How much for my code?
I have spent about 6 years perfecting the workflows and development of something. My tools and frameworks are quite small, about 3000 lines of code in total. But there is a lot of planning and optimization going into these tools. A fairly small US based company with about 8 employees reached out to me and asked if I could: A) Do consultation to help them scale their production to the next level. B) Sell my tools and frameworks to them. I am currently freelancing with rates around $80 - $100 per hour (I am in Europe so the rates are high). I’m trying to figure out how much I should sell these tools for. I feel okay with selling it for the development time it would take me to build the tools today: about 86 hours to rebuild it all with the knowledge I have today. If I charge $80/h that would be $6880 one time fee. I have myself profited a lot already from these tools because they helped me to save time in freelance work. What do you guys think?
By sale, you mean license, right?
I will encourage you to think from what value does the tool bring it to the company rather than how much effort you have put in building these tools. How much the company can afford to pay you? Also, keep in mind - what kind of support would they need after wards? You may include that in your quote or explicitly call that I will support it for X hours/Y days. Are you also selling them the rights to redistribute these tools? Another point to consider- when you sell it to them offer them other tools that can help them improve their productivity.
I’d say I could make their production about 15-25% more time effective and overall raise the quality of their production.
Price not on the hours put in, but by the value the tool provides. Can your tools be implemented to run as a service? Can you charge a somewhat low but recurring fee for continued access and support of said service? Can you do so with multiple clients simultaneously without scaling your overhead linearly? SaaS companies practically print money.
Think of the tools as a set of automations for processing images (in a bit unique way). And the second part of the tool is just a JavaScript library / framework. I doubt I can have it as a service. The library needs to be on their server (can’t be cross domain).
I could definitely sell this to multiple companies.
A license so that they can use it in their everyday work. I was at first thinking to share the entire source code but now I realize that binaries / minified will be smarter. As someone mentioned above, that way I get to support them x hours. I don’t think they will need much support but I would expect 4-8 hours per month. I don’t want them to redistribute the code AT ALL but they work with a large fleet of freelancers that would all need access to these binary / minified files. There is a list of 5 tools and all kind of complement each other but are independent.
Charge per user per month for access, and build your tools in such a way that they are either centrally hosted or require cryptographically-signed license files to operate. Have price-per-tool and a higher package price that is low enough that anyone in their right mind would pick it instead of paying for individual tools.
For 1 of the tools I think I can do that! I actually might turn this into a product... For 4 of the tools, the script files can’t be loaded cross-domain. They need to have the files on their server for it to work.
Is there any way to check how much revenue a company has per year in US?
Publicly-traded companies are required to report this quarterly. Privately-held companies are not.
It’s private but according to Crunchbase their annual revenue is $8.1M
Set up a license check with an expiration date lockout, bill on a recurring cycle. The single time purchase price should be barely less than however much it would cost them to build it on their own, plus however much they value not having the hassle of another project. Estimate single time purchase worth based on what you know of their skill level with respect to your project, strength of learning culture, and personnel cost. For how to spread this across repeating payments, look up math around the word "annuity" and then weigh in switching costs away from your project. Better yet, find a freelancer with experience in pricing to do this for you the right way. Then also make a small ad budget, and start slowly growing your sales beyond the one company until it's justified to pay a marketer to push this
You need to add a ‘Value layer’ on top of your code. No need to sell the code directly. Build it into a tool that’s easy to use and deploy and license the usage of the tool with a price structure based around the use and length of use. The more value you add on top of your code, the higher you can sell it for
Dm me.
I worked for a company that and we asked this question from the other side: how much would it cost us to build it? Let's say 3 engineers for 1 year. So we were willing to to buy it ) for 3 * eng salary. But I do agree with others that you should do a subscription model . I'm not sure about that
Are you selling the code and all rights to its use? If so, I'd recommend that you change the contract. Better to sell binaries and non exclusive licenses. That way you can profit further.
Thanks! I’ll go with a license and binary/ minified files!