[gojomo]

Get a good business laywer. A lawyer can help with both negotiating strategy and structuring the deal. If for company X your product will really make them $Y million/year (Y>1) then the size of the deal is large enough to make getting professional help worthwhile, ASAP.

Two key factors influencing their willingness to pay:

- the net-present-value (NPV) of all expected future profits from your program. If they've already accepted a estimate of $Y million/year for N years then assume a 'discount rate' and the NPV formula pops out a number. (Note that the 'discount rate' assumed for evaluating risky investments will be larger -- perhaps much larger -- than the similarly-named 'discount rate' used between banks.)

- their best-alternative to a negotiated agreement -- aka their "BATNA" -- be it some competitor's software, or an in-house development effort, or whatever.

Neither of these alone consider risks -- upside or downside. (What if it's way more than $Y million in subsequent years? What if a few years in a much better and cheaper competitive offering becomes available? What if they think they can develop it for $Z but it winds up costing 10X more?) But they provide a vague window for possible prices.

These of course work in exact reverse as they analyze what price you'd be willing to sell for. How much would you make in the alternative? What are your other options (such as other bidders)?

[retube]

> their best-alternative to a negotiated agreement -- aka their "BATNA" -- be it some competitor's software, or an in-house development effort, or whatever.

This one is important. Just because your product may earn/save a million bucks a year doesn't mean it's worth that. If they can build it themselves for a 100k then it's worth a 100k.