (PM Network, July 2018): 52% of projects completed in the prior 12 months had scope creep, up from 43% five years earlier.
- US Copyright Office, Circular 30: Works Made for Hire (revised August 2024): the nine categories of commissioned works that can qualify as works made for hire, software not among them.
- US Copyright Office, Frequently Asked Questions: Definitions: the creator owns the copyright by default.
- Cornell Legal Information Institute, 17 U.S. Code section 204: a transfer of copyright ownership must be in writing and signed.
- NIST, SP 800-218, Secure Software Development Framework Version 1.1 (February 2022).
- US Department of Health and Human Services, Sample Business Associate Agreement Provisions.
- European Commission, What is a data controller or a data processor?
- Clutch Help Center, How Clutch Verifies Reviews.
Frequently Asked Questions
Plan on three to six weeks. That covers writing a brief, sending it to three to five vendors, holding calls, checking references and scoring finalists. Signing within a week usually means skipping reference calls or contract review, and those are the steps that catch expensive problems early.
Not always, but a quote far below the others needs an explanation. The vendor may have assumed a smaller scope, a more junior team or less testing. Compare every quote against the same brief, ask what is excluded and look at first-year cost including support, not just the build.
A software development contract should cover scope and deliverables, pricing and payment schedule, a change-request process, a written IP assignment, confidentiality, security and data protection duties, a support plan with response times, and termination and handover terms. Have a lawyer review it, especially the IP and liability clauses.
Choose the vendor that scores best on your criteria, then check practical fit. Overlapping working hours, language fluency and legal jurisdiction matter more than distance. Ask how many hours of overlap you will get each day, where your data will be stored and which country's law governs the contract.
Not for a first call about general goals. Before you share business plans, data or system details, sign a non-disclosure agreement (NDA), a contract that keeps your information confidential. A trustworthy vendor will offer one without being asked. Software Solutions Inc. signs an NDA before every discovery phase begins.
The Software Solutions Inc. Team
Engineering & Content Team
Written by the team at Software Solutions Inc., a custom software development company building web, mobile, AI, blockchain and cloud software. We write these guides from what we learn on real client projects.
