Reminds me of a funny story. I was subcontracting to a friend to do on-site computer work at his clients' offices. One guy was a bit of a pain-in-the-ass. This guy also recorded every conversation he had with anyone over the telephone.
So, my friend's secretary calls his office and asks to speak to me. She then asks me how the pain-in-the-ass is behaving and if he ever got the bug out of his ass. I just had to listen silently as I knew he was recording every call. LOL I never found out whether he listened to that call or not, but he continued to use us for a while after that. --- On Mon, 4/13/09, Gil Hale RR <mrgmh...@rochester.rr.com> wrote: > From: Gil Hale RR <mrgmh...@rochester.rr.com> > Subject: RE: [NF] Yearly support fees vs. hourly fees > To: profox@leafe.com > Date: Monday, April 13, 2009, 4:46 PM > We have a similar tax thing out here > in NY state, where a service contract > r software license is not taxable. But, each of my > clients, when told > about that, have opted to have me charge the Sales Tax lest > they get > audited. In NY it is not unusual for one entity (me, > for instance) to be > subjected to an audit. Then when there is blood in > the water they would go > ofter the NY based clients for failure to pay Use Tax when > they "should > have", even if the transaction is not taxable as with tech > support or > license fees. It is government sponsored extortion, > where companies pay up > rather than go through the costlier option of fighting a > full blown > audit(car dealerships, juicy targets). It is really a > shame, but I guess > collectively we see it as the cost of doing business within > the state > criminal enterprise known as NY. > > I have, as a direct result of some of these shakedown > tactics, begun to > record every call between myself and any tax authority (Fed > or NY), > financial institution, insurance company, or vendor. > You would be amazed at > how quickly I have turned matters around when I advise that > I have a legal > copy of the conversation on such and such date where I was > told thus, > therefore... $99 for the software, $99 for the USB > voice modem. Saves the > .wav files on the hard drive, managed within a simple > database, had Caller > ID, DateTime stamp, length of conversation, and allows me > to make memos. > With some states all parties in a conversation must be > notified before a > recording can be made (CA is one of them). But for > the vast majority it is > single party notification, and I am that one party > <g>. NY is such a state, > and I do record a lot of stuff, just in case. > > Gil > > > -----Original Message----- > > From: profoxtech-boun...@leafe.com > [mailto:profoxtech- > > boun...@leafe.com] > On Behalf Of KAM.covad > > Sent: Monday, April 13, 2009 4:22 PM > > To: profoxt...@leafe.com > > Subject: Re: [NF] Yearly support fees vs. hourly fees > > > > I think this is a great idea if it works for you and > your clients will > > pay. > > > > If you are located in California, there is one thing > to be aware of. If > > you require a monthly/yearly/whatever payment, it is > considered to be a > > sale and is taxable. If your support is optional then > it is labor and > > not taxable as long as it is handled by > phone/email/etc. This could be > > a major consideration because the State will not go to > your client to > > get any back taxes. We have been through two audits > and had to deal > > with this issue. Another thing to consider is that if > you send the > > client anything tangible (floppy disk, cd, dvd, paper > report, etc) then > > your support is taxable for that month (if you bill > monthly). If your > > client downloads updates and reports, etc then it is > not taxable. I am > > not a lawyer, just someone who has been through some > terrible sales tax > > audits. One lasted over 6 months. > > > > > > > > ----- Original Message ----- > > From: Gil Hale RR > > To: profox@leafe.com > > Sent: Monday, April 13, 2009 8:30 AM > > Subject: RE: [NF] Yearly support fees vs. hourly fees > > > > > > I do not sell annual or other maintenance plans, and > avoid that kind of > > terminology like the plague. It makes it too > easy for folks to unplug > > a > > nice revenue stream. I do not sell my software > solutions either. I > > provide > > "maintenance" (support) on a No Additional Charge > basis! What the > > hell? > > Read on... > > > > I license my software solutions with an initial > setup/config fee which > > is > > minimal - really minimal. Sometimes no initial > fees at all. Then I > > charge > > a reasonable monthly license fee, where over the > course of a few years > > I > > recoup what I would have gained with an initial full > fee for a single > > pay > > billing. But, for the remaining months/years I > keep receiving these > > monthly > > payments for a client having the right to keep using > my software, and > > gaining income benefit far in excess of its monthly > license fee. I > > also > > provide support/maintenance on a No Additional Charge > basis for clients > > paying me a monthly recurring fee. I can come in > very inexpensively > > for my > > clients with respect to how their cash flow gets hit, > and in the longer > > run > > I end up generating far more revenue from my > offerings. For instance, > > I > > have one client who has been paying me $1,000 per > month for 43 > > dealerships > > to use my software (very inexpensive on a per store > basis). They have > > been > > with me since 2001, just about 8 years, 96 > months. Do the math. I > > could > > never have charged them that kind of money for that > solution, despite > > it > > being well worth the investment. This kind of > arrangement makes my > > software > > cost effective on both a monthly cash flow and a > return on investment > > basis > > for my clients. And it gives me monthly > incentive to keep doing the > > best > > possible job I can for them. When they request > upgrades or consulting > > I > > handle those items on a no additional charge basis, > whether it is > > directly > > related to my solution or not. For all the > months I have had to do > > nothing > > for the income as they keep on using it internally > with their own > > personnel, > > a few weeks here and there for special projects is > fine with me <g>. > > The > > name of the game now-a-days, more than ever before, is > client retention > > and > > revenue stream protection. This is how I am > accomplishing it, > > providing > > excellent solutions for beyond reasonable pricing, and > not trying to > > nickel > > and dime a client at every turn. I get my > recurring revenue stream > > from > > multiple clients, they get my attention whenever they > need anything > > extra - > > plus make and/or save money using my software in > excess of the revenue > > they > > provide me. If they begin to clip services in a > tough economy I am > > betting > > I will be the last vendor standing as I not only make > them money, I ask > > for > > relatively little in return. But when I sum the > income from all > > clients > > each month I find I am doing just fine, without having > to chase the > > next > > dollar while needing to ignore my current clients in > the process. > > > > Of course, one can't simply flip a switch and migrate > to this kind of > > model > > unless there is enough cash on hand to survive the > initial lean months > > as a > > core client base is built. I was lucky in being > able to bide my time > > as I > > built my business around this model. I know > another FoxHead who chimes > > in > > once in a while in ProFox who has begun to adopt this > kind of business > > model. He has a full time (or more <g>) > job, and can afford (from what > > I > > can tell) to take his time in building up his client > base on the > > recurring > > fee and minimal initial charge business model. > If he continues to do > > an > > excellent job for his clients, and he grows his > business a bit at a > > time, > > keeps his overhead low (work out of the house), his > "side income" may > > well > > exceed his employment income in time. Other > folks may have a spouse > > whose > > income can help with the reduced income as one > transitions from full up > > front billing to a smaller initial billing with > recurring fee billing > > model. > > For others yet it may have to be a matter of offering > the smaller > > initial > > fee with recurring fees on a situational basis for > some offerings, but > > not > > all. > > > > It is not for everyone, but from where I stand this is > the ultimate > > win-win > > for myself and my clients. > > > > My two cents... > > > > Gil > > > > > -----Original Message----- > > > From: profoxtech-boun...@leafe.com > [mailto:profoxtech- > > > boun...@leafe.com] > On Behalf Of MB Software Solutions General Account > > > Sent: Monday, April 13, 2009 11:04 AM > > > To: profoxt...@leafe.com > > > Subject: [NF] Yearly support fees vs. hourly > fees > > > > > > Question for those of you who sell yearly > maintenance/support > > contracts > > > on > > > your software: suppose a customer says to > you: "I don't want to buy > > > the > > > yearly maintenance contract. I only want to > pay for the hours where > > I > > > actually need you to fix something for us." > (...because he's > > thinking > > > that he'll have little or no problems for the > year, given the > > > software's > > > solid track record.) > > > > > > How do you respond to such a customer? > > > > > > tia, > > > --Mike > > > > > > > > > > > > > > > > > > > > > > [excessive quoting removed by server] > > _______________________________________________ > Post Messages to: ProFox@leafe.com > Subscription Maintenance: http://leafe.com/mailman/listinfo/profox > OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech > Searchable Archive: http://leafe.com/archives/search/profox > This message: > http://leafe.com/archives/byMID/profox/01a301c9bc78$e5d070b0$b17152...@rr.com > ** All postings, unless explicitly stated otherwise, are > the opinions of the author, and do not constitute legal or > medical advice. This statement is added to the messages for > those lawyers who are too stupid to see the obvious. > _______________________________________________ Post Messages to: ProFox@leafe.com Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/412830.25237...@web31401.mail.mud.yahoo.com ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
