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Business Planning for Web Projects

Important Considerations When Hiring A Web Application Development Company

Common Business Practices and Issues

byOnlline Infotech

Whether you are starting a new web application project or require revamping or upgrading your current project, not only will you need to consider your current circumstances, you will also need to plan for future business growth and site maintenance.

One of your most important considerations should be to select a web application developer that you can partner with and grow. I do not mean literally to "partner" as a business partner, but instead, a good client / vendor relationship partner.

Frequently, I come across prospective clients that have hired an independent contractor web developer or an off-shore web development company who left their project unfinished and in limbo; and to add to that injury, the programmer did such sloppy coding that working on his code is almost impossible. In most cases, I tell the client that it would be less costly and quicker to start the project from ground up rather than trying to fix and work on the badly put together web application.

Common issues that arise from hiring the wrong web application developer:

  • It is very common that developers are excited at the start of any project and become bored at about two-thirds of the project's completion, at which they ended up abandoning the work. This is a very common occurrence when hiring an independent developer rather than a company.
  • The development company did such sloppy coding that it is almost impossible for another company to take over the development project or fix the code.
  • The development company put together a poorly designed database and wrote SQL queries that are not efficient or optimized. This will slow down the application's performance or bring the site to a halt after a small number of concurrent connections.
  • The Web Application is structured in a way which makes it very difficult for designers or HTML coders to work on the project.
  • There are not any security considerations when putting together the web application. This is a big issue specially for ecommerce applications where customer's sensitive information is stored.

Another consideration is to determine the business model of the company that you are hiring. Many web development companies focus on mass producing web sites. Those type of companies are not interested in a continuous business relationship. They are more interested in ending your project and starting on the next project.

Why is it important to hire a web development company who is interested in continuous support of your web application?

With any web application or software development, there will always be a need for improvement and version upgrades. (We have all experienced this with most desktop software. An example of this is Windows 3.1, 95, 98, 2000, XP, Vista and Windows 7.)

Having a strong partner in the continuous development, maintenance and support of your web application is important for many reasons such as:

  • Staying current with the latest technology and design
  • Being able to scale with the growth of the company's business development
  • Keeping a competitive edge
  • Taking advantage of the development companies other areas of expertise such as SEO / SEM, motion media, branding and usability

Items to look for relating to business operations and practices:

  • Company's policy regarding licensing and ownership of the final program code
  • Company's financial stability and number of years that the company has been in business
  • Company's business model - mass producing templated type work or custom quality work with continuous support
  • Company's experience in quality programming, design, usability and search engine optimization (SEO)
  • If the company is outsourcing work to off-shore or independent developers. (adding the third party may complicate the communication and control over your project)
  • Company's experience in handling and producing large projects
  • Being able to pay a visit and meet the company owner(s) or management face-to-face is an advantage

Items to look for relating to company's service and experience:

  • Architectural Pattern Development and / or Structured Programming
  • Coding Guidelines and Standards
  • Maintainable / Manageable Code
  • Usability
  • Design, Branding and Marketing
  • Performance, Load and Stress Testing
  • Version Control
  • Load Balancing
  • Managed Hosting and Server Management

Other considerations regarding coding:

Quality coding should also be an important aspect in selecting a web application development company. To read more on quality coding:
http://www.comentum.com/how-to-hire-web-application-development-company.html

related articles:

  • How to Hire a Good Web Application Development Company
  • Web Development Cost Comparison
  • Guide to Web Application Development
  • Web Application Development Process
  • Web Application Development Services

 

Web Development Cost / Rate Comparison - Different Types of Custom Web Application Companies

Comparison of Costs and Benefits

byOnlline Infotech

You have sent several RFPs (Request For Proposals) and have received a few different proposals ranging from $5000 to $300,000, from several web development companies. You are puzzled and wondering why there are such a large ranges in cost. I may have a few clues and good explanation regarding the large gap in development cost.

There are different types of development companies with different business models, which creates different cost structures. Below are a few examples:

"Extravagant Class" Custom Web Development Companies

I cannot classify these companies based on the number of employees or company sales or finances; however, I can classify them based on their luxurious building, excessive spending and highly paid employees or executives.

These types of companies tend to only do business with a certain class of clients who are willing to spent at least $200K on any project. Their average web application development cost is around $500K and their staff or contractors' salary is in the six figure plus range.

Their proposals are usually based on a lot of fluff with the average development rate of $400. per hour.

These types of companies focus on custom development. Although they are highly organized and it is almost guaranteed that your project is going to be completed, they tend to maneuver or progress slowly and their development process requires an immense amount of fluff.

For large companies who have lots of extra money to waste, these types of development companies will be a perfect fit.

In addition, the persons who help make the decision to select the large development company do not have to worry about their job or the decision they made; if the project goes wrong, they can always say, "We picked them because they were the largest in the field like us so we did not expect to experience any sort of issues!"

"Moderate Class" Custom Development Companies

These types of companies tend to have a moderate and reasonable spending and operation. Their average number of employees are in the 10-20 range.

Their proposals are usually based on the estimated hours at the development rate ranging from $90 - $150 per hour.

These types of companies may or may not be organized, depending on the quality of their company management. They tend to be able to move quickly on any project with a faster development process.

When you hire this type of company, the result of your project is based on the company owners or management's ethical standards or honesty, experience in development, design ability, usability awareness, SEO practices, development specialty and other relating factors.

In my opinion, a web development company in this category makes a perfect choice as a long term developer and supporting partner for a company's project, small to large, as long as the company has the following dynamics:

  • Has set forth high ethical standards
  • Has considerable experience in large scale development projects (with quality programming)
  • Has considerable experience in design, usability and search engine optimization

"Small Class" Development Companies

These types of businesses run their operation on a very low budget and usually has only 2-3 workers including the business owners / partners in the company.

Their proposals are usually based on estimated hours at the development rate ranging from $50 - $150 per hour.

These types of businesses are usually not organized. They cannot take on a large development project.

When you hire this type of company, the result of your project is based on the company owners or management's ethical standards or honesty, experience in development, design ability, usability awareness, SEO practices, development specialty and other relating factors.

These types of development companies are a perfect fit for servicing small budget business clients, for example, a small one location - mom and pop ice cream shop.

Independent Contractor Developers

Independent contractors have their own different class of financial expectations, and their rate is based on their knowledge and experience and / or other factors such as cost of living, financial needs and spending habits.

Their rate can range anywhere from $50 - $250 per hour.

The level of organization and / or the ultimate result of a project engagement varies based on the person's development and business experience, and years in the business. It also highly depends on the developer's ethical standards.

If an independent contractor already has a salaried job and provides development on the side, there is a good possibility that he / she will get burned out or run into time constraints, and will quit the contract work in the middle of the project. In these types of circumstances, contacting the developer can become difficult and sometimes result in even the loss of the project files.

Many designers and developers start their independent contracting business and end up quitting their business within the first year or two because they either become burned out or realize and encounter the usual challenges of running a small business.

In my experience, if an independent contractor does not have at least five years of experience in his / her independent contracting business, there is a good chance that the business and the pending projects will end up in limbo.

An experienced independent contractor developer will not be able to take on a large development project single handedly; however, if he / she is experienced in the development field, he / she may be a good candidate for consulting.

Low Cost, Mass Producing Template Level Off-shore Development Companies

These types of development companies concentrate on mass producing template type web sites.

Their rate can range anywhere from $35 - $90 per hour.

In my opinion, these types of development companies in many cases do not practice high ethical standards. Their business model is based on mass production with very little focus on their client's success.

These companies would not make a good choice for developing a custom web application. Their ideal clients are the speculators who just need to put together a quick web application without doing any homework or planning. In most cases, those projects end up failing because there was not a lot of business and marketing intelligence and / or due diligence that went into the concept and planning of the project in the first place.

Usually there isn't any project support or maintenance available from the mass producing development companies.

Many of those companies may use quick and easy resources available in order to mass produce projects. This includes patching together any available code libraries (good or bad) and / or outsourcing to low cost off-shore companies.

related articles:

  • Important Considerations When Hiring a Web Application Development
  • How to Hire a Good Web Application Development Company
  • Merchant Accounts and Payment Gateways
  • Guide to Web Application Development
  • Web Application Development Process
  • Web Application Development Services

 

Web Development Cost / Rate Comparison - Different Types of Custom Web Application Companies

Comparison of Costs and Benefits

by Onlive Infotech

You have sent several RFPs (Request For Proposals) and have received a few different proposals ranging from $5000 to $300,000, from several web development companies. You are puzzled and wondering why there are such a large ranges in cost. I may have a few clues and good explanation regarding the large gap in development cost.

There are different types of development companies with different business models, which creates different cost structures. Below are a few examples:

"Extravagant Class" Custom Web Development Companies

I cannot classify these companies based on the number of employees or company sales or finances; however, I can classify them based on their luxurious building, excessive spending and highly paid employees or executives.

These types of companies tend to only do business with a certain class of clients who are willing to spent at least $200K on any project. Their average web application development cost is around $500K and their staff or contractors' salary is in the six figure plus range.

Their proposals are usually based on a lot of fluff with the average development rate of $400. per hour.

These types of companies focus on custom development. Although they are highly organized and it is almost guaranteed that your project is going to be completed, they tend to maneuver or progress slowly and their development process requires an immense amount of fluff.

For large companies who have lots of extra money to waste, these types of development companies will be a perfect fit.

In addition, the persons who help make the decision to select the large development company do not have to worry about their job or the decision they made; if the project goes wrong, they can always say, "We picked them because they were the largest in the field like us so we did not expect to experience any sort of issues!"

"Moderate Class" Custom Development Companies

These types of companies tend to have a moderate and reasonable spending and operation. Their average number of employees are in the 10-20 range.

Their proposals are usually based on the estimated hours at the development rate ranging from $90 - $150 per hour.

These types of companies may or may not be organized, depending on the quality of their company management. They tend to be able to move quickly on any project with a faster development process.

When you hire this type of company, the result of your project is based on the company owners or management's ethical standards or honesty, experience in development, design ability, usability awareness, SEO practices, development specialty and other relating factors.

In my opinion, a web development company in this category makes a perfect choice as a long term developer and supporting partner for a company's project, small to large, as long as the company has the following dynamics:

  • Has set forth high ethical standards
  • Has considerable experience in large scale development projects (with quality programming)
  • Has considerable experience in design, usability and search engine optimization

"Small Class" Development Companies

These types of businesses run their operation on a very low budget and usually has only 2-3 workers including the business owners / partners in the company.

Their proposals are usually based on estimated hours at the development rate ranging from $50 - $150 per hour.

These types of businesses are usually not organized. They cannot take on a large development project.

When you hire this type of company, the result of your project is based on the company owners or management's ethical standards or honesty, experience in development, design ability, usability awareness, SEO practices, development specialty and other relating factors.

These types of development companies are a perfect fit for servicing small budget business clients, for example, a small one location - mom and pop ice cream shop.

Independent Contractor Developers

Independent contractors have their own different class of financial expectations, and their rate is based on their knowledge and experience and / or other factors such as cost of living, financial needs and spending habits.

Their rate can range anywhere from $50 - $250 per hour.

The level of organization and / or the ultimate result of a project engagement varies based on the person's development and business experience, and years in the business. It also highly depends on the developer's ethical standards.

If an independent contractor already has a salaried job and provides development on the side, there is a good possibility that he / she will get burned out or run into time constraints, and will quit the contract work in the middle of the project. In these types of circumstances, contacting the developer can become difficult and sometimes result in even the loss of the project files.

Many designers and developers start their independent contracting business and end up quitting their business within the first year or two because they either become burned out or realize and encounter the usual challenges of running a small business.

In my experience, if an independent contractor does not have at least five years of experience in his / her independent contracting business, there is a good chance that the business and the pending projects will end up in limbo.

An experienced independent contractor developer will not be able to take on a large development project single handedly; however, if he / she is experienced in the development field, he / she may be a good candidate for consulting.

Low Cost, Mass Producing Template Level Off-shore Development Companies

These types of development companies concentrate on mass producing template type web sites.

Their rate can range anywhere from $35 - $90 per hour.

In my opinion, these types of development companies in many cases do not practice high ethical standards. Their business model is based on mass production with very little focus on their client's success.

These companies would not make a good choice for developing a custom web application. Their ideal clients are the speculators who just need to put together a quick web application without doing any homework or planning. In most cases, those projects end up failing because there was not a lot of business and marketing intelligence and / or due diligence that went into the concept and planning of the project in the first place.

Usually there isn't any project support or maintenance available from the mass producing development companies.

Many of those companies may use quick and easy resources available in order to mass produce projects. This includes patching together any available code libraries (good or bad) and / or outsourcing to low cost off-shore companies.

related articles:

  • Important Considerations When Hiring a Web Application Development
  • How to Hire a Good Web Application Development Company
  • Merchant Accounts and Payment Gateways
  • Guide to Web Application Development
  • Web Application Development Process
  • Web Application Development Services

FAQ, Comparison and Guide to Merchant Accounts and Payment Gateways

Who is a Merchant?

A Merchant is a business who accepts credit cards.

What is a Merchant Account?

A Merchant Account is a type of bank account that will provide businesses with the capabilities to accept credit and debit cards.

What is Merchant Account Service?

Merchant Account Services is to service a Merchant Account including Payment Processing, sales and customer service, technical support, providing the monthly statements, etc..

Do I need to qualify for opening a Merchant Account?

Yes - Merchant Account providers will perform a personal credit check on owners of small businesses and will inquire about business particulars such as type of business, products or services, and sales information in order to provide Merchant Account.

There are some exception to that rule. Some organizations may allow you to use their Merchant Account to accept credit card. They will charge a larger fee or discount rate in order to justify the risk. They may also hold on to the funds for a longer period in order to guarantee that there is no issues with the transaction.

Also, PayPal may not require a credit check on personal accounts.

Bare in mind that if a Merchant Account Provider does not require a Credit Check, it will find a way to reduce the risk by providing a very small credit limit or holding on to the charges for a longer period in order to allow time for complains and returns.

Is there a "Credit Limit" on the amount of charges per month?

Yes - It is important to note that when you open a Merchant Account, you are assigned a credit limit. This is the monthly limit on the amount of credit card charges that you can accept.

If you are predicting to have for example on average $100K of credit / debit charges per month, you want to sign up with a Merchant Services that is capable and is willing to extend you $100K per month limit on allowed charges.

Why there is a "Credit Limit"?

Because on many occasions, dishonest Merchants sold inferior products, collected and pocketed the charges and ran away. Consumers called the Credit Card companies to complain and get their money back, but it was too late, the dishonest Merchant filed bankruptcy and laundered the money.

What is Payment Gateway?

If you have an online shopping cart and need to take credit / debit card and process it online in real-time, you will need a Payment Gateway service in addition to an Internet Merchant Account. This is because the Shopping Cart Applications are not allowed to communicate (send and receive the transaction information) to Payment Processors directly for security reasons. A Payment Gateway service company has gone through the extensive and lengthy process of getting approved and pass the requirement to communicate with Payment Processors. A Payment Gateway company acts as the mediator for communicating the transaction information between the Shopping Cart Application and Payment Processors.

What is Payment Processing?

Payment Processing includes the following procedures:

  • Receiving transaction information from Merchants via phone line or Internet
  • Sending transaction information to the corresponding financial institution
  • Receiving approval / declined information from corresponding financial institution
  • Sending approval / declined information to Merchant
  • Upon approval, settle the transaction from the corresponding financial institution
  • Deposit funds into the merchant's bank account

What are the different types of Merchant Accounts?

Retail Merchant Account — This type of account is for retail store businesses where customers present and swipe their credit / debit cards. The rates for retail type merchant account is usually lower because there is less risk for fraudulent transactions. Some merchants make a mistake of signing up for a retail merchant account without having a retail store in order to get a better rate. However, if the credit / debit card is not present or swiped, the payment processor automatically tags the transaction as a phone or online transaction which will be charged at a substantially higher rate, even higher than a Mail Order Telephone Order / Online Merchant Account (MOTO Merchant Account).

Mail Order / Telephone Order (MOTO) Merchant Account — This type of account is for businesses which customers do not present and swipe their credit / debit cards. The rates for MOTO type merchant account is usually higher because there is more risk for fraudulent transaction.

Internet Merchant Account — This type of account is similar to Mail Order / Telephone Order (MOTO) Merchant Account above (with similar rates, terms and agreements). Some Merchant Service Providers will use the same class of account for Internet and Mail Order / Telephone Order (MOTO) accounts and some Merchant Service Providers will use a different class of account with a more customized services tailored toward an Internet Account.

Also, most Internet Merchant Accounts will require a Payment Gateway Services in order to process credit / debit card payment in real time when using a Shopping Cart Application. This is because the Shopping Cart Application is not allowed to communicate with Payment Processors directly (for security reasons) so the Payment Gateway Company acts as the mediator to communicate (send and receive) the transaction information to Payment Processor.

Who are the Payment Processors / Acquirers?

There are only a very few specialty financial institutions and banks that provide payment processing. Payment Processors are very large companies that usually like to stay in the background and focus on Payment Processing rather than dealing directly with consumers, small businesses or Merchants. They have reseller or partnership agreements with Banks, Independent Sales Organizations (ISOs), or other companies who can resell their services. However, sometimes you can order Merchant Services directly by visiting Payment Processor's site, you may not get the best deal or the right Merchant Account due to the fact that there is very little effort is put into selling directly to small businesses by large Payment Processors.

Below are the top Payment Processors / Acquirers:

  • Chase Paymentech (subsidiary of JPMorgan Chase)
  • First Data Merchant Services
  • BA Merchant Services (subsidiary of Bank of America, NA)
  • Elavon (subsidiary of U.S. Bancorp.)
  • Heartland Payment Systems
  • Global Payments
  • Fifth Third Processing Solutions
  • RBS WorldPay (subsidiary of Royal Bank of Scotland group)
  • First National Merchant Solutions (FNMS) (subsidiary of First National Bank of Omaha)
  • TransFirst
  • Alliance Data

Who provide Merchant Account Services?

This industry is very complicated - there are so many third parties and different service providers involved that would make getting a merchant account confusing and cumbersome.

Merchant Account Services are provided by one of the following organizations:

  • Merchant Services division of large banks (for example: Wells Fargo Merchant Services or Bank of America Merchant Services)
  • Independent Sales Organizations (ISOs) or Member Service Provider (MSP). These organizations are the resellers of one or more of payment processors. This category is the largest category of Merchant Services providers. Some large ISO companies take larger part in providing the overall merchant services to Merchants. For example, a various ISO companies provide underwriting, qualifying the Merchants, take liability for Merchant's default, furnishing monthly statements, terminal deployment, support in addition to sales functions. (example of those companies are Intuit Quickbooks Merchant Services or United Bank Card Merchant Services.
  • Independent Contractor Agents that have contracted with an ISO / MSP to perform sales for those companies.
  • Banks or other Financial Institutions who partner or have a contract with a payment processor. (for example: Union Bank partners with Elavon or CitiBank or Wells Fargo contracts with First Data)
  • Other companies who partner or have a special contract with a Payment Processor or Merchant Service Provider to provide or Sell Merchant Services. (for example: Costco partnering with Elavon to sell Merchant Services to small businesses)
  • Payment Gateway Companies who partner or have ISO agreement with a Bank or Credit Card Processor to provide Merchant Services (for example: Authorize.net)

Who do I recommend for Merchant Account Services?

It depends on your needs. Each Merchant Service Providers have their own advantages. Below are a few selective Merchant Services and my thoughts about them:

Authorize.net — Authorize.net has been providing Payment Gateway services for ecommerce / shopping cart application Merchants since 1996.

In my opinion, Authorize.net is best suited for small to mid-size companies that are needing ecommerce / shopping cart applications.

Here are the advantages Authorize.net:

  • The most experience in ecommerce / shopping cart application industry
  • Good customer service and support for troubleshooting charge issues
  • Reasonable rates
  • More lenient and easier to qualify
  • Easy / convenient online application
  • Ideal size for servicing small business service - not too large or too small
  • Provides both Merchant Account and Payment Gateways Services
  • Easy to setup with most Ecommerce / Shopping Cart Applications

Comentum is a Partner / Reseller of Authorize.net services. If you would like to sign up for Authorize.net Merchant or Gateway, please click: Authorize.net Online Application

Costco / Elavon — Costco / Elavon offers a very competitive rates for their Merchant Services. They are most experience in retail type Merchant Accounts. Here are the advantages of Costco / Elavon:

  • Very Competitive Rates
  • The most experience in retail industry
  • Good customer service
  • Provides both Merchant Account and Payment Gateways Services

Intuit / Quickbooks Payment Solutions / Merchant Service — Intuit / QuickBooks Payment Solutions is ideal for businesses that use QuickBooks for their accounting software and using QuickBooks Merchant Services will help automate the importing or automatic entries of all transactions.

For example, if a business takes recurring monthly payment and also uses QuickBooks accounting software, QuickBooks merchant automatically imports all recurring transactions into QuickBooks accounting software or if a mail order business uses QuickBooks accounting software and gets several credit card orders per day that can easily be entered into QuickBooks once, it makes sense to use QuickBooks accounting software in conjunctions with QuickBooks Merchant Services.

However, for ecommerce and shopping cart applications, QuickBooks Merchant Services is not as ideal because there is no automated methods from QuickBooks to import the transactions from a shopping cart application to QuickBooks software.

Also, Intuit / QuickBooks acquired Innovative Merchant Solutions (IMS) in 2003 which gave Intuit the ability to enter the Merchant Services Market. IMS's focus has been mostly on retail and mail order business and not so much focus on Internet transactions or ecommerce / shopping cart systems.

Here are my thoughts on Intuit Merchant Services:

  • Ideal for Merchants that use QuickBooks accounting software and require a large number of transactions integrated or imported to QuickBooks
    (not so ideal for ecommerce / shopping cart applications that require automatic importing to QuickBooks using QuickBooks accounting software.
  • Do not have as much experience on ecommerce / shopping cart applications.

Wells Fargo Merchant Services — Wells Fargo Merchant Services is ideal for mid-sized to large business that require a solid bank that can provide a large credit limit to allow for substantial amount of credit charges per month.

Wells Fargo Merchant Services also has a good experience in Internet Sales and Ecommerce / Shopping Cart applications.

Wells Fargo Merchant Services does not use their own Payment Gateways for Internet / ecommerce type Merchants. They use Authorize.net Payment Gateway.

Here are the advantages for Wells Fargo Merchant Services:

  • Ideal for Merchants that require large credit limit for substantial charges
  • Good experience in ecommerce / shopping cart application industry
  • Good customer service and support for troubleshooting charge issues
  • Reasonable rates

 

:: Business Plan for Web Design Projects Plans ::


Select the plan that optimizes your sales and which comes under your budget and let your business boom and your profit graph rise. With various packages we provide you full support and best quality work so as to fulfil your goals. Below is the list of our pricing as per the packages. -

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   SILVER
   50,000
 Rs. 3000 + Service Tax
   GOLD
   100,000
 Rs. 5000 + Service Tax
   PLATINUM
   200,000
 Rs. 9000 + Service Tax
   CORPORATE
   500,000
 Rs. 20000 + Service Tax
Windoes web hosting india
  • Service Tax Applicable (10.30%)
  • No hidden Cost
  • Validity of each plan is Current month only