Apps Charging For An Application

[beachdogvet]

Not sure if this is the correct forum for this, but I didn't see any other applicable area.

I've created an Android app for a relatively large restaurant chain. I wasn't requested to do this. The idea was, to create something useful that would provide value to the business. Once completed I could "pitch" the idea/application to the business and see it they'd like to purse the matter further.

In short, the application provides all the current locations of various chains, functionality to call the restaurant, map the location via Google maps and some other features I though would be of value.

So I got to thinking.....what if they say yes! "We'd like to pursue this."

• How much should I charge? What factors other than my time should I consider?
  
• Would I charge some relatively minimal amount ( whatever that would be I have no idea) for the "base" application, and then charge more for additional work? For example, my app uses Azure Mobile services database to provide data to the app. There would surely be additional work involved to manage the data in the database.

I'm sure there's others things I haven't even thought of with respect to entering into a business negotiation. Constructive thoughts and ideas would be welcome and appreciated. Thanks.

 

[mikedt]

Not sure if this is the correct forum for this, but I didn't see any other applicable area.

I've created an Android app for a relatively large restaurant chain. I wasn't requested to do this. The idea was, to create something useful that would provide value to the business. Once completed I could "pitch" the idea/application to the business and see it they'd like to purse the matter further.

In short, the application provides all the current locations of various chains, functionality to call the restaurant, map the location via Google maps and some other features I though would be of value.

So I got to thinking.....what if they say yes! "We'd like to pursue this."

• How much should I charge? What factors other than my time should I consider?
  
• Would I charge some relatively minimal amount ( whatever that would be I have no idea) for the "base" application, and then charge more for additional work? For example, my app uses Azure Mobile services database to provide data to the app. There would surely be additional work involved to manage the data in the database.

I'm sure there's others things I haven't even thought of with respect to entering into a business negotiation. Constructive thoughts and ideas would be welcome and appreciated. Thanks.

Is this app going to be exclusive to that particular restaurant chain/business, and carrying their branding and products? If so, I don't think you can charge anything for the app, not to end users. I'm thinking of things like McDonald's, KFC & Pizza Hut apps, those are all free. Those are usually telling where the local restaurants are, and what's on the menus, special offers, etc. No doubt the restaurants are making money via their apps, with increased custom. Maybe you can try charging them for your time in developing the app, plus whatever you need to keep the on-line back-end going, Azure Mobile, but I don't think you can charge customers for the app itself.

Most restaurant chains around here are displaying QR codes everywhere. Scan with phone, and takes customers straight to their official websites and free apps.

 

[beachdogvet]

Maybe you can try charging them for your time in developing the app, plus whatever you need to keep the on-line back-end going, Azure Mobile, but I don't think you can charge customers for the app itself.

Exactly...that's what I meant. For my time and efforts and any other potential work in the future. Like to develop an app to input data to the back-end database etc and so forth. I'm still at a loss as to what I should charge. Hence my original questions.

 

[mikedt]

I don't know. One thing, what country are you and the restaurant chain in, because if you're in India or Pakistan or something, likely to be much less than it would be in the US or UK. How long did it take you develop the app, how much work do you need to do to maintain it, and how much are you paying for Azure services?

Another thing, what made you start this project, without knowing if the business would even be interested in it? Most businesses I've known if they want or need an app, they might develop it in-house or contract a third-party dev to make it for them. Do you have any kind of pitch or plan you can put to the restaurant, as to how they can benefit from your app, like increased patronage and more money?

 

[alostpacket]

There is an easy rule of thumb you can use to determine how much to charge. Calculate how much you could have made doing something else for that amount of time. This is good when you are starting out and learning (as my post is assuming).

Other resources include: Salary.com, Indeed.com. Glassdoor.com (search for Jr Android Dev, then divide the annual by 50, then by 40, to get the rough hourly rate).

If you go by this method, you will know 1) you aren't wasting your time, and 2) you are learning. In time you will be able to command a SIGNIFICANT salary. Android devs are in high demand right now, but you can't use that fact when your are starting out, only when you have proven you can execute/deliver reliable, professional products.

Hope that helps, and good luck!

 

[beachdogvet]

There is an easy rule of thumb you can use to determine how much to charge. Calculate how much you could have made doing something else for that amount of time.

Ya...I more or less had the same idea in some respects. I thought....well first I could calculate an amount based on what I currently make at my regular daytime job using my current hourly rate. I currently design and write code for a defense contractor. I've been writing code more than 20 yrs now. So I got that base covered.

What's throwing me is......how in the world do I figure out what I should or perhaps could charge, for the potential value the App might provide? For example, lets say.....

A patron of the restaurant downloads my App. They see some data provided from the App and based on that make a bee-line over his or her's local establishment. That oh by the way, just happens to be in the same town/city they live. This patron ends up throwing a bunch of $$'s towards the restaurant. Just an example...understand?

Okay, so now as a result of my App, that particular patron has thrown $xx.xx amount of dollars to this restaurant. I obviously can't figure out that specific amount, I get that. However, how in the blazes do I figure out something that represents that situation? You see what I'm saying? And what's more. If I can figure that out for an individual, how could I reasonably and fairly figure a value multiplied for X number of other people who might download the App and exhibit the same behavior. You see what I'm saying?

In other words....or to summarize, I want to figure out ( from a money/cents perspective) what would be a fair price to charge this Restaurant ( "Corporate")....... that fairly recognizes and subsequently compensates me for the potential extra patronage this App could potentially provide towards the restaurant. You see?

 

[beachdogvet]

Another thing, what made you start this project, without knowing if the business would even be interested in it? Most businesses I've known if they want or need an app, they might develop it in-house or contract a third-party dev to make it for them. Do you have any kind of pitch or plan you can put to the restaurant, as to how they can benefit from your app, like increased patronage and more money?

I was at this establishment one day after work with some coworkers, throwing back a few beers. The manager comes by our table...asking us if everything is alright. You know...one of the things managers do. So with a few beers in me, I ( and some of my coworkers) were making small conversation with this cute manager, I blurt out... '"Do you all have an Android phone app?". She says... "No, but been thinking about it". I don't know if that's true or not. I mean the part of her thinking about looking into getting a project of that nature started.

None the less, that got me thinking.......I'll build one, pitch it to her again sometime and see if she or thinks Corporate would be interested. So to answer part of your question(s). I did it based on a hunch, gut feeling, something to do when it's raining outside and I'm in my house just doing nothing basically.

With respect to your other question concerning "Do you have any kind of pitch or plan you can put to the restaurant, as to how they can benefit from your app, like increased patronage and more money?

Exactly! "Ding Ding Ding Ding...Give that man a cigar!"

That's precisely the point of why I started this thread. I eluded to that in answering the other gentlemen's "alostpacket" post. How in the world do I figure out what to charge for potential extra patronage this App may provide.

 

[alostpacket]

Your product is your dev time, their product is using your app as a part of their business.

In other words, it's not something you can calculate, unless you have some kind of clear, concrete referral analytics. Extra patronage is the value you are providing them.

The trick is to build something you can build again for their competition. You don't need to make bank on your first app. You need to make "sustainable".

I don't think you want to put a price on usage. Just my 2c.


Anyways I think skimmed the first few posts too quickly and misunderstood what you were originally were asking. My apologies.

You may find some interesting reading here: https://startupsanonymous.com/

Or, if you are in NYC: http://www.meetup.com/Startup-Office-Hours-NYC/