Licensing or selling a mobile application to another company

Question

I have made an application for android devices which basically predicts football games results depending on certain variables, this was a prototype, available free. The method and principle are different from other mobile applications.

The problem I'm having is giving an exclusive or non exclusive price for the app, which a person has asked to buy for his company which is fairly new. If the requirements are all met, what should I base the exclusivity price on or even if it not sold exclusively to him what should I sell it at for his company.

Can anybody help me with clear pointers I can go by?

EDIT

It's a company that is interested in my app. He doesn't want the code, the company want my app under his company or made for his company using my methods. Initially the app wasn't aimed for making money since it was just a quick fun project. I want to know how much should I sell the whole application for? how do I calculate a figure for the company to purchase the app for the company's use?

Answer 1

If you are talking about selling your source code, then look at this question: https://softwareengineering.stackexchange.com/questions/206793/how-do-you-put-price-on-your-source-code

If you are talking about selling the right to be the only user of the app (and later resell it himself) without selling your source code, then things getting more complex.

Do you have existing users of the app? How many?

How much do you earn from this app monthly?

How much do you predict the client will charge fee to his users?

After you figure out this, you have multiple choices:

• Keeping your ads in the app, letting him marketing the app. He earns from fee, you earn from ads.

• Selling him full rights for 1 year for the price you would earn in 1 year + adding 20% or so extra on that price.

• Combination of the above

Beside your rent price, you can also talk with him about annual support contract where he will hire you for X number of work hours for the period of 1 year (as a programmer). In return, whenever there is a bug, you immediately fix it until you spend all pre-bought work hours.

EDIT

After you additional info, I have something more to add.

You should also read a link I provided. You will see that people are recommending a few ways to calculate the price of the code which you can apply for your app.

Do you know how many work hours it took you to make the app? Multiply it with your hourly price and then with number 3. You will get the price of your app where you will actually earn money. If you don't know your hourly price, then go to multiple top freelancing websites and check the average price of Android coding. I think it should be around $20 per hour. If you're however living in the USA and the company is from USA as well, then I think the hourly price will increase to at least $60.

Now, I should warn you that after you calculate this, the price will probably be too high. Then do your best to get as closest price to this one as possible :).

Since we have not see your app, keep in mind that you're not selling the app, but the algorithm. So if someone will make similar app for $500 or $1000, it does not mean that your algorithm does not costs as much as $10k. Betting is a serious business. As comparison, a friend of mine who has a team of developers and who code betting apps only, has recently got a contract with some South African company to make a betting app for them (actually to adopt his existing app to their needs), and he took $2M for that job. This is to be aware that is someone knows how to use your app, and if the algorithm is so good indeed, then such person can earn six figures pretty quickly.