How to price licencing for a new waste water process?

[troublesbrewing]

A young friend of mine who I am helping to start a business (I have no financial interest but help with marketing and product development ideas for fun) has developed a process for waste water treatment that almost eliminates the requirement for chemical treatment and therefore provides terrific cost savings.

He wants to try and licence it (it being a process controller and software he has developed) to the global companies that work in this area but is a total innocent. Does anybody here have experience of licencing pricing for process treatment (or similar projects) or has experience of the approach taken by the large companies in the waste water treatment business? If so I’d be grateful for some ideas/pointers.

[StevieBee]

troublesbrewing said:

therefore provides terrific cost savings

There's your starting point.

Start with working out the cost of supplying it and the desired margin.

Then work out a cost saving compared with standard, existing solutions and from this, you can work out an added premium.

In terms of the licensing aspect, this will be determined by several factors and each unique to each country and / or region. For global stuff, I would strongly recommend engaging with your local UK Trade and Investment rep. They are an excellent organisation and will be able to or vide market insight for the regions of the world being targeted and can help find local partners / agents /etc.

There is also quite a bit of financial support out there to support new-to-export companies. This is mainly supporting those seeking entry into fast developing countries such as China and India, both of which I would suggest would be highly receptive to what is being offered here.

HTH

Good luck

[Tuna]

First step, get intellectual property protection - patents, design copyright etc. and do it through someone who knows what they're doing.

He needs to consider what he's offering (hardware, support, installation, guarantees, technical references, insurance etc. etc.) and what an 'equivalent system' from the established players would offer and cost.

He also needs to show that his system delivers the promised results. That means at least one running system, with test reports from an independent source that show the system works as advertised. It should also probably run for at least a year, but you'd have to talk with the inspectors to confirm how long it would be expected to run before they'd pass it.

Then he can talk to the big boys.

[LooneyTunes]

Does it actually work? (and does he have the independent data to prove it)

There are already chemical free options out there (UV and/or filtration based) but they don't deal with all contaminants.

[padhinbed]

Sounds very interesting. Once he has it patented, drop me a PM as i'm very interested to hear more (and potentially assist in moving this forward with one of the large water companies).

[troublesbrewing]

Thanks for all the replies. We're working on the IP and hope that it will be "finished" before year end. Test site with manual operation has been working successfully in a relative backwater for about two years. Software for control, monitoring and web access, like always, is never quite finished, but seems to be providing the same level of process performance as a manual system. It will be a saleable (or salable/sellable- just to keep the spelling nazis happy) product soon, but protecting the value and successfully exploiting it will be a challenge for a little guy without deep pockets.