One side hustle that is potentially extremely lucrative is to develop and sell your own software. This could be software programs that run on a computer, website-based software, or even software for third-party programs such as WordPress plugins.
The big downside to this side hustle is that you either need extensive programming knowledge for one or more languages or you have to be willing to risk a lot of money by paying someone else to build the software for you.
While this is a high-risk business, it also offers the potential for high rewards. Mildly successful software can generate six figures a year, while extremely popular titles make millions each year.
Why Develop Software?
Creating your own software and selling it online is one of a handful of businesses that has the potential to reliably earn six or even seven figures annually. There is one simple reason why this approach is so successful – people need software. You’ll find it much easier to make money online when you create the things that people already need instead of trying to make something new that they don’t know that they need.
A lot of people try to make money at home, and the Internet makes it quite easy to turn this dream into a reality. However, beginners often have obstacles that stop them from being able to succeed. If you can identify these obstacles and problems, you can create software that will provide solutions. This type of software is some of the easiest to sell.
You can also develop programs for everyday people that aren’t trying to make money online. A variety of tools could be used to make someone’s life easier or more organized, just as one example. Ultimately, if you focus on solving problems, you’ll have a much easier time finding success as a developer. Overall, this is not a side hustle for a complete beginner. However, after you spend a few years doing work online, you’ll often come up with an idea that you may consider developing, so it’s good to keep this business in mind for the future.
If you have an idea for software that you think could be successful but have zero programming knowledge, you could outsource the development, especially if you are more confident with your abilities to market and sell it once it is developed. You do need to be careful with this approach though. You can easily end up running into costs that far exceed your budget or receive low-quality work that doesn’t match your vision.
I do my own programming, but I am friends with other developers that don’t know the first thing about code. Some of them release amazing titles that look great and are really useful. However, others will try to sell some of the most embarrassing, clunky and pointless software I’ve ever seen.
Freelancing sites like Upwork can be used to find programmers to hire. However, I want to offer an alternative that will usually work better. Instead of hiring a programmer, partner with one. You’ll need more than just an idea though. If you can handle building the website, customer services, marketing and sales all by yourself, then you may be able to get a programmer to partner with you. You don’t have to pay anything upfront with this type of deal, but you’ll likely have to split profits.
A lot of people will shy away from having business partners because they want all of the revenue, but there’s one big reason why this can work better for software development: quality. When you pay someone for programming, they’re going to do the job with as little time and effort as possible to reach your minimum requirements. When you’re building your own software you will go above and beyond to make it high-quality, which you can get from a partner but not from an employee.
I spent more than a decade making a living programming and selling my own WordPress plugins. Since that time, usage of WP has easily doubled worldwide. It’s now the most common platform used to create websites, so it’s the perfect system to build upon with new software to sell. This can be plugins to add new functionality to WordPress or themes that control the design of a site.
Once you create something to sell, finding customers can be the hardest part. When you develop for WordPress, you can actually use their system to bring you new leads and sales. By releasing a plugin or theme for free, you can have it included in their directory of software that can be easily found and installed directly inside of WordPress.
The trick is creating plugins or themes that have two sets of features – one for free users and the other for paying customers. The free version still needs to be useful enough for people to want to use it, even if they never upgrade. You make money by converting for free users into paying members, which gives them access to an extended set of software features.
Software sales can be a one-time purchase, but the most successful businesses are often SaaS (Software as a Service). This allows you to collect monthly fees from software users to get continued access. This could be software that is created to run on a Windows or Mac desktop computer, website based software or even plugins / themes for WP.
It can be really tempting to try this business model, but I can tell you from experience that it’s not as easy as it seems. People don’t like monthly subscriptions, so they’ll avoid them whenever possible. There are two exceptions that cause people to let down their guard with monthly subscriptions – need and cost.
As a website builder and online business creator, there’s a few things that are absolutely essential to my business. Website hosting services are one of them, although I lease entire servers these days and don’t bother with cheapy web hosts like GoDaddy or HostGator. I find that almost every business I build has the need for custom graphics, so I’ve been a subscriber to Adobe Cloud to get Photoshop access.
Think about the audience you want to target and what they need. Don’t try to create something that you need to talk them into buying. Build something that they have to have so they come to you. When you can come up with an idea like that and put it into action, success will find you. Trying to sell something unnecessary will be a constant struggle, especially using the software as a service model.
Cost can also be a reason why someone may willingly join and stay subscribed to a monthly plan long-term. Price anchoring can be one tactic that can help here. Let’s say you want to sell a monthly subscription for $20 per month but it’s not selling very good. Try adding another option for your customers to buy the software with a one-time fee. By giving them both of these choices side-by-side, you can actually make an option look more appealing than it would by itself. Setting a one-time price tag of $1,000 or $2,000 on a product would certainly make that $20 per month option seem a lot cheaper.
Even if you can develop the perfect software to solve major problems for your customers, you can still struggle to make money if you don’t have access to a large audience of potential customers. Do not solely focus on the software development. You must consider how you will get leads and sales and plan for this accordingly.
This is one reason why WordPress is such a great option. It’s possible to attract 100% of your customer leads by simply releasing free plugins or themes, although it can take time before your free software is popular enough to bring in a lot of leads.
Another option that can deliver huge sales numbers without a lot of work on your part is to utilize affiliate marketing. By letting other marketers sell your product for a cut of the revenue, you can have hundreds or even thousands of sales in a single week or less. This was one of the main strategies I used to sell my plugins. I’m a top 10% Vendor and Affiliate on the JVZoo network, although I’ve been doing business there since the first year they opened. Don’t just publish a product and expect affiliates though. You will need to network with other vendors and affiliates to get powerful promoters to back your releases.