Should I charge more to develop an app that my client will be leasing out to others?

Question

Whilst I have experience in app design and development, I'm somewhat new to the business side of freelancing.

I'm creating a web-based app for a client that will be used to manage his customer records. I'm charging a one off fee to build this web based application.

The client has emailed me today to say that he would like to allow other business owners (in the same field) to use this same app for a small fee each month (therefore generating extra income for my client).

Should I charge more for the integration of this functionality, negotiate a commission agreement (i get x% of the income he receives from the app I've built) or do I simply finish the project without requesting higher payment?

How would this Scenario typically go?

Thanks in advanced guys.

Answer 1

Firstly, are you providing the App as a one-time fee or is there an associated maintenance contract (updates/bugfixing/etc)? Adding access for extra accounts within the system will/could increase the burden of maintenance.

I would suggest working up two costs for the added work, if they seem reluctant for the first then you can offer the second as an alternative:

1. Change request from original specs. Figure out how much extra work it would be and charge appropriately. Chances are they'll go for this choice.

   If charging for maintenance that fee will have to go up as well

2. Offer the option of adding the features in but with your monthly commission agreement to support the cost of the added maintenance.

   You're losing out on potential customers by allowing him to lease out the product rather than creating a copy for each of those business owners.

Ultimately you're adding for the extra cost of work as well as any extra maintenance burden. How you phrase it depends on how you think they will take the additional cost.

Answer 2

Very interesting scenario. This is something like client gets commission per reference.

Generally I also doing work in same way , Me and My client shares 70%-30% when I get reference from client I pay commission 30% of total amount to client.

In your case , Yes you can add extra amount to project cost for those references ,But make sure that it should not be too high and should come under budget of that person for whom you are going to develop app.

Because in future if that person like your work then he/she can give you more reference so this will be good chain and income by references. So decide reasonable price to get more benefits.

Answer 3

No, no, no!

You started the project as a work-for-hire, not a work-for-commission. You can't change how you're getting paid in the middle of the work. In every legal venue I've ever heard of in the western world, what you're suggesting validates the basic principle of contracts.

This would be like you renting an apartment from someone for $500/mo, and then the landlord coming back the next day after you've signed a rental agreement and telling you she/he wants the rent to be based on a percentage of your income. Really? Let's be sensible.

If the client is asking for new features, that's a different case. But it sounds like you're just getting greedy. Commission agreements are for business partners, not clients.