Developing and selling software...

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Project X

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Hi everyone.
Im looking for advice on the following.

OK If I were to open an online software development store where, i develop and sell my software.since i will outsource the software development part so i will have to pay the freelance developer in full and sell the soft to make the money back.

1. After how long should I estimate to get back the money i spent? I know it will depend on how much i spent but on average how long.

2. If it takes me 1 year to get the money I spent (from my own pocket), does that mean I wont make any profit until I have made the money back?

3. Being that im selling software and it it is a "buy once sell forever" type of product. How do i determine how much of the product i should , at least, sell every month. I know this will be determined by how much I have to spend every month like rent, hosting etc. But after all of that has been covered how much do I add in order to get back the money I spent to develop the software, assuming the cost it to much to be made in the first month?

4. How mcuh of the profit should i put back into the marketing?

5. Do i market the site or the product im selling.
 
Wow, that's quite a complex question for a forum thread - usually you'd approach accountants for this sort of advice, who would run through the ballpark numbers that you're expecting and create a budget/management accounts accordingly.

Regarding the marketing, I would imagine that if you're planning on selling multiple products, you would advertise the site/company... as opposed to one product where the product would be more of the focus.

Disclaimer: this advice is a result of a 6-month branding course at UCT and nothing else

Not sure that you'll get too much assistance being that vague, but good luck never-the-less!
 
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ok thanks man. Do you perhaps know any other forum, a business forum to be exact, where i can try my luck?
 
Dude, that is a crazy question, hahaha.

From what I've seen...depending on the type/application of the software, it requires reps who can sell and demo! Also, the whole idea of developing a product THEN trying to sell it is very very risky, and people often come short. Development costs soar and take way more time than initially expected...especially if its a one-man-band developer. Its prob better to get an indian dev house to do it for dirt cheap (I know I'll get flamed for that comment). But anyway, its way better to make sure proper market research has been done and you pretty much have some clients ready in the pipeline, and rather have the clients buy in early perhaps and fund development or something.
I've seen guys blow R1mil+ on what is really a good product development...but they can't sell it afterwards. Now what?! The dudes over 50, blown all his bucks...he's screwed.
Also a website is not enough imo. Your software better be damn good bud.

Those are my concerns...
 
Project X said:
Hi everyone.
Im looking for advice on the following.

OK If I were to open an online software development store where, i develop and sell my software.since i will outsource the software development part so i will have to pay the freelance developer in full and sell the soft to make the money back.

1. After how long should I estimate to get back the money i spent? I know it will depend on how much i spent but on average how long.

2. If it takes me 1 year to get the money I spent (from my own pocket), does that mean I wont make any profit until I have made the money back?

3. Being that im selling software and it it is a "buy once sell forever" type of product. How do i determine how much of the product i should , at least, sell every month. I know this will be determined by how much I have to spend every month like rent, hosting etc. But after all of that has been covered how much do I add in order to get back the money I spent to develop the software, assuming the cost it to much to be made in the first month?

4. How mcuh of the profit should i put back into the marketing?

5. Do i market the site or the product im selling.
Click to expand...

This actually sounds like a ridiculous idea. The subject is very vague.

If 1 developer is going to make your software, it must be pretty straight forward.

After how long should you expect to get your money back? Well, do you know how much the developer will charge you to build the software? How much will he charge you to fix bugs and/or make changes to the software? You would need to establish this very early on. What kind of contract are you going to get into with the developer? Time? Fixed cost?

Next, how much are you going to sell the software for? A large part of the answer to this question depends on how much people are willing to pay for it. Do you even know who these people are? If you do, maybe you should ask them.

Once you know how much it will cost on an ongoing basis, and how much you will be able to sell it for, you will be able to calculate, roughly, how many sales you need to break even (excluding all your other costs!). How long it takes you to get those sales depends on how viable your product is and/or how good you can actually sell.

How much should you put back into marketing. *sigh* You need to establish the marketing requirements for your product, where you will market, how often etc to generate x amount of traffic to your site. When you look into this, you will be able to establish costs! And that is how much you put back into marketing your business.

Do you market the product or your website? You market both, clearly.

Also who is going to design this software and deliver a spec to the developer? Are you capable of that, or will you pay someone else to do it? WHo is going to test the software and assure its quality? (hint: not the developer). Are you going to do that or is someone else going to do that?


In honesty, it sounds like you dont have the slightest clue about what you are doing. Dont let that stop you I guess, but do some research outside of internet forums.
 
Have a look here: http://www.theinnovationhub.com/ they should be able to help you get the ball rolling.
But yes I'm a dev for a pretty big company, you gunna need:
dev's,
Issue managers/support engineers (to fix issues, help out clients with technical issues etc),
some sort of quality assurance (devs can make some silly mistakes and you gunna want your product to appear very polished)
sales staff and marketing
 
Dont forget project managers :) lawyers, bookkeepers, auditors, hr,

nakedpeanut said:
Have a look here: http://www.theinnovationhub.com/ they should be able to help you get the ball rolling.
But yes I'm a dev for a pretty big company, you gunna need:
dev's,
Issue managers/support engineers (to fix issues, help out clients with technical issues etc),
some sort of quality assurance (devs can make some silly mistakes and you gunna want your product to appear very polished)
sales staff and marketing
Click to expand...



Sent from my X10i using MyBroadband Android App
 
lol why are you guys making this seem more impossible then it already is?\
anyway thanks for the replies. will really help.
 
markface said:
Its prob better to get an indian dev house to do it for dirt cheap (I know I'll get flamed for that comment).
Click to expand...
That's fine, but you'd have to research it really carefully. When things go wrong are you prepared to fly back and forth to sort it out.

Project X said:
lol why are you guys making this seem more impossible then it already is?
Click to expand...
It's not impossible, but there is a lot to take into consideration. Much will depend on the complexity of your application. But engineering projects generally have a tendency to spiral out of control.
 
It is very hard to find local developers.. For example ipad and android developers are no where to be found. Do you guys know of any?
 
Hi!
You may always use e-commerce platforms specialized for software reselling. That way you will avoid all the hassle of selling and focus on finding devs and developing.
I use Plimus solution and sell online my niche apps. So far so good, I must add. There are other ones out there. just google "sell software online".
 
I would encourage you to look at the problem differently (as opposed to "how long until you get your money back).

First, get an idea of how much it will cost to develop the software. Then figure out how many people will be interested in the software and at what price they will buy it. Lastly, figure the operating costs of running the sales business. Obviously, marketing is a very important part of the cost basis. From this you should be able to get an idea of the value and return of the investment (look up Net Present Value and Internal Rate of Return).

As for whether to market the site or product: if you are offering only a couple of products then advertise the products. Otherwise, you should do a mix.
 
dkhaley said:
I would encourage you to look at the problem differently (as opposed to "how long until you get your money back).

First, get an idea of how much it will cost to develop the software. Then figure out how many people will be interested in the software and at what price they will buy it. Lastly, figure the operating costs of running the sales business. Obviously, marketing is a very important part of the cost basis. From this you should be able to get an idea of the value and return of the investment (look up Net Present Value and Internal Rate of Return).

As for whether to market the site or product: if you are offering only a couple of products then advertise the products. Otherwise, you should do a mix.
Click to expand...

I agree with dkhaley on all points, and I think it should also be noted that having someone do the development on a freelance basis sounds good on paper, but in practice there are foten communication/miscommunication issues that end up costing time. Have your devs work fulltime for you so that you idea gets translated correctly into an end product.
 
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