Thread: Selling Software

Originally Posted by C_ntua

I would like to hear some price ranges for selling software. Obviously the answer would be "depends from the software". Lets say a simple GUI. Something you would need 1-3 weeks to make, depending on your skills.

It will still depend. Is it a software you can distribute to the public in general, or something that can only benefit the person/company that asked you to develop it?

If it's public, a software that took you only 1-3 weeks to develop should be simple enough for the thought alone of asking for money to be offensive. Unless you came up with something really new and magic.

If not public, you can charge pretty much about anything that comes to mind depending on your customer. I use a simple rule of thumb for the more modest projects/customers:
I may charge 2-4k Euros for a a software that takes 4 weeks to develop and will not give me time to do anything else. I base this on my country expected developer salary. In your country you should rate this on the usual salary of a software developer working for an average company. I will charge 1.5x to 2x that if the source code is supposed to go with it.

But then it will also depend on exactly what they will be asking of you. The proposal I'm currently working on involves a Manual Data Entry/Reporting application supposed to implement Rapid Data Entry techniques and meant to interface with Oracle's Siebel CRM. Although I'm expecting 2 month development time, I'm charging 25k Euros, including 1 year full support.

Downpayment
- Always require 30-40% of the total cost ahead of the project. You must protect yourself and force your customer (no matter how reliable they are) to commit to your work. Even then I had my share in the past of projects where I never saw the remaining 60% because meanwhile the customer changed their mind. It should happen to you eventually.

- Require the downpayment even if the project involves a signed contract. Some customers may claim the contract should be enough to secure you will get your money, but the reality is that if they breach the contract you don't have the financial means to take them to court.

- Let me make this perfectly clear: Even if it is your mother!

Delivery
- Do not install the application or provide setup files until you get your money.

- My usual method is, when I'm done, I schedule a presentation of the software taking my laptop with me. I run the presentation on debug mode(*) because the most rare bugs are sentient beings, despite what you may think you know about computers being just machines, and these bugs know when you are showing the application to your customers. In debug mode you will be able to take notes for later fixing. With the presentation finished I deliver the invoice and schedule with them the installation or setup file(s) delivery for immediately *after the payment*. Do not concede.

- You may not be able to produce invoices yet depending on how you are set, but I'm sure your country too has other means for you to render a legal bill, regardless of your status.

More on prices
- Never discuss prices with VAT included. Never say "VAT is already included". You discuss prices in the following terms "this will cost you X plus VAT". This is important to you. Any VAT you receive you will have to give back, so even if you know perfectly well the price before VAT, you will want to keep X very visible, because chances are your customer may want to negotiate and you don't want to be making mental calculations on VAT.

Honesty and Integrity
- Want to make a living of this? Want to get a name? Want for people to reference your work to others and thus increase yoour potential customers?

- Then be honest about everything you do on this business, even including not overcharging your customers based on their ignorance of the work involved with their project. People are not stupid. Well, there are stupid people. But rarely stupid people get to own a company or be in position to decide purchases on their company behalf. If you fool them, they will eventually know and you lost a customer from that moment on, plus any references they could give of your work. I suppose I don't need to tell you all this. Don't mean to preach. Just... you know. It doesn't hurt saying. Only hearing.

- Do not promise what you cannot give. That's obvious. But gamble. Business involves risks. And these are not financial risks only. Unless you are pretty sure it is outside your abilities, give it a shot. But make your customer aware of your doubts ahead. Rarely this will mean you get the project, but you got your customer trust. Much more valuable down the line.

...

Can't think of anything much else to say right now. Others may have more, or may want to critic some of my arguments. I've had a very long hiatus on this business (around 5 years). Only recently, about 8 months ago, I've resumed my activity as a software provider with a few friends. We are setting a startup over here and are already in business despite even the company registration process not being finished. That's how much desperate companies are for fair prices and honest with quality activity.


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(*) Depending on what you are doing with the code, you may want instead to run the application in release mode with debug symbols. I prefer debug mode for most cases because it's simpler. But release mode may reveal new bugs if the execution path is changed between modes, you make use of language features that behave differently depending on the mode, or (don't ever forget) if you are using third-party components.