How to Hire a Software Development Agency: 10 Questions to Ask

How Do You Hire the Right Software Development Agency?

Hiring the right software development agency comes down to asking the right questions and knowing how to evaluate the answers. The best agencies will demonstrate deep technical expertise, transparent communication practices, a clear development process, and verifiable references from past clients. The wrong choice can cost you months of lost time and hundreds of thousands of dollars, so it pays to be thorough in your evaluation.

Here are the 10 questions every company should ask before signing a contract with a software development partner.

Question 1: Can You Walk Me Through a Recent Project Similar to Mine?

Why This Matters

Relevant experience is one of the strongest predictors of project success. An agency that has built something similar to what you need will anticipate challenges, know which architectural patterns work, and avoid costly mistakes that come from learning on the job.

What a Good Answer Looks Like

The agency should describe a specific project in detail — the client's problem, the technical approach, the challenges they encountered, and the outcome. They should be able to explain why they made specific technical decisions and what they would do differently if they started over.

Red Flags

• Vague descriptions without technical specifics
• Cannot name the client or provide a reference (even anonymized details should be specific)
• Only talks about the technology stack without addressing business outcomes
• Claims to have experience in everything but cannot go deep on anything

Question 2: Who Specifically Will Work on My Project?

Why This Matters

You are not hiring a company logo — you are hiring specific people. The quality of your project depends entirely on the skills and experience of the individuals assigned to it. Some agencies staff proposals with senior talent and then assign junior developers after the contract is signed.

What a Good Answer Looks Like

The agency should introduce (or at least describe) the specific team members who will work on your project, including their roles, experience levels, and relevant background. They should explain how they handle team changes if someone leaves during the project.

Red Flags

• Cannot tell you who will be on the team until after the contract is signed
• Team members have very little relevant experience
• High planned turnover ("we rotate developers every few months")
• No dedicated project manager or tech lead

Question 3: What Is Your Development Process?

Why This Matters

A well-defined development process reduces risk, improves communication, and makes project outcomes more predictable. You want to know how work gets planned, executed, reviewed, and delivered.

What a Good Answer Looks Like

The agency should describe their methodology (Agile, Scrum, Kanban) and explain the specific ceremonies and cadence: sprint planning, daily standups, sprint reviews, retrospectives. They should explain how they handle requirements gathering, technical design, code review, testing, and deployment.

Red Flags

• No defined process ("we are flexible and adapt to each client")
• Process that does not include regular client check-ins
• No mention of code review or testing practices
• No clear approach to requirements documentation

Question 4: How Do You Handle Communication and Reporting?

Why This Matters

Communication breakdowns are the number one cause of project failure. You need to know how you will stay informed about progress, blockers, and decisions throughout the project.

What a Good Answer Looks Like

The agency should specify:

• Communication channels (Slack, email, video calls)
• Reporting cadence (weekly status reports, sprint demos)
• Escalation procedures for urgent issues
• Time zone overlap and availability hours
• Who your primary point of contact will be

Good agencies proactively communicate — they do not wait for you to ask for updates.

Red Flags

• No regular reporting structure
• Communication only through a single project manager with no direct developer access
• Unclear response time expectations
• No time zone overlap for real-time communication

Question 5: How Do You Handle Scope Changes and Budget Overruns?

Why This Matters

Every software project encounters scope changes. How an agency handles these situations reveals their integrity and project management maturity.

What a Good Answer Looks Like

The agency should explain their change request process — how scope changes are evaluated, estimated, approved, and documented. They should be upfront about how changes impact timeline and budget. Good agencies flag potential budget overruns early and present options rather than surprising you with a bill.

Red Flags

• "We rarely have scope changes" (this is unrealistic)
• No formal change request process
• History of significant budget overruns (ask for references to verify)
• Unwilling to discuss budget transparency

Question 6: What Does Your QA and Testing Process Look Like?

Why This Matters

Code quality directly affects long-term maintenance costs, reliability, and your ability to iterate quickly. Poor testing practices create compounding technical debt.

What a Good Answer Looks Like

The agency should describe a multi-layered testing strategy:

• Unit tests covering business logic and critical functions
• Integration tests verifying that components work together
• End-to-end tests simulating real user workflows
• Code review as a standard practice for all code changes
• CI/CD pipeline that runs tests automatically on every commit
• Manual QA for user experience and edge cases

They should be able to share their typical test coverage targets and how they balance testing thoroughness with development speed.

Red Flags

• "Our developers test their own code" (no separate QA process)
• No automated testing
• No CI/CD pipeline
• Testing is treated as an afterthought or optional phase

Question 7: Who Owns the Code and Intellectual Property?

Why This Matters

You need clear, contractual ownership of all code, designs, and intellectual property created during the project. Ambiguity here can create serious legal and business problems down the road.

What a Good Answer Looks Like

The agency should confirm that you will own all custom code and IP created for your project upon payment. They should clearly distinguish between custom code (which you own) and any proprietary frameworks or libraries they bring to the project (which they may license to you). This should all be documented in the contract.

Red Flags

• Reluctance to transfer IP ownership
• Proprietary frameworks that lock you into their services
• No clear IP clause in the contract
• Using your project code in other client projects without permission

Question 8: What Happens After Launch?

Why This Matters

Software is never "done." After launch, you will need bug fixes, security updates, performance optimization, and new features. Understanding the agency's post-launch support model prevents you from being stranded with a product nobody can maintain.

What a Good Answer Looks Like

The agency should offer:

• A warranty period (typically 30–90 days) for post-launch bug fixes
• Ongoing maintenance and support plans with clear SLAs
• Documentation and knowledge transfer so your internal team or another vendor can take over if needed
• A transition plan if you decide to bring development in-house

Red Flags

• No post-launch support options
• No documentation or knowledge transfer process
• Codebase that only their team can maintain (vendor lock-in)
• Unwilling to discuss transition scenarios

Question 9: Can You Provide References From Past Clients?

Why This Matters

References are the most reliable way to verify an agency's claims. Speaking directly with past clients reveals the real experience of working with the agency — the good and the bad.

What a Good Answer Looks Like

The agency should readily provide 2–3 references from relevant projects. When you contact references, ask about:

• Did the project deliver on time and on budget?
• How was communication throughout the project?
• How did the agency handle unexpected challenges?
• Would you hire them again? Why or why not?

Red Flags

• Cannot or will not provide references
• References are only from very small or very old projects
• References are personal contacts rather than professional clients
• References seem coached or provide only generic praise

Question 10: What Could Go Wrong With This Project and How Would You Handle It?

Why This Matters

This question reveals the agency's experience, honesty, and risk management maturity. Experienced agencies know that things go wrong on every project — they should be able to identify specific risks and explain their mitigation strategies.

What a Good Answer Looks Like

The agency should identify realistic risks specific to your project:

• Technical risks (integrations that may be complex, performance challenges)
• Resource risks (key team member availability, skill gaps)
• Timeline risks (dependencies on third parties, regulatory approvals)
• Scope risks (requirements that are likely to evolve)

For each risk, they should explain how they would mitigate it and what their contingency plan is.

Red Flags

• "Nothing will go wrong — we have done this before"
• Cannot identify any specific risks (lack of experience or honesty)
• Identifies risks but has no mitigation strategies
• Dismisses your concerns about specific risks

Additional Evaluation Criteria

Beyond these 10 questions, evaluate agencies on:

Portfolio and Case Studies

Look for case studies that describe real business outcomes, not just screenshots. Good case studies explain the problem, the approach, the challenges, and the measurable results. See examples in our Pocket CFO and SocialChamp case studies.

Contract Terms

Have a lawyer review the contract before signing. Pay attention to:

• IP ownership clauses
• Termination terms and notice periods
• Payment schedules and milestones
• Liability and warranty provisions
• Non-disclosure and confidentiality terms

Cultural Fit

You will be working closely with this team for months. Consider whether their communication style, work ethic, and values align with your organization. A technically excellent agency that does not mesh with your team culture will create friction that degrades the project.

What Code19 Recommends

At Code19, we welcome these questions — they are exactly the right ones to ask. We provide transparent answers, introduce you to the specific team members who will work on your project, and share detailed references from clients in similar industries. Our contracts are straightforward with clear IP ownership and post-launch support terms.

If you are evaluating agencies for your next project, we would be happy to walk through each of these questions in detail. For a deeper framework on selecting the right partner, read our guide on how to choose the right software development partner. Reach out for a free consultation and we will show you exactly how we work.