How do I go about valuating a reporting solution I built?

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Will assist with implementation.

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Define this, explicitly, as you will be killed if you don't. In the professional services business, when a customer calls someone has to answer, you should draw the line that that is not you at 2am on a Saturday.

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Will be available for questions or fixes needed in the future.

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See above. How long is your warranty? What defines a feature request vs a bug? What you built will hopefully support 80% of use cases out of the box. That other 20% will be so loud you will question everything you've done.

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Do not create a 2nd job for myself (additional hours during implementation is expected).

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Again, define this word for word. Additional hours in terms of 10 a week? Because they will try to get 60 a week.

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There will likely be an initial fee + annual fee for the customer.

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There should absolutely be an implementation fee on your behalf. Our previous rule of thumb on implementation costs were 20% of annual costs. Define time duration of implementation. If the customer can't get you and IT resource to work with, you're waiting around for weeks or months to have someone on their end to help you get integrated.

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What should the compensation split be between me and the consulting firm for both the initial fee and the annual fee?

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You'll have to figure that out with some trial and error I'm afraid. We priced things at one startup really high, and felt it when people got sticker shock. Start high, be prepared to offer "discounts" for early adopters to reduce the sticker shock if it hits them and go from there.

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thegreatboudini

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I appreciate all of the insights! A lot of things for me to think through the next few weeks before our meeting. This is all new to me, so it gives me a great idea of what I should be considering.

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Templates don’t change? Or is a new template for each implementation?

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The templates will not change. Each customer will be virtually identical in how they operate.

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Are you wanting to charge a fixed fee upfront or catch a recurring fee on the number of clients they sell to?

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My goal would be to ask for both. They are thinking 5-10 clients in the first year. I would like to get a percentage cut of their annual fees they are charging to the clients. If I were to guess based on conversations we've had already, something along the lines of $10k to implement and $10k per year per client.

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Just shooting from the hip, I’d consider starting at $250/qtr platform fee and change $175-225/hr for consulting hours

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The hours thing is tricky. I want to get compensated for ongoing consulting of the tool, but also would like a cut of their annual fees they are charging. I would think my cut would include a certain amount of hours of support per each client. Maybe I can negotiate a rate on if it goes over a certain amount.

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Eta: I’d also negotiate a non-compete and exclusivity agreement. Make sure that they can’t bring in their developer to cut out or use another developer.

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This is a great idea and something I definitely need to include as part of the negotiations.