Question

I always had trouble with estimating cost/price of finished software (or programming work), so here are two questions about it.

question 1:
You’re asked to write a piece of code for cash (all rights to the code belongs to buyer once you’re done). You know approximate number of hours it will take (+-25%), and approximate complexity (i.e. whether you can write it in your sleep or will suffer severe mental burnout once you’re done). Product is written in compiled language (C, C++, etc.).

How do you(would you) pick price for the job?

question 2:
Let’s say you spend a few months writing something, this thing is now finished, and now want to (try to) sell it.

Product will be extremely “Niche”, and it won’t be possible to sell it for large numbers of people (it is SDK, game engine, library, or something like that, not a text editor – number of people that would want it will be small). “opensourcing” it is out of the question.

You know approximate number of hours you spent, total size of files, LoC, and you have a repository with entire development history.

The result can be sold with or without source code access, for commercial or non-commercial use, or you can (try to) sell software rights.

How do you determine price for:

1. Rights for that piece of software?
2. Commercial use with source code access?
3. Commercial use without source code access?
4. Non-commercial use?

Answer 1

You can find some interesting insights gathered in a (free) book of Neil Davidson: http://www.neildavidson.com/dontjustrollthedice.html