How to Evaluate a Software Development Company: 15 Questions Before You Sign

How to Evaluate a Software Development Company: 15 Questions Before You Sign

Most due diligence on software companies happens in the wrong order. Businesses evaluate the proposal, compare the price, like the sales presentation, and sign the contract. Then they discover the information they needed was available before signing and was either never asked for or not given.

These 15 questions are designed for the evaluation stage, before the contract, when you can still walk away.

Legal and Corporate Questions

1. What is your company registration number and where are you incorporated?

Any legitimate software company is incorporated and can provide their registration number. In Pakistan, companies register with the Securities and Exchange Commission of Pakistan (SECP). In the UK, with Companies House. In Australia, with ASIC. A company that cannot provide a registration number is not a registered company.

2. Can you provide your company registration documents?

Reputable companies provide these readily. A certificate of incorporation takes less than two minutes to produce. Reluctance to provide it is a clear signal.

3. Does your standard contract include IP assignment?

All code, designs, and work product created during the engagement should transfer to you on payment. This must be explicit in the contract. A contract without IP assignment leaves ownership ambiguous, which creates problems if you ever want to sell the business or if the relationship ends badly.

4. Does your contract include an NDA?

The company should agree not to disclose your business information, client data, or proprietary technology. This is standard and any company providing professional services should have standard NDA terms ready.

5. What are the contract terms for ending the engagement?

Notice periods, payment obligations at termination, deliverable handover requirements. Understanding these terms before signing is important. Contracts with no termination clause or extremely punitive termination terms are warning signs.

Portfolio and References

6. Can you show me working software you have built for clients similar to mine?

Portfolio case studies on a website are not the same as working software you can actually use. Ask for links to live products. Use them. Assess the quality of the experience.

7. Can you provide two client references I can contact directly, not via a referral link?

References provided by the company and references you find independently are different things. Ask for client references and then contact them independently: find the person on LinkedIn or their company website and reach out separately from any introduction the software company provides.

8. How long has your oldest client relationship been active?

Longevity in client relationships indicates reliable delivery. A company whose oldest client has been with them for three years is more likely to be reliable than one where all clients are in their first six months.

9. Can you describe a project that did not go as planned and what happened?

Every software company has had a project go wrong. Companies that can describe this clearly and take ownership of their role are more trustworthy than companies that claim perfect delivery records. Perfect records mean either dishonesty or very short history.

Team Questions

10. Who specifically will work on my project, and can I meet them before signing?

A company that cannot name the specific developers assigned to your project before you sign is selling capacity that has not been allocated. This typically means your project is staffed from a rotating pool based on whoever is available, not from a dedicated team with relevant experience.

11. What is the team's experience with my specific technology stack?

Not general claims about "full-stack expertise" but specific projects using the same technologies your project requires. Ask for examples.

12. What happens if a key team member leaves mid-project?

A company-to-company contract should have provisions for continuity: the company is responsible for maintaining the engagement with appropriately skilled resources regardless of individual staff changes. A company with no answer to this question is passing that risk to you.

Process Questions

13. Can you describe your development process from brief to delivery?

Ask about: how they handle requirements gathering, how they manage changes to scope, what their code review process looks like, how they communicate progress, and what their testing process involves. Specific answers indicate a genuine process. Vague answers indicate improvisation.

14. How do you handle scope changes and what is the cost?

Scope changes are inevitable in software development. The question is whether the company has a transparent change order process (written request, revised estimate, client approval before work begins) or whether scope creep is absorbed into the project without process and repriced opportunistically.

15. What does your quality control process look like?

Specifically: who reviews code before it goes to staging, who tests before production deployment, and what does the sign-off process look like before a release. The answer should describe real people doing real steps, not a general statement about caring about quality.

Red Flags Summary

Walk away from any company that:

• Cannot provide company registration details
• Will not provide client references you can contact independently
• Has a portfolio of case studies without links to working products
• Cannot name the specific developers who will work on your project
• Has contracts without IP assignment or NDA clauses
• Cannot explain their change order process clearly
• Quotes dramatically below market (under $1,500/month for claimed senior development)

Move forward cautiously with any company that:

• Provides all the above with one or two minor gaps they explain convincingly
• Has limited portfolio history but strong references
• Is newer but can demonstrate the team's individual track record

The due diligence process should take 5 to 10 business days. Rushing it to start development faster is the most common reason businesses end up in failed engagements that cost more than the due diligence would have.

For a direct conversation about how Codalyst Tech answers these questions, contact us. We provide company registration details, direct client references, and named developers for every engagement before the contract is signed.