How to Choose a Software Development Agency: The Complete Checklist (2025)
Choosing the wrong development agency costs €50,000-€200,000+ in wasted budget and 6-12 months of lost time. Use this battle-tested checklist to evaluate agencies, avoid red flags, and find a partner who will actually deliver.
Why Getting This Decision Right Matters
Hiring a software development agency is one of the highest-stakes decisions a business can make. Get it right, and you have a technology partner who helps you build competitive advantage. Get it wrong, and you're looking at:
The Real Cost of Choosing Wrong
- €50,000-€200,000+ in wasted development costs
- 6-12 months of lost time-to-market
- Competitor advantage while you're stuck fixing problems
- Technical debt that haunts future development
- Team burnout from managing a dysfunctional relationship
- Reputation damage if you launch a buggy product
This guide gives you a systematic approach to evaluating agencies so you can make an informed decision—not just go with whoever has the best sales pitch.
The 10-Point Agency Evaluation Framework
1. Portfolio Deep Dive
Don't just look at pretty screenshots. Investigate their actual work:
Portfolio Checklist
- ✓ Do they have projects similar to yours (industry, complexity, tech stack)?
- ✓ Can you actually use/visit the products they built?
- ✓ Are the projects recent (last 2-3 years)?
- ✓ Did they build the entire product or just a small piece?
- ✓ Are the products still being maintained and updated?
- ✓ Can they explain their specific contribution vs. the client's team?
Red flag: Portfolio full of "concepts" or projects that no longer exist. Ask why.
2. Reference Verification
Always talk to past clients. Not just the ones they suggest—find others through LinkedIn or the projects themselves.
Questions for References
- • Did the project come in on time and budget? If not, why?
- • How did they handle problems and disagreements?
- • Were there any surprises after launch?
- • Would you hire them again? Why or why not?
- • How was communication throughout the project?
- • Did you feel like a priority or an afterthought?
Red flag: They can't provide references, or references are vague or hesitant.
3. Technical Assessment
You need to verify they actually have the technical capabilities they claim:
| Area | What to Ask | Red Flags |
|---|---|---|
| Tech stack | Why do you recommend X technology? | "We only work with Y" |
| Architecture | How would you structure this system? | Vague answers, buzzword soup |
| Testing | What's your testing approach? | "We test manually at the end" |
| Security | How do you handle security? | "We add security later" |
| DevOps | Describe your deployment process | Manual deployments, no CI/CD |
Pro tip: If you're non-technical, bring a technical advisor to at least one meeting. The €500-€1,000 for a few hours of consulting can save you €100,000+ in bad decisions.
4. Team Structure and Stability
Who will actually work on your project? This matters more than the company name on the proposal.
Team Questions
- ✓ Who specifically will work on my project?
- ✓ What's their experience level and background?
- ✓ Will the same people stay for the project duration?
- ✓ How do you handle team member turnover?
- ✓ Do you use subcontractors? From where?
- ✓ What's your employee retention rate?
Red flag: They can't tell you who will work on your project, or the team changes between the sales process and project kickoff.
5. Communication and Process
Poor communication is the #1 cause of project failures. Evaluate their process:
- Update frequency: How often will you hear from them? Weekly is minimum.
- Tools: What project management and communication tools do they use?
- Timezone overlap: Do working hours align? At least 4 hours overlap is essential.
- Point of contact: Who is your main contact and what's their role?
- Escalation path: What happens when there's a disagreement?
Red flag: They're vague about process or say they'll "figure it out as we go."
6. Pricing Model and Contract Terms
Understand exactly what you're paying for:
Fixed Price
- Pro: Budget certainty
- Con: Scope must be crystal clear
- Risk: Quality cuts to hit price
- Best for: Well-defined, smaller projects
Time & Materials
- Pro: Flexibility to adjust
- Con: Less budget predictability
- Risk: Scope creep without controls
- Best for: Complex, evolving projects
Contract Red Flags
- • No clear IP ownership clause (you must own the code)
- • No warranty period after delivery
- • Excessive upfront payment (more than 30%)
- • No clear termination clause
- • Hidden fees for "standard" things like deployment
7. Discovery and Planning Approach
How they start the project tells you how they'll run it:
- Good: Dedicated discovery phase with deliverables before development
- Good: Questions about your business, users, and goals—not just features
- Good: Clear documentation of requirements before coding starts
- Bad: Jump straight into development without planning
- Bad: "We'll figure it out as we go"
8. Quality Assurance Process
Ask specifically about their QA approach:
- Do they write automated tests? What kind (unit, integration, E2E)?
- Is there dedicated QA staff or do developers test their own work?
- How do they handle bugs found after delivery?
- What's their code review process?
Red flag: "Our developers are very good, so we don't need much testing."
9. Post-Launch Support
The relationship doesn't end at launch:
- What's included in the warranty period?
- What are ongoing maintenance costs?
- How quickly do they respond to critical bugs?
- What happens if you need to scale the team up or down?
10. Cultural Fit
You'll work with these people for months. Evaluate the relationship:
- Do they listen and ask clarifying questions?
- Do they push back constructively when you have bad ideas?
- Are they honest about limitations and risks?
- Do they communicate proactively or only when asked?
Agency Evaluation Scorecard
Rate each agency on these criteria (1-5 scale):
| Criteria | Weight | Agency A | Agency B | Agency C |
|---|---|---|---|---|
| Relevant portfolio | High | __/5 | __/5 | __/5 |
| Reference quality | High | __/5 | __/5 | __/5 |
| Technical capability | High | __/5 | __/5 | __/5 |
| Team stability | Medium | __/5 | __/5 | __/5 |
| Communication | High | __/5 | __/5 | __/5 |
| Contract terms | Medium | __/5 | __/5 | __/5 |
| QA process | High | __/5 | __/5 | __/5 |
| Cultural fit | Medium | __/5 | __/5 | __/5 |
| Price/value | Medium | __/5 | __/5 | __/5 |
The Cheapest Option Is Rarely the Best Option
A common mistake is choosing the lowest bidder. Here's the reality:
True Cost Comparison Example
Agency A (cheap): €30,000 quote → €60,000 actual cost after delays, bug fixes, and partial rebuild
Agency B (mid-range): €50,000 quote → €55,000 actual cost, delivered on time with minor iterations
Agency C (premium): €80,000 quote → €80,000 actual cost, delivered early with excellent quality
The "cheap" option cost more than the "expensive" one—and took twice as long.
Final Decision Checklist
Before signing, confirm:
- ☐ You've talked to at least 3 agencies
- ☐ You've verified at least 2 references per finalist
- ☐ You understand exactly who will work on your project
- ☐ Contract includes clear IP ownership, warranty, and termination clauses
- ☐ You have a technical advisor's opinion (if non-technical)
- ☐ Communication style and response times meet your expectations
- ☐ They've asked good questions about your business, not just features
- ☐ You trust them to tell you when something is a bad idea
Need Help Evaluating Options?
We offer free consultations to help you understand your project requirements and evaluate potential partners—even if you don't end up working with us. Honest advice, no pressure.
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