Pricing a Multi-Channel Testing Unit

I would bid it as per their RFQ, but I would write the code so that if they wanted to expand it later, they would have to come back to you to do so.

I am not the master of masters in writing LabView programs. The changes that I made, were about modifying timing, quantity, once the basic frame was done. To create traps or hidden loops is far from my expertize. And I am more concerned about the hardware, I am not that altruist so to let them using it for free.

National instruments, makers of Labview, have great customer service. You should contact them for your programming help needs. They may also be able to help you with program copyright protection.

I think your American laws allow for an automatic protection for copy-write. A patent application will protect your device from being produced without your approval. I would pursue the legal side, before handing over prints or hardware. We call this "Chinese Engineering", in Canada. This is where someone take a product, rips it apart, copies the design and then reassembles it, calling it their own.

I'm approaching this strictly from a business prospective only. I'm going to assume you have a contract with this company as a private contractor or that your personal employment contract has some of these stipulations. If not, does the agreement discuss in detail who owns or what rights to ownership are established with regards to new ideas, inventively, improvements, upgrades? How are these ideas defined ie: proprietary information, new product development, etc.

Most companies like most of the labs here own whatever you develop related to the project you work on regardless of it's specific use. This is usually spelled out again in whatever employment contract. If there are grey areas in the contract or that they may be interpreted differently by more than one person, it would be at your best interest, even there at the job to clarify any phrasing that there may be a question, regardless. Sounds more like your tailoring the device for their specific requirements but you realize the use can be built upon without your further involvement and that "global" opportunities may also exists leaving you out of a possible larger financial opportunity.

With out much of the information I've discussed above at hand, it gets back down to some common sense tactics. Know what your legal position is in the first place regarding your contract and what goes along with that. What is the temperament and flexibility issues with the new management. Are they approachable to any changes or opportunities you may provide for them with your ideas. I'm assuming since you have to provide a price you are in some position related to control of your thoughts and ideas.

You may be able to provide an addendum to your existing contract with regards to their latest request. Are you even in a position to negotiate? How feasible or necessary is it to change any other position in this than the one already established. Sound like a good diplomatic approach related to pricing everything individually would be at hand. Some control can come in the method in which you price. Price for hardware individually with a markup that makes sense for you and in the market. A price for including the code as well. Can the code be made to work for a certain amount of time only? Sounds like it could. Sell it in a fashion that they may have the ability to buy all the upgrades you create as you fine tune your software package and related hardware, schematics etc. Sell them at a later time that which makes the software or schematics more adaptable to more channels. Can you make what you provide them somewhat limited to specific use needing other upgrades to make it more adaptable. Include these in an addendum on a two or three year contract if you know how it's use will be.

Many companies think about at what point they can build in some type of obsolescence, ad on's, limited functions, etc. Don't price your self out completely in one shot if you can. Find where you can provide more ad on's, improvements etc, as you make more improvements as it requires more inventively.

In my experience with out a well written and spelled out contract, the reality of trying to protect your information even with patents, copy write protection etc, still gets weak and then trying to enforce any of that gets expensive and cost prohibitive. Get it ironed out up front to minimize any losses now, not later. Think risk management.

Price 'em for both, but tell 'em the 4 chanel can't be used as 32chanel (and make sure the software isn't easilly alterably by them).
Price the 4 chanel high and the 32 chanel relatively low ...say just 15% more.
Give 'em the software with out any comments of flowcharts.
it's nearly always cheaper to write software from scratch than to modify someone else's code, so I wouldn't worry unduly about them stealing your software (unless it has some earth shattering unique features previously unheard of ....which I doubt ...no disrespect...it's just that I generally find that even my cleverest tricks turn out to be standard methods to someone somewhere...)

(Oh and don't take that assult rifle into the meetings..no..don't...step away from the the accountant)
Del

I concur with Del, except I would separately price the software development and time for the two different options.

I will put my two paws in and say that it is a good idea to price what you believe the client actually needs as well as what they are asking for. Given the rather big difference between a 4 channel and a 32 channel system, the 32 channel system should be included as an option (eg - 4 OR 32 channel system) rather than a variation (eg - 4 channel initially with the option of upgrading to 32 channel later on).

Including an explanation or background on WHY you have included a price for a 32 channel system may also be a very good idea (especially since it appears that the original design has changed), but remember that the 4 channel design is what they are asking for at the moment and so should be covered in detail in your proposal first.

I concur with the above as well. Everyone is giving you pretty much the same answer.

Since you have built other devices with this company, you now must have "business friends" in this organization from which you may find out what is the final aim of this request.

I have been in sales for 11 years and all the advices I read make good sense to me.

As a summary, you should :

1) protect yourself and your design : look at licensing

2) capex : cost of intial investment should cover any easy upgrade that is specifically required. Hence, the price per channel of 4 channels device will be higher than the price per channel of a 32 channels device.

versus

3) opex : plan for your future : propose additional services/maintenance contract to lock them with you during a reasonable period of time.

4) words fly while written things remain : your contract with them is the only thing that protects you. Every commitment made verbally should appear in writing.

Wish you success

Please don't take this the wrong way I'm not trying to be rude: just exploring the possibilities.

Are you ripping them off for production quantities of the hardware?

Do they think you are ripping them off for production quantities of the hardware?

Are they worried that you may not be around for long enough to maintain support?

If they want to copy your design, why not charge them for the design: rather than the finished product.

If they claim they are just worried that they may get left high and dry if you get run over by a bus, you could offer them ESCROW (assuming that it exists in Texas: ESCROW is an independent repository for intellectual property, your client only gets to look at the stored material if you are no longer able to support the product).

At the end of the day: if they really have the capability to reproduce and modify your designs, they don't actually need your services. That's almost certainly not the case, but unfortunately, it may take their management a while to realise it.

I started the discussion not for getting convenience answers, so I do not consider, at all, anything from your posting to be rude.

Am I ripping them off? As a very small business, my pricing practice, for prototypes, was to charge the production cost, and overhead, plus the time that took me building it, paid at the average salary for an electronics engineer. They always accepted it. It was, I think, faster and cheaper, for them, to let me do it instead of one of their engineers.

Are they worried that you may not be around for long enough to maintain support?

They might be worried, indeed, but without any foundation. I declare that I am 33 years old and that I intend to live to be 100 years old

Anyway, as most told me to do, I will present two prices, one for the device and executable software, and the second one for the whole enchilada.

I will keep you informed

I know this is late to the table, but I couldn't help but notice that 4 channels X 8 devices = 32 channels.

My suspicion is that they desire to look at reducing cost in the event they add channels, less exposure to system-wide failure by limiting to 4 channel sectionalization, or similar considerations.

The request for all of the intricate details sounds like they wish to do a DIY evaluation of the price in an effort to intimidate for a lower cost. Well intentioned perhaps, but usually as mis-guided as playing doctor when evaluating an employees' time off; best left to the professionals.

My advice on that is to provide excellent diagrams, line drawings etc, with sectional values (groups of components), a cost for everything in box "A" etc, rather than a full break-down by component. A request for the full component break-down involves much more than you have been providing - and will cost substantially more, what with the site licensing, restrictions, and all.

Same for the code, clear functional descriptions OK, but the code itself is much more than you have been providing - and will cost substantially more, what with the site licensing and all. A carefully worded EULA specific to your application could help, submitted with the overall code description only. I don't recommend plagiarism but you have seen enough of them to get the idea of what you will need.

Don't be bashful about conveying your personal importance to their system. There is nothing to explain about expecting to receive value for your special domain of expertise that they don't have, and obviously need.

Mumble, mumble, something about 2 cents etc, CJM

Thank you, guys. Here is the rest of the story:

Well, I did present a quote for four channels, with the LabView program in executable form (not presenting details for programming).

I did quote for a complete system with all schematics and code for program.

All on the same piece of paper.

They have debated, and after two days they told me that they have decided to borrow a fast sampling scope from another lab, and use the memory of the scope to save the samples values into a file that, later, they will analyze with an already existing LabView program.

It was, in fact, a budget restriction decision, so I am waiting for another bright idea to implement.

By the way, can anybody spare a quarter?

Thanks indel, It's not a happy ending, but at least we've heard the end of this story: something that very rarely happens with this sort of thread.

Thanks for keeping us in the loop indel,

I expressed that it was more in containing cost than stealing your work, and it appears to be the case. You can relax as far as intention, now you have that clearly in view.

You may have an excellent opportunity to provide a new, focused product with the same benefit they seek as stated, but with the advantage that it is designed to seamlessly integrate with LabView. The words 'borrow from another lab" indicate a cost and also some work involved in integrating data sets, and are both specific items you can offer to compete with.

Complement them on their vision in these tough economic times, and make them an offer to provide the service they have outlined, with the advantage that they will get it accomplished with accuracy and reliability, as you have proven to provide.

Now I'm up to 4 cents I guess, CJM