“If open source is the term for free software, how does a company generate revenue?” It is a common question among non-technical people. However, there is a group of talented, technically skilled individuals who have the knowledge and business acumen to write open source software and structure the sale of code products in a way that produces sales revenue. There are several options:
• Sell code once and allow buyers the total freedom to modify it to suit their purposes
• Sell code that is a hybrid of open source code and licensed code
• Sell open source code writing consulting services to other companies (B2B)
• Maintain an open source library containing code that can be customized for customers for a fee
The business plan for open source enterprises clarifies a sustainable plan for generating revenues and profits.
The questions that need answers during business planning include:
• What is the main source of revenue for the services business?
• Who are the targeted end users of the open source software? Is it primarily a B2B or B2C business?
• What types of licenses are offered to clients, i.e. free open source, permissive open source, restrictive open source, etc.?
• What marketing activities are planned for attracting and retaining clients, i.e. online marketing, mailing lists, special promotions, developer’s conferences, etc.
• What experience does the business owner and other code writers claim, both in terms of code writing and managing a business?
• What legal structure was chosen?
• Are investors needed? When is the business planning on becoming profitable?
Technology has made it possible for lone entrepreneurs start home-based businesses and easily sell products and services like downloadable software. Though open source software has a free component, code writers can leverage their talent to sell licensed code and customization services that build on the open source component. There is a seemingly endless need for innovative software that helps businesses differentiate themselves in the marketplace.
OGS Capital has extensive industry experience and a team of professionals who can offer the kind of high quality advice and direction needed for developing successful business plans. The process begins with clients completing the short online contact form.
Illustrative business plan samples
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.