How much $$$

I have been helping a high school friend of mine develop a small application to automate a business process. I really didn't think this was going to go anywhere and now the company wants to buy the project from me? Whats the best way to determine the price for something like that. I have never sold any software I have developed before. I used VS 2005, am I able to sell it? I have been tracking my time and have spent about 30 hours on it. I would normally just charge my hourly rate but they want the source code.

Thanks in advance.

Rob

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Originally Posted by rfiddelke

I have been helping a high school friend of mine develop a small application to automate a business process. I really didn't think this was going to go anywhere and now the company wants to buy the project from me? Whats the best way to determine the price for something like that. I have never sold any software I have developed before. I used VS 2005, am I able to sell it? I have been tracking my time and have spent about 30 hours on it. I would normally just charge my hourly rate but they want the source code.

Thanks in advance.

Rob

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Yes you can sell it. If you think you have something really valuable, then you might want to get some advice from a lawyer... but I bet this isn't that sort of thing. Ask for what you think is reasonable, or ask them to make an offer. And go ahead and sell them the source code. As long as you get an amount you think is fair, that is all that matters.

An average hourly rate for a contractor would be about $60 an hour, give or take. So calculate that and add an additional amount for the purchasing of the source code. Is this something specific to tht companies operations or something that could be used by allot of other companies?

Robodog has highlighted the correct method, although I think $60 is probably a bit steep. I would be tempted to say 40-50$. That being said, you have to take into account how much the code is 'worth' to the company involved.

You should do a cost analysis of how much the application will save/make the company and then assess what percentage of that value you think you can take away from them.

For instance, if it will make the company $500 and save them $400 that is a total of $900 - in this instance you will see that a straight cost of $60/hour is not an acceptable charge, and indeed you will have to bring the proce down - but a small percentage of $900 is a lot better than asking too much and getting nothing.

Hope this helps.

Well maybe a bit much if you think of it from the students perspective but not if you think about how much they would pay a professional consultant/programmer. It was just a ballpark amount to consider but really research how much it would cost them to have it done by someone else. :)

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Originally Posted by RobDog888

Well maybe a bit much if you think of it from the students perspective but not if you think about how much they would pay a professional consultant/programmer. It was just a ballpark amount to consider but really research how much it would cost them to have it done by someone else. :)

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Geez i charge $75 just to call me on the phone ... and thats not even programming related .... :bigyello: I'm not getting out my bed for less than $75 /// !

Do they want the source code for "safe keeping" or so they can sell it themselves - that makes a huge difference.

If they want it for "safe keeping" then you really cannot charge for the source code as if they were going to sell it themselves.

Many of my customers expect me to give them source code on a CD to be placed in a vault in there offices - we make sure the contract is written in a way to protect that source from ever being used.

Hourly rates are tough to nail down. We treat our consulting time like a lawyer or architect does theres. We charge $200 an hour at this time - but we also do many hours of non-billable work. You cannot always pass all charges off to the customer.

Since you wrote it for "free" and spent 30 hours doing it and now they want to buy it - it sounds like they want to be able to continue development without you... That means they are buying your proprietary rights to what you developed. The hours you spent really have nothing to do with what to charge for it - it's more or less what you will lose when you give up that equity. Would they have continued to use you to develop the project? That is a loss. Would you have been able to sell the project elsewhere? That is a loss (if you are restricted from selling it yourself).

I'm at the final stages of a development project that I've been working on for about a year and a half. The major difference between this project and others that I've worked on is that the client wants the source code.

Thier desire is not to sell it, but, rather maintain and upgrade it without having to contract with my company for additional programming manhours.

I do not know the exact details of the contract worked out between my company and my client, but, the factors szlamany mentioned were taken into consideration (what monies may be lost to us if they no longer need us for maintainance/upgrades/etc.)

I also don't know what my company is charging them for the source code, but my boss once told me that he would love to have in his pocket what they are paying. ;)