Calling all business owners and managers:I need help

[KofDelight]

Good day

I am in a serious pinch,as most of you know I have ventured into starting my own business and finally today am are registering it.

There are three big questions I need answered.

1.What is the estimated value of a software application that is being leased to a large organization?(Planning to lease it for 2 years)

2.What are the estimated costs for these stages

1. Implementation
2. Testing
3. Integration with other systems

3.How does the whole SARS thing work concerning taxing SMBs,especially in their first year of operation?

Please if anyone can help.

[DieGrootHammer]

Well firstly the costing will be determined by what type of software you have/want; how much has it cost to develop and how your sales model forecasting is looking like for the next 2 year. How many clients are you planning to rollout to, as this will help determine when you will reach your break-even point and you can from there start calculating base cost. This you have to do before selling the product, otherwise you will over or under value your product quite severely. Look at what your competition is doing as a reference as well. Costings and selling prices are a complex process you have to go through before actually selling anything successfully. You will need to do some more research in order to answer these questions.

As for SARS, I'm not an expert on the subject, but you first have to value your company and your product before doing taxation processes. And to get the value of your company, you have to go back to the top part of my comment....

[matt]

Can't say much about the SARS thing, but the value and cost around software is completely dependent on what the software is. Is it a big piece of software, or a small app? Is it a crucial part of the workfow for the organisation, or a utility that they might or might not use? etc etc

Likewise for costs, it might be a simple implementation that just requires a setup file to be run, or a very complex implementation that requires servers to be set up, databases created, configuration done, etc.

Integration with other systems also all depends on what integration actually needs to be done. Do you need to integrate to other systems, what systems do you need to integrate to, does the software already support the required integration, or do you have to have more development done to support it?

All-in-all, it's really a specific case scenario, so no-one will be able to give you an answer to questions like those without actually doing some investigation and knowing the software and the environment and requirements of the company you want to deploy to.

[Cicero]

How long is a piece of string?

How can any of us estimate any of that without knowing what the hell you're making?

As far as tax goes, I'd speak to a tax consultant and not try to do it yourself. I have my own small electronics company on the side and I even use a tax consultant. Makes things a lot easier, although I haven't made much cash out of it.

[TheAvenged87]

Good day

I am in a serious pinch,as most of you know I have ventured into starting my own business and finally today am are registering it.

There are three big questions I need answered.

1.What is the estimated value of a software application that is being leased to a large organization?(Planning to lease it for 2 years)

2.What are the estimated costs for these stages

1. Implementation
2. Testing
3. Integration with other systems

3.How does the whole SARS thing work concerning taxing SMBs,especially in their first year of operation?

Please if anyone can help.

Need more info on the software. As for question 2, that's for you to determine what your hourly rates are and how many hours of work those stages will take. Which, in turn, comes back to what type of software it is.

[czc]

You pay tax based on your companies income.

Taxable income (R)-----Rates of Tax (R)​
​0 - 67 111 ------------ 0% of taxable income​
67 112 - 365 000​ ------7% of taxable income above 67 111​
365 001 - 550 000 -----20 852 + 21% of taxable income above 365 000​
550 001 and above -----59702 + 28% of the amount above 550 000​

From: http://www.sars.gov.za/ClientSegment...s/default.aspx

I hope this information is correct.

[KofDelight]

Ok the type of software is an Asset management application that can be used on a mobile device and on a PC,to tag and catalog anything physical within an organization,will mainly be used for accountable(who the item belongs to),insurance purposes,auditing purposes,to keep track of items where-abouts and so on.

PS,the software is being developed from the requirements of the client,so should we charge them more for that?

There are two systems that we need to integrate our software with,these two systems are also outside vendors,we have not met with those developers yet for discussion on a program integration.

The organization we are developing for houses over 20 000 individuals.

[DieGrootHammer]

Ok the type of software is an Asset management application that can be used on a mobile device and on a PC,to tag and catalog anything physical within an organization,will mainly be used for accountable(who the item belongs to),insurance purposes,auditing purposes,to keep track of items where-abouts and so on.

PS,the software is being developed from the requirements of the client,so should we charge them more for that?

There are two systems that we need to integrate our software with,these two systems are also outside vendors,we have not met with those developers yet for discussion on a program integration.

The organization we are developing for houses over 20 000 individuals.

Taking experience with rolling out huge systems over multiple thousands of users, all I can say is make it a sushi menu...

That means list every aspect of what your software can do as an individual line item, and price those options. This gives your clients a great way of choosing exactly what they want, and you are more assured of a sell. With this your prices will seem lower than competitors, but you give slightly less function. Adding the whole basket of options you can even make it at a lower price. Also think about user access, whether you are going to charge for an individual user or for the bulk. You must remember that at the end of the day you need to make money from this as well to cover all your costs.

The size and level of integration of the system into your client environment will play a major part in the costing of the business. Unfortunately no one of us will be able to give you a rand value of what your software is worth, only what you must take into consideration when compiling your costing model. Like I said, it's very complicated and time consuming to do, but very integral to the survivability of your company.

[czc]

I would think it also depends on how mission critical a system it will be.

[matt]

Ya, custom built applications would cost a lot more than something off the shelf because you're making it specifically for them and you would have to fund the whole development from what you can charge them rather than funding development yourself, and then selling it for much less, but to many more customers.

The only real way to put a price on it would be to work out a realistic estimate for how long each phase of development (specification, design, development, testing, implementation, changes and stabilisation, etc) will take, and put an hourly rate on that, and then work out a service level agreement for support, and put a price on that, maybe get them to pay a retainer for a certain number of hours per month at a discounted rate, and then have a higher rate for overflow.