What is the best business plan for this scenario?

Question

I have some software that is designed for real estate developers and I have share it with some to get some feedback and see if there has been any value. The response was very positive and I was told repeatedly that they would be willing to pay for the software. To be clear, toe software is tied into my site so I am able to maintain who is using it and whether they are permitted to use it.

In short, here is what I am considering.
-I could sell the software individually

-I could sell the software on a subscription basis

-I could give the software away free, build up a massive base of customers, and make money via advertising or just selling the company (the youtube strategy I suppose).

Taking the 3rd approach, if I was able to get up to 100,000 users, how is the company evaluated?

To be more specific, I can totally understand how to evaluate thins on the first 2 approached, but if I am trying to just get as much exposure as possible with the 3rd approach, I am not sure how the business world evaluates business in this manner.

Aside from just selling advertising, if I had 100,000 users and wanted to consider selling the company (what youtube did only on a significantly smaller scale) what should I use to predict future value in my business plan?

Thanks in advance.

Answer 1

Here are some sample software company business plans that should help you address your evaluation issues. Good Luck!

http://www.bplans.com/spv/3250/index.cfm?affiliate=smallbusinessnotes

http://www.bplans.com/spv/3062/index.cfm?affiliate=smallbusinessnotes

http://www.businessplans.org/VeriText/Verit00.html

http://www.bplans.co.uk/sample_plans/browse.cfm


Sample software company feasibility studies

This one seems to have what you desire.

http://www.klariti.com/templates/Functional-Requirements-Specification-Template.shtml

http://www.statskontoret.se/upload/Publikationer/2003/200308A.pdf

http://www.isd.mel.nist.gov/projects/rtlinux/swedish-open-source.pdf

http://ec.europa.eu/information_society/activities/opensource/cases/index_en.htm

http://ec.europa.eu/idabc/servlets/Doc?id=1978

Answer 2

Subscription is probably your best bet. Developers are not poor, they can afford to subscribe. Advertising will only annoy the hell out of them.

As to your valuation question, it really doesn't matter what the business model is. What matters is how much money it makes now and how much it is experted to make in the future. So the valuation procedure would be exactly the same: either a discounted cash flow model or a multiple of sales, earnings, or discretionary income. The former is preferred in growth situations, the latter, in cases of stable businesses...