The document discusses considerations for transitioning to a commercial venture, especially in the context of the WordPress plugin market, highlighting factors like revenue, customer conversion, and types of licenses. It includes a case study on a specific theme, illustrating potential profits and detailed expenses such as transaction fees, marketing, and staff salaries. The document emphasizes the importance of customer service and strategic planning for long-term success.

1. Can You Go Commercial?
What it’s Worth & What to Consider
Garth Koyle
@eventespresso | eventespresso.com
Disclaimer: Presentations are intended for educational purposes only and do not replace independent professional judgment. Statements
of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or
position of Event Espresso, LLC, its cosponsors, or its committees. Event Espresso does not endorse or approve, and assumes no
responsibility for, the content, accuracy or completeness of the information presented. Attendees should note that sessions are audio-
recorded and may be published in various media, including print, audio and video formats without further notice.

2. Event Espresso, LLC. Copyright 2011

3. MY BACKGROUND
Event Espresso
Event Registration and Ticketing Management
Plugin for WordPress
• 2009 Free
• 2010 Commercial
• 2011 Business plan competition, $40,000
grand prize winners
• Forecasted 2011 revenue to within .02%
• Staff
• Three support staff
• Four developers

4. YOUR BACKGROUND
In the WordPress Repository:
~ 1,600 Themes (49+M downloads)
~ 30,000 downloads/theme
~ 20,000+ Plugins (309+ M downloads)
~ 15,000 downloads/plugin
Are you one of them?
Why did you create?

5. WE CREATE PRODUCTS TO SATISFY NEEDS
Customer Need WP Characteristic
Affordability Unlimited Use & Free
Autonomy Ownership and Scalability
Capability

6. WHAT IS IT WORTH? – HOW MANY CUSTOMERS?
Affordability
Event Espresso, LLC. Copyright 2011

7. WHAT’S IT WORTH?
It’s NOT ALL about the money, but what’s it worth?
Consider Revenue: Consider Expenses*:
• Number of Customers • Affiliate Commissions
• Products/Services to Offer • Transaction Fees
• Pricing • Advertising
• Licensing • Accounting/Legal
• Contractors/Staff
• Website Systems
• Utilities
• Owner Draws/Salary
*Sales relationship to expenses is non-linear

8. REVENUE – How many customers?
CASE STUDY: THEME CHECK
Downloads: ~ 623/wk 10%
Current Version Adoption: ~ 95%
Current Users: 32,400 * .95 = ~ 30,780 *Approximately 10%
of customers who
Conversion from Free to Paid: ~ 10%* download the free
version may
Awareness > Download > Installation > Usage > Upgrade. download the paid
Depends on features of paid version, reminders, prequalification. version.
Estimated Paying Customers: ~ 30,780 * .10 = 3,078
If you don’t have a plugin now use existing plugins as proxy.

9. REVENUE – What type of license will you offer?
License Types
• GPL – required to be in WP repository
• Proprietary
Service Types:
One-time fee, monthly fee, annual
fee, unlimited, freemium, subscription, etc.

10. REVENUE – What price will you charge?
CASE STUDY: THEME CHECK
Potential Services: $100
• Personal Theme Fixing: $50
• Developer Theme Fixing/Upgrade: $100* *Approximate
average revenue per
• Custom Theme Design: $8,000 customer.
Potential Products:
• Premium Themes: $50
Total Revenue: $307,800

11. EXPENSES – Affiliate Commissions
Affiliate marketing programs:
• Percent of sale 5%
• Percent of sale + coupon
• Coupon only Approximately 5% of
revenue should be
budgeted as
Consider your terms of service commissions to
affiliates
regarding affiliates using your
brand in SEM advertising.

12. EXPENSES – Transaction Fees
Transaction fees are similar but
the banks are very different; e.g.: 4%
• Payment Gateway ~ 3%
• E.g. PayPal/Authorize Approximately 4%
revenue should be
• Merchant Account ~ 1% budgeted as
transaction fees
• E.g. Wells Fargo
• Use an established bank that offers good
online access/services

13. EXPENSES – Advertising/Marketing
You will need to promote your
products. 5%
• Email Marketing
• Search Engine Advertising Approximately 5% of
revenue should be
• Trade publications budgeted for
Advertising/Marketi
ng in addition to
• Free demos/trials affiliates for a total
of about 10%.
• Promotions

14. EXPENSES – Accounting/Legal
It’s worth dotting your “i”s and
crossing your “t”s. 2%
• Business Structure
• Co-founder Approximately 1%
revenue should be
• Non-Disclosure budgeted for
accounting service
and legal protection.
• Non-Compete
• Accounting
• Trademark

15. EXPENSES – Staff/Contractor Salaries
The largest portion of your budget.
• Support ~ 1 FTE/2k new customers 35%
• Development ~ .5 FTE/2k new
customers Approximately 50%
revenue will have to
• Owner Draws ~ remainder be budgeted to pay
yourself, staff and/or
contractors.

16. EXPENSES – Website Systems
The systems you use today will affect
your business tomorrow. 1%
Systems Include:
Blog, forums, live Approximately 1%
chat, ticketing, email, affiliates, invoicing, a/ revenue will have to
be budgeted for
b testing, project and code setting up and
maintaining your
management, customer website and systems.
surveys, documentation, videos, API, etc.

17. EXPENSES – Other
The miscellaneous can add up.
• Hosting 8%
• Telephone service
• Computer hardware/software Approximately 8%
revenue will have to
be budgeted for
• Traveling to WordCamps  miscellaneous stuff.

18. EXPENSES – Total
Commissions: 5%
Transaction Fees: 4%
Advertising/Marketing: 5% 50%
Accounting/Legal: 2%
Contractor/Staff Salaries: 25%
Website Systems: 1% Approximately 50%
revenue will have to
Other: 8% be budgeted for
Total: 50% expenses.
CASE STUDY: THEME CHECK
TOTAL EXPENSES: ($153,900)

19. PROFIT (LOSS) – WHAT’S IT WORTH?
CASE STUDY: THEME CHECK
• TOTAL REVENUE: $307,800 50%
• TOTAL EXPENSES: ($153,900)
• NET INCOME (LOSS)*: $153,900 Approximately 50%
revenue can have to
be budgeted for
• To pay yourself or reinvest your income and
reinvestment.
*Assumptions: full-time dedication, getting the proper help, ratio of
customers that download the free version and then buy the paid version holds
true, etc.

20. OTHER CONSIDERATIONS – Customer Service
• How would you rate the customer service you
have received from others in the WordPress
community (poor, average, excellent)?
• Watch this video and I’ll ask you this again.

21. OTHER CONSIDERATIONS – Customer Service

22. OTHER CONSIDERATIONS – Customer Service
• How would you rate the customer service you
have received from others in the WordPress
community (poor, average, excellent)?
“A business absolutely devoted to service will
have only one worry about profits. They will be
embarrassingly large.” ~ Henry Ford

23. OTHER CONSIDERATIONS – Why not now?
• Where will you be in 3 years?
• What are you scared about, what do you fear?

24. OTHER CONSIDERATIONS – Why not now?

25. OTHER CONSIDERATIONS – Why not now?
“I’ve failed over and over and over again in my life
and that’s why I succeed” ~ Michael Jordan
“You don’t need to have a 100-person company to
develop that idea.” ~ Larry Page, Co-founder
Google

26. THANK YOU
Questions?
garth@eventespresso.com
@eventespresso