how can I define software price for developing database software for perticular company?

Question

I am now in trouble.
because always I assumming price for developing software for company is very low as I expected. I am database software developer and generally I am developing software for perticular company, like their payroll, accounting, taxation, and other and I say them I will charge you like 1000$ and more but my 2 to 3 month will pass away for developing this software so always I failure to get succeed and also I found many marketing problem. can any one suggest answer???

Answer 1

Don't know about the marketing but you should plan better.

Since you have experience already you should know how much time it's going to take you to program the software in hours. Set a fixed hourly rate. take the number of hours it's going to take you to program and add about half so you have 1.5 the amount of time to do it. The number of hours is now X.

X times your hourly rate + any other extra overheads you have to incur to write the software = the price you should charge.

The calculation of your hourly rate should be something like this:

You will have expense during the development of your software. Budget your expenses based on past spending. Now you have a monetary value, $.

If you work 160 hours in a month you now have a time value, t.

Y = $/t = what it costs you to do business.

You are not in business to break even, you are in business to make profit. So now you take Y and times it by your profit percentage, say 30%.

Let say your overhead is $2000 each months.
Y = $2000/160 = $12.50
you charge per hour $12.50 *130/100= $16.25

It's just an example and there are many ways to work it out and many more factors such as unproductive time, lunch time and other disruptsions. Generally the companies I have worked with charge by the hour to write software they just use much more complex accounting to calculate the rate per hour.

You should post this question in the business section for a better answer.

Hope that helped.