Business success relies on software.

Custom software is an answer if you want to grow, improve, and excel.

Over 90% of workers have improved their performance by using automation solutions. Almost 90% of them report faster decisions and elimination of errors.

70% of top-performing companies use custom software. According to a McKinsey study, they gain a competitive edge by doing things differently.

Yet, the risks of custom software development for small businesses are enormous due to tight budgets with little room for error.

Be prepared! Avoid issues by identifying pitfalls and establishing best practices before making any investment.

This post is your guide to determine: 

  • Whether custom software development is the best option for you.
  • Your key steps to increasing your bottom with the help of a custom solution.

1 What is Custom Software Development for Small Businesses? 

Custom software development for small businesses means building a solution from scratch tailored to meet a company’s specific needs.

Unlike off-the-shelf software that focuses on features, custom software focuses on processes. Each specific process matches a specific functionality. This method makes it easier to keep software current as part of business process improvement.

The custom software development company is responsible for software updates and maintenance, closing security vulnerabilities, and other related tasks. The company can add new features or change existing ones fast. No dependence on a software vendor’s pace, changing pricing policy, or data rules.

Custom software solutions for small businesses need not be feature-rich, complex, or resource-consuming. But they must always be effective.

A few examples, from simple to complex. Businesses can:

  • introduce a small adjustment to ensure data transfer between two pieces of standalone software suites
  • integrate a custom plug-in for packaged software
  • build a module that no vendor provides
  • deliver a mobile app to bring customer services to a new level
  • launch a large, fully customized platform to simplify internal communication

2 Signs Your Small Business Needs Custom Software 

Off-the-shelf software meets the needs of many small businesses.

But what if off-the-shelf software isn’t a good fit for your business? How would you know? Check out these common signs when a company needs custom software for its business:

  • Disjointed departments

A company’s departments (production, sales, inventory, and marketing) access the same data, but use it differently. The software helps them remain in sync while sharing a common view of the company’s processes. It can be challenging and disruptive when each department uses its own unintegrated software suite.

  • Doing things differently

Off-the-shelf software for small businesses does not meet business needs. A business either pays for functionality it does not use or is restrained by software for business lacking necessary integrations. Often, off-the-shelf vendors do not support smooth data exchange with competing products.

  • Limited expansion

The software falls short in supporting a company’s growing business, which can be an expansion of online presence, automated data exchange with the company’s profiles in social networks, integrating advanced reports and analytics, lack of visibility of payments, and more.

  • Growing IT expenses

The company has achieved its ambitious goals. At the same time, it faces more expensive software subscription plans. It must pay extra for new hires’ accounts and growing data volumes. Expensive, premium support is required to manage any issues immediately and without losses caused by idle time, resulting in decreased revenues.

  • Decreased customer satisfaction

The scope of work generated by growing demand exceeds a company’s capabilities. Both long-time and new customers become discontent when the team fails to deliver. Not a good sign. When a company sets ambitious customer engagement strategies it needs specialized software to set in place effective digital workflows.

custom software for business

3 What are the Benefits of Software Development for Small Business? 

The biggest benefit of custom software for small businesses centers on the word custom.

Businesses get what they require, so they can do what they want. Nothing more. Nothing less.

Specific benefits of business software development include:

custom software development for small business
  • Automated business processes

50% of small and medium businesses (SMBs) invest in IT automation technologies. IT automation technologies are crucial for companies with an ever-increasing number of operations. Just imagine having to manually send thousands of emails to your customers or tracking hundreds of orders! Say goodbye to sleep, to free time, to a life…

  • Optimized sales

51% of companies use digital tools to communicate directly with customers. Over a third sell goods and services digitally. Custom software for business offers increased visibility. It helps keep track of conversations with customers, monitor orders, gain insights, and more. Process transparency increases. As does the service level.

  • Enhanced resource management

Software must be implemented to enable efficient workflow. It must also adjust quickly when the workflow changes. Both are easier with a custom solution. Ineffective resource management can result in loss of two hours per day on inefficient tasks. Can you afford to lose two hours a day? Every day? 250 days (holidays excluded) = 500 lost hours a year! But if your business is 24/7/365, the numbers are higher… much higher.

  • Enhanced security

43% of cyberattacks are directed at small businesses. 86% of small businesses owners DO NOT know how to defend their business from cyberattacks. Small businesses are sitting ducks. Why make it so easy for hackers? By partnering with an expert provider, the company builds a tightly secure infrastructure and sets up a monitoring system and a relevant access policy.

  • Labor force concern

The right software solution allows you to bypass a shortage of qualified labor force, the biggest concern for 52% of small businesses. With the right software solution, the same employees can do more work. Also, training a new employee is faster and less demanding when the need for new workers emerges.

  • Business 24/7/365

Being available to customers 24/7/365 is, without doubt, one of the top benefits of being digital. A stellar customer experience is crucial. 82% of customers pay close attention to loading time. Unless the company is available quickly at all times, it loses its customers to those who are available and waiting for your customers.

All in all, businesses using advanced digital tools can:

  • synchronize processes across different departments better
  • improve employee performance
  • increase customer satisfaction through transparent, predictable services
  • offer new products and opportunities in their markets

4 How can Custom Software Help My Business Grow? 

Custom software efficiently and effectively addresses business challenges and improves business processes.

Think of any specific software use. You can integrate it into your solution.

Let’s look closely at three common types of IT projects for small business: employee management, partner management, and customer management.

  • Employee-facing software

Employee-facing software targets glitches in internal processes. It helps structure processes, automates time-consuming tasks, and decreases risk of errors.

Employee management software is usually cloud-based. This enables distributed departments to operate effectively. However, it makes sound business sense to launch an internal system for mission-critical processes and eliminate risks of direct infrastructure attacks.

small business software development
  • Partner-facing software

Partner-facing software boosts cooperation between two or more organizations, e.g., this includes logistics software for small businesses. Employees gain access to required documentation. They can track essential cooperation details, such as compliance or terms and conditions. Both parties can check order progress and payment statuses, and more.

Partner management software can be launched as a Web cloud-based portal—to simplify the access to required information. API development is required when organizations want to align data exchange.

custom software for small business
  • Customer-facing software

Customer-facing software is the core part of the 21st-century user experience. Growing businesses need specific solutions to drive sales, get insights into customers’ changing preferences, and expand both vertically and horizontally.

Clients rely on apps that improve personal experiences and provide control over their data. In 2022, mobile retail surpassed $387b in the USA. Statistics prove that mobile apps for business or mobile-first Web apps increase your business bottom line better than any other software type.

custom software for business

5 How to Build Custom Software for a Small Businesses? 

Go Agile.

To obtain long-term value, custom software development for a small business must be clearly defined. The best way to achieve this is to clarify throughout the Agile process when those needs become evident.

An Agile approach enables handling an uncertain future. An Agile delivery team concentrates on both short- and long-term value.

The team works in fast-paced, two-week iterations, each resulting in “tangible” deliverables: new feature releases, updates, security improvements, and more.

The product owner receives a piece of working functionality every two weeks that works with previously finished functionality. Product owners can constantly evaluate whether the development is going in the right direction.

It is wise when the team starts with a pilot task. This gives the business an opportunity to test drive the team. The team understands the project and prepares an estimate. Some details become visible after development starts. This could change the initial assessment.

The following aspects directly affect small business software development:

  • Complexity of business processes.
  • Possible licensing and preferred development platform.
  • Available legacy source code and its quality (if any).
  • Hardware capabilities for optimizations and fine-tuning.
  • Integrations with other platforms (e.g., Shopify or Salesforce).
  • Number of current or future users (i.e., need for scalability).
  • Options for remote access and access levels based on role responsibility.
  • Algorithm for seamless integration, eliminating idle time.

As a result, the team produces solutions for business tasks. It switches priorities, ensuring the produced code continues bringing value.

6 How to Build Custom Software for a Small Businesses? 

Custom software development must be an essential part of company strategy. Focus on the overall improvement of business processes. Estimate risks and benefits.

Consider the following points when planning a small business software solution:

  • An in-house or an outsourcing team

An in-house team means businesses retain control over expertise and processes. But an in-house team is expensive. Also, scalability is difficult.

An outsourcing company is less expensive. It adds missing expertise to the project at an affordable price. Scalability is high.

A hybrid team achieves the best from both approaches.

An important note. Ensure the outsourcing development team delivers project documentation and helps with smooth project transition when they have completed the project.

  • Price for expertise

Avoid choosing a seemingly cheap provider: they never really are. A low hourly rate often hides huge risks: lack of programming expertise, business knowledge, or talent.

Cheap, inexperienced teams often miss deadlines, create costly security vulnerabilities, or leave business owners with features that do not work as they should—or not at all. Take time to choose a software development provider specializing in software solutions for small businesses.

  • Software complexity

Software development complexity depends on the number of future users.

If the number of users is low, the software will be over engineered, expensive, and power-consuming. If the number of users is much higher than expected, the software might need redevelopment, wasting your development budget.

Think of your immediate and long-term plans then choose the right option.

  • Updates and maintenance 

Maintenance never stops unless you decide to abandon your custom business software completely.

Ensure you have an in-house or outsourced team responsible for software updates and maintenance. Without professional attention, the software quickly becomes outdated or vulnerable to cyberattacks and stops working properly. The consequences of ignoring software maintenance include derailed processes at the most unsuitable moment.

  • Long-term motivation

Software maintenance might seem to be a rather uninteresting task, causing burnout by software developers. There is a risk of losing key competencies when the leading engineer quits the company. Think of a possible solution before it happens.

Burnout doesn’t happen when choosing an outsourcing software provider to handle software maintenance. The outsourcing provider organizes rotation of its many projects for its engineers. Because your outsourcing provider is a professional, everything is well documented, so new teams know what has been done and what they must do.

7 Tips to Choose the Right Software Development Partner

Here are some important points to consider: 

  • Prioritize your needs

Think of the most to least important project parameters. These can be:

  • Costs – experienced teams are expensive but efficient and autonomous. Less inexperienced teams can save you money, but you could end up with delays or project derailment.
  • Team’s availability – getting in touch is simpler when you both reside in the same time zone. Distant locations often provide another benefit—almost round-the clock-development: you create a task before you leave an office and get it completed in the morning.
  • Software maintenance – you need a special DevOps team to optimize maintenance costs.
  • Non-development activities – an experienced team helps you with business analysis, requirements and project management, and related activities.
  • Look for relevant expertise

Check the company’s experience when looking for a provider. Your best-case scenario is a project similar to yours. The team has already had experience and will know how to handle your requirements and where potential challenges lie. Estimates will be more accurate.

  • Go through verified reviews and testimonials

Evaluate the size and complexity of the completed projects, ensuring they can handle yours. Read improvement areas and advice to future customers when going through Clutch reviews to decide whether you can address specific cooperation challenges.

  • Keep in mind red flags

Pay close attention to response times of company representatives. They must respond swiftly, provide call summaries upon discussions, and present you with a reasonable plan. If they urge you to start before preparation has been completed, suggest an unreasonable path, make a too-low estimate, or respond slowly, you would be wise to look for another team.

Get your Comprehensive Outsourcing eBook today

More advice in IT Craft’s ebook on finding a software development provider.


8 IT Craft’s Expertise in Software Development for Small Business

IT Craft engineers help small businesses do things differently, work faster, and catch up with emerging opportunities.

Here are two from many examples of custom software development for small business with IT Craft:


Flexwise is a trusted platform that enables clinic administrators to optimize their workforce. They can forecast staffing requirements and hire needed nursing professionals in minutes. Management functionality decreases administrative work.

The IT Craft team is working on end-to-end business software development, supporting client’s growth. The team designed a microservice architecture for the Flexwise app to simplify improvements and feature expansions. Automation reduces delivery time.



The cooperation started with the client’s request to improve and finalize his custom CRM system for automated laundry management. Later, the client focused on on-demand laundry services for businesses that required a software transformation.

The team released custom software, helping the client to fully realize his vision and bring his business to a new level. It also introduced all envisaged changes, enabling the client to transform the business while keeping strict control over processes.


! Summary

Custom software development increases the business bottom line, even a small business.

A tight budget, lack of tech background, or untrained staff should not hold you back.

Use this common strategy: 

Focus on doing things better. Look for reliable experts who know how to help.


How to create custom business software?

Consider the following essential steps:

  1. Planning – identify goals and needs. Create a requirements list that meets identified goals and needs.
  2. Development – find programmers who develop software based on the provided requirements list and launch it on the live servers.
  3. Testing and improvement – test the delivered software in real-life conditions. Identify improvement points that the team addresses in the next iterations.
  4. ance – ensure regular maintenance to extend software lifecycle.
What are three examples of customized software?

Custom software for business meets unique needs and demands. It provides specific functionality unavailable or far from optimal in off-the-shelf solutions.

Three common examples of custom software include: 

  • ERP software – used to optimize internal business processes and relationships with partners.
  • CRM systems – used to manage customers and learn their preferences.
  • ecommerce platforms enhance brands by creating unique identities and customer experiences.
What kind of software is useful to small businesses?

Small businesses benefit from the following types of digital solutions: 

  • ecommerce software
  • apps for customers and mcommerce
  • CRM systems
  • inventory and warehousing software
  • payments tracking
  • accounting software
  • internal networks
  • B2B order management systems
How much does a custom program cost?

A custom business software costs between $20,000 and $500,000. The range is wide because every factor affects the costs of custom software!