Guidance on toolbar support package needed

Hi.

I have been invited to develop, maintain and support an IE toolbar for a very large corporation. I have already provided a free basic toolbar that has been in trial for the last couple weeks. During this time, I have offered to make minor changes and updates until a deal is made. They like the toolbar, and are now requesting a quote for a support and maintenance package agreement for 1 year.

Now, I have been an established web developer for 5+ years... but this is my first IE Toolbar deal, and also a first time working working with such a big corporation.

I could really use some ideas on how to structure this package. I need to make sure that it is fair on both ends, and that it covers everything that might happen during the year.

There are going to be anywhere from hundreds to thousands of employees using this toolbar. So I will need to maintain the toolbar to keep it updated and in working order. I wll also need to provide support when needed. Then, I need to set a rate for anything over that.

I dont have much time to provide the quote, so if anyone could help me out, I would greatly appreciate it.

Thank you in advance!

I would do it like this:

Cost of materials (wear and tear on computer equipment)
+ Hours spend on development (x rate)
+ calulated hours on update each month (x12(one year)x update rate)
+ calculated hours on support each month (x12(one year) xupdate rate)
= cost of product

then you need to put in the money your are actually going to make on it. the over is only the cost,, so put on maybe 22% or more which is what your are going to make on the product. You know your "baby" so you know what's it worth.

Also make sure that you either make them pay for x hours every week as support for the whole year OR make a deal that you will support them per hour and charge them as such. You could also make it say that pure programming faults is free BUT everything else they would pay $$$ for each started hour on helping them out.

Also be careful with the written contract, have a laywer look over it if you are not sure what you are signing. Its really important that you dont end up giving support for free because om something in the contract!! (many companies goes bankrupt because of their support).

Try speaking with the company and try to find out their budgets for this project.

Again its your "baby" so you should know what the its worth. Just be careful with the contracts. And GET a contract!!

Good luck I hope you will earn money!! Dont forget to support the devshed community when your big paycheck is comming :-]

Kenped

Thanks for your input!

I have had a very diffucult time doing this, and Im still not set on what I should do.

Im not sure how to calculate the hourly rates... and to make it worse, Im not sure about charging them, say, 20 hours a month for 1 year + anything over at a flat rate.

I just dont know about that. Its like asking them to pay for time that they "might" use.

If you have any more input, shoot it my way!

Thanks again

-identify the number of changes that you will accept to do, that you will be billing for on the contract. By the hour? By the request?

You don't want to be fussing with implementation issues that are not your core business. Call this "User Issues" Specify this into the contract, so WHEN then argue about it later, you can point to their signed name.

-consider your unbillable hours

you generally can only bill 75% of your time used. So go ahead and up the hourly price when calculating the project size, then multiply by 75%. If you're then happy with these "real" hourly wages, which hopefully cover costs plus profit etc, then you'll be okay.

The idea here is that you probably have to do some preparaton work that you can't really bill for, so don't forget to count it! In fact, any hourly wages are actually minus these unbillable prep times.

-don't be afraid to say no

stick to your business plan. people can respect that, and when you add your reliability in this product you will have a business. Reputation + Reliability = Success.

-consider monthly packages instead of yearly.

When are your bills? I bet their monthly, not yearly. Maybe some are weekly. Therefore adjust your billing structure to match your needs. Think of your product as really always a service, paid monthly, and you'll do well say 3 months, 6 months, 12 months of support with each having a different cost. Cashflow rocks

-share the responsibility

Some people have great ideas, but are so afraid of growth that it can stifle a new company. As you grow don't be afraid to delegate your needs to others in your business, or invite other employees, or other small businesses.

For example, you should probably be looking for an accountant every 3 months in the beginning (minimum), or any other kind of complementary entrepreneurs out there to offer you support as their core business.

good luck
sf2k

You sound like you having problems justifying your bill!!,, I respect that, It means your care about your company and your clients.

You should ask them If they want a flatrate with support or by each hour. Tell them what you think. Tell them about your software and what support questions you think people would have. Again you know your software and how GOOD it is. Is it user friendly ? Is it hard to get ? ,, any tricky parts ?,, Even the easiest software will get the most AMAZING questions!!!!!. Take it from a man that have worked in customer support for over 7 years!!!!!!!!!!!!!!!!!!!!!!!.

I really hope this will work out for the best!!.

Please tell us how it went when you are done

- Ken

Thanks guys for you "eye" on this.

I really appreciate your input.


Well this whole thing has taken a weird twist over the past weeks.

Since the toolbar reached management, things got a little heated with different departments in the company. One department decided to say that they already had some ideas in progress to build a toolbar, even though when I first released the toolbar to them (released in trial and free to distribute within the company until further notice) they were loving it. So then my impression was that they were going to stiff me. But now, they are saying that their plans were to have one developed externally and would still need to be developed. Since they already have one now (that I built) they decided to get an estimate from me anyway. So, it has been an unusual ride.

I've read your input, but am still not too clear on the details.
I have no idea how to estimate what "might be needed" as far as support and updates. I figure that there are no updates... just more development.

I was thinking something like this:

* cost of development (hours put in so far: about 25).

* 60 hour minimum prepaid (5 hours month x 12 months) for support. any additional support at a flat hourly rate.

* any further development billed at an hourly rate.


I thought this might be reasonable. Any thoughts??
Does this seem to be reasonable? Any ideas on rate amounts?



Thanks guys!