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Ask HN: How much should I charge for a customized program I already wrote?

8 points by eatporktoo ↗ HN
I was contacted by a business owner who wants a customized version of my software for his business. The changes are not very major and will take approximately two weeks. This would be something I would do in addition to my day job.

His company has 22 retail locations. I have just never sold my software before so I don't know how to price it. I was told something like $5000 would be reasonable but I wanted to know what HN thought.

(It is a desktop application)

15 comments

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noonespecial
Remember, how easy it is for you to do it has absolutely nothing to do with what you should charge. How much value it brings to your customer (and how easily that customer could buy that value elsewhere) should determine your price.

If he's going to make a million dollars with it and his only other choice was a $350k corporate license from Oracle, I'd say $300k sounds about right.

eatporktoo
That's a good point. Well there are a couple programs that do what mine does, but it is not something that he would use to make money. He wants the program customized so that his employees can't use it without knowing a password.
xuki
It's less about how much it costs you to make the change, it's the benefit the user is gonna get via buying your software. Do a little more research on how much it would cost him if he goes to an alternative and decide from there.
noonespecial
If all of the employees at 22 locations save 5 minutes a day on password entry that's really not required from a security standpoint (not to mention training time for new employees) then your customer will use your program to make a substantial amount of money.
iKnowKungFoo
You might want to ask this question on http://programmers.stackexchange.com/, then link to the question on HN. I think you'd get more replies there.

$5k might be fair, who knows? $5k total? per store? Does that include future installs?

Are you selling the source code too or just the compiled application?

If you're not selling the source code, are you going to license the software to him based on the number of installations or just give it to him for a specific price? You could sell it on a sliding scale based on the number of installations. If he has 22 locations and 5 installs per store, then have pricing for single installs and discount for a pack of 5 licenses.

You shouldn't give it away cheap just because it "wouldn't be too much trouble". Take into account the impact on business. How much time & money will your software save them? Remember time _is_ money.

Good luck.

noonespecial
Also don't forget to consider the time you will spend supporting it once its installed and put that into the contract. I'm here to tell you, if its not in there very clearly, your customer will forcefully assume free support forever.
eatporktoo
Thanks for this tip, I put in the contract that I will provide one year of bugfixes/support for the program.
eatporktoo
5k would get him the installer. Anyone could install the program, it doesn't need a server or anything.

He isn't getting the source code, just the executable. I also don't want to have to deal with licensing since that could complicate everything.

I really don't think it will save them much money, just aggravation. That's why I am having trouble pricing it. It is difficult to put a price on aggravation...

timjahn
I think aggravation is a great problem to solve and there's definitely value in that. Ultimately, it's a matter of how much the customer values your product and how well it solves their problem.

If your customer is aggravated because a certain process takes forever to complete, and your product cuts that time in half, allowing the customer to concentrate on other money making parts of their business...then there is definitely a price on aggravation.

kls
The two factors I see is, can you use the changes as a feature to other customers. If so, I personally would consider doing it at a discounted rate. If it is a total one off then I personally would charge time and materials at the prevailing rate for a freelancer. If he wants a lump sum amount well then you need to master the art of figuring out the maximum amount you can charge for something.
bmelton
Agreed -- is this something that would benefit from writing LDAP/AD integration for? If so, how much does that boost the sale price to all the other potential customers you could get from it. Do his requirements actually fit in line with the general 'enterprization' of the software? Is writing him a one-off, multi-user/single-password authentication scheme help or hinder that enterprization?

Price accordingly.

eatporktoo
Unfortunately I don't think this is something that other people would really need. I failed to mention that this is a program that I offer for free currently, so I don't really have plans to sell this to anyone else.

I am working on the maximum amount idea... Assuming it takes me a while to test it, it should only take about a week of my evenings to get the changes he wants completed and tested to my liking.

pasbesoin
My comments are based on no particular expertise in this area. But, for what they are or are not worth:

How much time, effort, and expense went into developing your skills?

If it's per location, as he expands, so does your business. (And, described well, it can be present as a "win-win" business relationship. You're "invested" in his success. Though I don't mean giving him a break in return for anticipated future volume.)

P.S. I'm talking up front costs. No claw backs of those if/when locations close. Also, would a site license be transferable? That might depend on whether moving it requires your support.

noonespecial mentions support. I'll add liability (and limiting same). Make sure you define the terms.

I saw mention of LDAP or whatever. Sell him what he wants, in a timely fashion, now. Such things, if desired, can be future upgrades -- for a price. Even if you initiate: "You know, I'm continuing to work on the produce. Would you be interested in having this (let me show you how useful it is) feature?"

You may end up giving him breaks, and/or just being a decent business person. Just make sure those actions are on your terms and not coerced. You don't have to be a greedy bastard to want to maintain control over the situation.

petervandijck
Charge 499 per location, and $99.99 per location per month if they want support/upgrades (limit the amount of support hrs). 22499=11K, plus 99.9912*22 = 26K per year extra.

Do you have a sense of what they're currently paying/what the competition charges?