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View Full Version : What was your startup cost?




Delirium39
Nov 8, 2008, 11:47 AM
I assume there's a lot of indie developers on here, including myself. So I thought it might be interesting to share what our startup costs were for getting an app on the store, to possibly give new developers a sense of what they're getting into. Be as specific, or as general as you'd like. I'll go first:

Mac Mini $600
iPhone Developer Fee $100
DBA business license $50

Total: $750

It may sound like a lot, but I made it all back after three days on the App Store.



firewood
Nov 8, 2008, 01:30 PM
That's pretty much the minimum, unless you already had an Intel Mac and a business license (I did).

But beyond that, one might need: internet access, business class website and email, logo and website design, taxation and legal consulting services, trademark registrations, DBA or incorporation fees, etc.

The last app I released has so far just barely covered the cost of it's icon and artwork design. Hasn't gone into the black yet.

.

Farani
Nov 8, 2008, 01:36 PM
I assume there's a lot of indie developers on here, including myself. So I thought it might be interesting to share what our startup costs were for getting an app on the store, to possibly give new developers a sense of what they're getting into. Be as specific, or as general as you'd like. I'll go first:

Mac Mini $600
iPhone Developer Fee $100
DBA business license $50

Total: $750

It may sound like a lot, but I made it all back after three days on the App Store.

I already had two macs so my only fee was the $100 iPhone developer fee. I do all my own graphics work. Everything I will do will be independent so $100 will be my only fee. To be honest, the only program I've developed thus far was developed for my own needs so I don't even care if I make back my $100. I'm about to submit it to Apple for approval now, so if I make anything at all off of it, I'll be ecstatic. I wrote this program to make my life easier. If others benefit from it and I can make some money back from all the hours of work I put in, then wonderful.

What is a DBA business license?

What apps did you develop if you don't mind me asking?

firewood
Nov 8, 2008, 01:53 PM
What is a DBA business license?

They are 2 separate things in my city/county. A business license is how the city registers and collects its tax on anyone doing business within city limits. A DBA ("Doing Business As") registration is needed if you put any other name on your business or products ("Foo Game Company") other than your legal name, so that the legal authorities know how to track down the responsible party for that business name. Consult with a lawyer (or maybe a Nolo book) for the real details.

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Farani
Nov 8, 2008, 02:00 PM
They are 2 separate things in my city/county. A business license is how the city registers and collects its tax on anyone doing business within city limits. A DBA ("Doing Business As") registration is needed if you put any other name on your business or products ("Foo Game Company") other than your legal name, so that the legal authorities know how to track down the responsible party for that business name. Consult with a lawyer (or maybe a Nolo book) for the real details.

.

Is it necessary to register with anyone for the sales acquired on the app store if you're using your own name? Probably a newb question, but I haven't investigated it yet. Thanks a lot.

Delirium39
Nov 8, 2008, 02:10 PM
What apps did you develop if you don't mind me asking?

My app is TanZen (http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=286331900&mt=8). There is a Lite (http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=287657517&mt=8) version as well.

Farani
Nov 8, 2008, 02:20 PM
My app is TanZen (http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=286331900&mt=8). There is a Lite (http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=287657517&mt=8) version as well.

That's awesome! Sorry I completely missed it in your signature before lol.

Delirium39
Nov 8, 2008, 02:59 PM
That's awesome! Sorry I completely missed it in your signature before lol.

Thanks!

firewood
Nov 8, 2008, 07:32 PM
Is it necessary to register with anyone for the sales acquired on the app store if you're using your own name?

Check with your local city, county and state laws. It varies from place to place. Now matter how you make your money, the government usually wants its cut.

.

liptonlover
Nov 8, 2008, 09:00 PM
imac - $1k-something
two books - $60
Don't plan on getting a business license
Haven't gotten paid dev plan yet.
I'm 15... do I have to worry about a license or anything like that? It's not like the government gets any of my money right now anyways...

firewood
Nov 8, 2008, 11:37 PM
I'm 15... do I have to worry about a license or anything like that? It's not like the government gets any of my money right now anyways...

Depends on what country you're residing in. In the U.S., if you make past a certain amount, you have to file a tax return. If you file a tax return with business income (any payments from Apple), the city/county may require a business license. Your school may have an entrepreneurs club or business classes where you might find the required information. Or look in your local library.

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wizard
Nov 9, 2008, 09:21 AM
imac - $1k-something
two books - $60
Don't plan on getting a business license

Your planning should be based on need. If you have an app you hope to make money on then you may need to consider the different options as far as forming a business goes. Yeah it is a pain in the @$$ but if you actually start making good money Uncle Sam and his little brothers will want their cut. Plus there are other legal and liability issues to consider.

Haven't gotten paid dev plan yet.
I'm 15... do I have to worry about a license or anything like that?

Questions like this are best directed at a laywer if money is involved or if there are potential liabilities. The important thing with business startups is to make sure you have all your bases covered before you make that first sale. You will need to know how and when to file your taxes which varies a bit with the type of corporation you form. You will need to know your liability exposure and the type and amount of insurance you will need. If you are not up on accounting you may need services of a good one.

It sounds like a lot but if you have a reasonably successful product most of the expenses are quickly covered. If not you either write more apps or go out of business.

It's not like the government gets any of my money right now anyways...

True most 15 year olde aren't raking in a lot of cash so there is not a lot of concern. Once you do the money has to go some where and that's when you start to see the government take interest. You would be as legally bound to pay taxes on your earnings as anybody else. Of course there is a low limit of income where you would pay much if anything but that is a number easily exceeded if you are successful and you need to file no matter what.

Now if that seems bad realize a couple of more things. One; the Feds and the State will end up taking about 50% of whatever you make and that will get much worst in the future. Second; the more you can do yourself as far as managing the business the better but those fees to laywers and accounts are needed. Third; if you make a dollar in a business venture people suddenly think you are rich, sadly most people don't realize the effort involved nor the expenses and many of those people are now in charge - life won't be easy for businesses for the next four years.


Best of luck!
Dave

Nonnus3G
Nov 9, 2008, 11:41 AM
isnt a iphone / ipod touch missing in those minimal requirements ?

Delirium39
Nov 9, 2008, 12:09 PM
isnt a iphone / ipod touch missing in those minimal requirements ?

In my case, I already had one. :)

Niiro13
Nov 9, 2008, 12:09 PM
isnt a iphone / ipod touch missing in those minimal requirements ?

It depends. Is the OP asking for all startup costs, or just the ones that needed to pay for since the decision to start development?

If it's the former, then yes, it is missing.

If it's the latter, then it would only be included if you bought the device for developmental use. A lot of people bought the iPhone for a phone and bought the iPod touch for a music player. Then after a while decided to use for development as opposed to having a zune and deciding to code, so you buy an iPod touch.

firewood
Nov 9, 2008, 12:10 PM
isnt a iphone / ipod touch missing in those minimal requirements ?

It's certainly not recommended, but I submitted my first app before I purchased my iPhone. The app was accepted, and it appeared in the App store while I still waiting in line at an Apple store to buy an iPhone to test it.

.

liptonlover
Nov 9, 2008, 12:43 PM
In my case, I don't need to worry about having an iphone, though I do have a touch. I don't use motion, multi touch, it doesn't require a lot of power, anything like that. But you're right, a lot of people probably need an iphone to test on. Good point.


Now if I gave all my money to my parents as I received it, THEN would I have to do anything special? Or to do it like that, would I have to use one of their name as my dev name? This is really sounding worse and worse...

wizard
Nov 9, 2008, 01:34 PM
In my case, I don't need to worry about having an iphone, though I do have a touch. I don't use motion, multi touch, it doesn't require a lot of power, anything like that. But you're right, a lot of people probably need an iphone to test on. Good point.


Now if I gave all my money to my parents as I received it, THEN would I have to do anything special? Or to do it like that, would I have to use one of their name as my dev name? This is really sounding worse and worse...

Actually that could be a bad thing for your parents depending on how it impacts their taxes. You should sit down and discuss this venture with them.

As to the other business relationships you may or may not need realize that no business survives in a vacuum, all businesses depend on other businesses. A plumber needs a carpenter to build a house and both of those guys need the real estate system to sell their works.

The nice thing about IPhone is that it is about the lowest impact way to get started in business. The only thing you need is your unique program and a way to market it.

It is interesting that that dirty word (market) came up. The reason is that a good marketing plan can have a huge impact on your success. If you want to advertise it will be much easier to do as an established business. Also having a tax number gives you access to sales channels that you might not have as a consumer.

What I'm trying to say is that there are benefits to being in business. Sure it is a challenge and it is not for everybody but it does have it's rewards.


Dave

liptonlover
Nov 9, 2008, 01:37 PM
You discouraged me in that all I want to do is program, make money, and have people who enjoy what I make. Thanks for your help guys, at least I have an idea of what I need to do now. I derailed the thread lol.

wizard
Nov 9, 2008, 01:55 PM
You discouraged me in that all I want to do is program, make money, and have people who enjoy what I make. Thanks for your help guys, at least I have an idea of what I need to do now. I derailed the thread lol.

I think it is fair to say that many programers feel the same way! The problem is when there is significant money involved uncle Sam wants his cut (which is a mighty huge cut) and you need to be covered with respect to the sharks out there.

By the way the sharks are worst than uncle Sam as more than a few businesses have been wiped out by law suits. Just look at Apple and the stupid actions taken against them. Not a week goes buy that somebody doesn't come up with a get rich quick scheme and a laywer to pursue it against Apple.

So don't think of this as discouragement at all. Many businesses run trouble free for years. Rather think of it as part of the learning process. It is a bit like practicing all sorts of drills in prep for a big game, you might not use them all but being prepared can lead to winning.

Dave

liptonlover
Nov 9, 2008, 02:06 PM
So do I need to do something before my first sale, or just if I become successful? What would the government do if I just put a paid app up using my name, not as a business? Oh yeah, I'm in the US for future reference. MI, to be exact.

firewood
Nov 9, 2008, 02:26 PM
So do I need to do something before my first sale, or just if I become successful? What would the government do if I just put a paid app up using my name, not as a business? Oh yeah, I'm in the US for future reference. MI, to be exact.

First thing I would do is spend some time in the local library, looking for books on the subject of starting a small business in MI. Then check the web sites for your local city and county to find out if there are any additional legal requirements. Your school may have a business entrepreneurs club where you might be able to get some inexpensive initial legal advice.

Will all that paperwork and the tax issues be a disincentive for you starting a new business? That was actually a major topic debated by both candidates before this recent presidential election. You are now "Joe the Plumber".

.

liptonlover
Nov 9, 2008, 02:29 PM
Next stop the library then.

I'm homeschooled, so my legal advice is my parents and the internet.

It isn't, I was just never planning on starting an official business in the first place.

Thanks so much for all the help!
Nate

wizard
Nov 9, 2008, 05:39 PM
Next stop the library then.

Good first step. Make sure you get info specific to MI.

I'm homeschooled, so my legal advice is my parents and the internet.

Be careful of the Internet. Do try the SBA, that is the Small Business Administration. Hopefully the SBA will have a local SCORE chapter. Our local SCORE chapter runs little seminars on how to start a business. I took part in such a session recently it is worthwhile but a lot is crammed into four classes.

It isn't, I was just never planning on starting an official business in the first place.

It is not easy to determine if you really want to go this route and frankly I've yet to form my business. I might not have much of a choice at the rate my current employer is degenerating. In some ways it is a big pain but many people in the family and local friends have atleast a little something going. While not a big deal for yourself at the moment having an income stream independent of your primary income is very satisfying, it adds just a bit of security. In the coming months that will be very important.

Thanks so much for all the help!
Nate

No problem I've taken a keen interest in the idea of my own business recently due to a number of factors. So that is why I have all the info. It is unfortunate that the political environment will turn so bad for business but hey gotta role with the punches.

Dave

ArtOfWarfare
Nov 9, 2008, 07:09 PM
I already owned my iMac so that didn't cost a thing.

But I bought a new 2nd gen iPod Touch 32 GB just to test stuff on for $350. And it costs $100 for the iPhone dev fee.

So $450.

robotspacer
Nov 9, 2008, 07:29 PM
$100 iPhone developer fee
$40 Cocoa Programming book by Aaron Hillegass
$60 Books on forming an LLC
$50 LLC filing
$30 Business checks
$50 Business cards (not necessary, but nice to have)
$40 iTunes gift certificates for promotion
$100 Google AdWords advertising
$230 iPod touch

$700 Total

I think that covers all the actual expenses. Costs are rounded up. I've owned Macs for a long time so I wouldn't count that. I already owned an iPhone as well, but I recently bought an iPod touch so I have a testing device I can "abuse" a bit more (deleting and restoring as necessary).

For me the "real" expense was the time it took to learn Objective-C/Cocoa and create my app. I started out taking my time, but once someone released a similar app I had to put my graphic design business on hold for about a month. The app easily paid for the work I missed out on, but it was a struggle to pay the bills for a couple of months while I waited for the money to come in.

The advertising money was basically experimenting, that's something I don't have a lot of experience with. I was paying more per click than my app actually costs, so I didn't want to spend too much on it (yet, anyway). I do plan on putting more into it at some point, but I wanted to improve my app more before I spent too much promoting it.

pilotError
Nov 10, 2008, 08:28 AM
Missing a lot of incidentals. Nobody is an expert in everything, the business side of things is where the expense comes in.

$1000 / yr - Accountant, to create your quarterly Fed and State taxes, among the other 10+ filings you have to create. The nice thing about having an accountant is that you can write off your startup costs against the income if you have existing assets (Desks, Furniture, Computers, etc.). I'm in NY, everything is expensive here. You may be able to get it cheaper.

Don't forget Unemployment / Disability Insurance if you pay yourself or have any employees.

$300 - $500 to create an LLC unless you buy the books and do the homework to do it yourself. I'm more comfortable having the lawyer do it, but you can actually apply using on-line web sites that manage it for you. This will protect you from losing your house / car / dog in the event you do happen to get into trouble.