Configuring A Business Deal - Need Inspiration
Discussion
Figures are simplified:
Clever guy makes a device that 100 people use for £100 each p/a on license (no pay / no work) stable user base.
Device is as good as many at £1k a year and people are clammering to get one but training is the chicane.
Teaching people to use it and explaining it to new users takes up all his time so he cannot make the device better (2.0)
Approaches us to do sales, training and support and to expand the core user base - to learn how to use it you will pay £250 for some mild customisation.
So conundrum is how do we get involved and maintain his £10k (its much more than this) ?
If we take over the training we get £250 a go, if we progress to 2.0 we can charge more, we can sell a support package but structuring it so he ringfences his £10k and make him "go for it" is taxing me.
His income would naturally decline and is vulnerable to a hostile competitor so I dont want to end up guaranteeing his cash in declining sales.
Any help appreciated
Clever guy makes a device that 100 people use for £100 each p/a on license (no pay / no work) stable user base.
Device is as good as many at £1k a year and people are clammering to get one but training is the chicane.
Teaching people to use it and explaining it to new users takes up all his time so he cannot make the device better (2.0)
Approaches us to do sales, training and support and to expand the core user base - to learn how to use it you will pay £250 for some mild customisation.
So conundrum is how do we get involved and maintain his £10k (its much more than this) ?
If we take over the training we get £250 a go, if we progress to 2.0 we can charge more, we can sell a support package but structuring it so he ringfences his £10k and make him "go for it" is taxing me.
His income would naturally decline and is vulnerable to a hostile competitor so I dont want to end up guaranteeing his cash in declining sales.
Any help appreciated
randlemarcus said:
Surely 2.0 would involve some sort of simplification of the user experience, so while he can now roll out 1000 users, none of them need training, so that's your £250 up the swannee, while he laughs all the way to Guernsey?
No 2.0 makes it more complicated the device does more and needs more "tailoring" to the user initially. Apart from our £250 every time a users circumstances change they need a bit of dev time (not all of them and not much but enough) which is chargeable.We think the users can easily be expanded by 50% and the yearly charge increased for us.
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A recurring revenue stream of the subscription plus the onboarding feeDELETED: Comment made by a member who's account has been deleted.
Yes this on offer setting up a new ltd company One person has got this far but the opportunity is clear and its a good income for one person, he wants to not risk his current income in this deal which is where I am struggling.
He is one of lifes givers and his motivation is to do more good for others not himself - quite amazing
Because he is an inventor and whilst aware of other competing devices he didnt price to market - the current users would pay more and the scope to improve the support is where we can capitalise then improve the product and charge more.
HOWEVER protecting his mythical £10k (its a 6 fig sum and rock steady over 6 years) is where I am stuck
mr_spock said:
Protecting his income is clearly the main problem. You could ask for a reseller deal in which you get 20-40% plus the training revenue with an option to purchase equity once over a certain level, i.e. once you've proved that you can increase his revenue by a substantial amount. However, if you think the revenue will decline over time, is he missing that issue?
I think thats a good basis to work with - thanks mr_spock said:
Does he think his income will just be static?
Yes and I am not causing friction by arguing the toss on it, I will accommodate it in our dealGuys all great points, its software and its configured to each user say 20% (80% is generic), we would have a developer shadow him for as long as it takes to ensure we have "abduction security" and a license / channel / user agreement is the way forward.
I am pulling it together thursday to present friday - our risk is purely staff employment weather short contract or whatever from day one we need first line help (admin), onboarder and a dot net dev (we have this already) so extra cost of say £5k a month to the business which is part of the plan but needs to be recovered.
I am pulling it together thursday to present friday - our risk is purely staff employment weather short contract or whatever from day one we need first line help (admin), onboarder and a dot net dev (we have this already) so extra cost of say £5k a month to the business which is part of the plan but needs to be recovered.
coyft said:
DSLiverpool said:
Guys all great points, its software and its configured to each user say 20% (80% is generic), we would have a developer shadow him for as long as it takes to ensure we have "abduction security" and a license / channel / user agreement is the way forward.
I am pulling it together thursday to present friday - our risk is purely staff employment weather short contract or whatever from day one we need first line help (admin), onboarder and a dot net dev (we have this already) so extra cost of say £5k a month to the business which is part of the plan but needs to be recovered.
I did a deal with a US software company. I negotiated the sole European distribution rights. If you need any help with the distribution agreement, feel free to PM me.I am pulling it together thursday to present friday - our risk is purely staff employment weather short contract or whatever from day one we need first line help (admin), onboarder and a dot net dev (we have this already) so extra cost of say £5k a month to the business which is part of the plan but needs to be recovered.
This has happened (nearly) our biggest issue was second guessing the developer who was far more flexible on stuff we thought he wouldnt be and rigid on the opposite.
A 3 month trial leading to a 5 year rolling reseller agreement is nearly agreed (talking percentages) and for the trial we will need our developer and a first line phone answerer trained.
I`ll update
A 3 month trial leading to a 5 year rolling reseller agreement is nearly agreed (talking percentages) and for the trial we will need our developer and a first line phone answerer trained.
I`ll update
Tuna said:
DSLiverpool said:
This has happened (nearly) our biggest issue was second guessing the developer who was far more flexible on stuff we thought he wouldnt be and rigid on the opposite.
A 3 month trial leading to a 5 year rolling reseller agreement is nearly agreed (talking percentages) and for the trial we will need our developer and a first line phone answerer trained.
I`ll update
Congrats. I wouldn't mind some business like that A 3 month trial leading to a 5 year rolling reseller agreement is nearly agreed (talking percentages) and for the trial we will need our developer and a first line phone answerer trained.
I`ll update
Our really big client project right now is many micro social influencers v one big daddy social influencer - I am favouring the former.
Sadly this didn't happen, the chap is one of life's good guys and makes huge contributions to animal welfare that meant it was had to configure a deal that suited all involved.
Its possible we could market to his database and donate to tne trust but that's not a given.
Feel a bit flat but it was obviously never meant to be.
Its possible we could market to his database and donate to tne trust but that's not a given.
Feel a bit flat but it was obviously never meant to be.
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