WE'VE MOVED!
We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
ownership question
Chet
subscriber Posts: 2
I`ve got a few product ideas for a small niche market b2b software company. I have a non-existant software product that I want to launch the company with and to save myself the development costs involved, I want to give up some percentage of the product`s net sales to the software developer. I`ve got freinds interested with the software programming skills required, so that isn`t the problem.
As I see it, I have marketing, sales, ongoing support, and other business expenses that need to be figured into the costs. My question is, what is the correct % of profit to give up? I want to compensate fairly, but don`t want to give up more that I should. If I flat out hired someone to build this, I would guess it around 15 to 30K.
I don`t know what the ROI is yet, but obviously feel that it could be quite lucrative. chet2006-9-8 0:28:36
As I see it, I have marketing, sales, ongoing support, and other business expenses that need to be figured into the costs. My question is, what is the correct % of profit to give up? I want to compensate fairly, but don`t want to give up more that I should. If I flat out hired someone to build this, I would guess it around 15 to 30K.
I don`t know what the ROI is yet, but obviously feel that it could be quite lucrative. chet2006-9-8 0:28:36
Sign In or Register to comment.
Comments
I`m not sure if there`s a specific percentage that would be best. It seems to me that were you to go the profit route it would be best to offer a software developer the market rate of their work (15 - 30k like you said) + an incentive for taking risk on your behalf. The amount that risk is worth depends a lot on how risky the software developer percieves the project to be and how risk adverse of a person they are.
I hope that helps some.
Andrew
I`m really having trouble creating a fair and equitable partnership that would work for the both of us. Plus, I want an escape clause, if things don`t work out between us or I if I decide to go with another development partner from the start instead of my friend, I need to setup the arrangement the same given either scenario.