SECTION I: ESTIMATION OF COSTS
| 1 | Taking into account the rest of the cost evaluation please provide an overall estimation of the total costs for full deployment/production of the R & D result. |
| … in terms of IPR protection | |
| The proposed method of IPR protection is a design protection, the total costs including prosecution is 2,000 EUR. | |
| …in terms of product development | |
| The product should be prototyped, that is approx. 3,000 EUR. The personnel cost for testing is about 6,000 EUR, plus 2,000 EUR for the certification procedure to be paid to the laboratory. | |
| …in terms of mass production | |
| The pre-production phase has no high need of investment. The fixed costs, such as tooling costs are approximately 8,000 in total. The running costs are mainly the production cost of the unit plus overhead. That is estimated 20 EUR plus 5 EUR per unit. | |
| … in terms of marketing | |
| For marketing cost an average annual 20,000 EUR can be set. | |
| 2 | Based on the above assessment as well as the marketing information please provide the correct estimation of the price for R&D product in correlation with costs | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
| Fixed costs | 41,000 EUR | 4,000 EUR | 4,000 EUR | 4,000 EUR | 4,000 EUR | |
| Personnel | 4,000 EUR | 4,000 EUR | 8,000 EUR | 8,000 EUR | 12,000 EUR | |
| Other running costs | 12,500 EUR | 25,000 EUR | 50,000 EUR | 87,500 EUR | 125,000 EUR | |
| Marketing costs | 20,000 EUR | 20,000 EUR | 20,000 EUR | 20,000 EUR | 20,000 EUR | |
| TOTAL EXPECTED COSTS | 72,500 EUR | 53,000 EUR | 82,000 EUR | 119,500 EUR | 161,000 EUR | |
| Price per Unit | 50 EUR | 50 EUR | 50 EUR | 50 EUR | 50 EUR | |
| Type of Unit | Pcs. | |||||
| Number of Units | 500 | 1000 | 2000 | 3500 | 5000 | |
| TOTAL Expected Revenues | 25,000 EUR | 50,000 EUR | 100,000 EUR | 175,000 EUR | 300,000 EUR | |
| CASH FLOW REQUIRED (REVENUES-COSTS) | -47,500 EUR | -3,000 EUR | 18,000 EUR | 55,500 EUR | 89,000 EUR | |
| TOTAL CAPITAL required for five years | 200,000 EUR | |||||
SECTION 2: QUALITATIVE FACTORS
| 3 | Dimension of identified target groups |
| The estimation refers to the European market. Based on the number of households and suppose that the innovators and early adopters give the 20% of the market a number of 60 million results. The target age group is 30% so the potential market is about 20 million. An average composition (one sale) is estimated to be of four units. The coverage ratio is 3,000/20,000,000=0,015% | |
| 4 | Evaluation of financial Risks for R&D result |
| The development and production starting does not imply high financial risk. The production is flexible according to the orders, production can be carried out on-demand. The estimated initial capital is not needed to be ready at the very beginning in the total sum. The investments will be covered in an average 3 years. The introductory phase is critical, much attention is to be paid to the market, a proactive marketing strategy should be followed. | |
SECTION 3: IDENTIFICATION OF FINANCING SOURCES
After evaluating all the above mentioned criteria, please tick the best financing source for the achievement of R&D result (i.e. own capitals, banking credits, venture capital, business angels, etc)
| 1. European Funding
Define relevance of the product with the following potential funding sources and comment |
| European Funding is possible for the project, calls for original spin-off ideas are not uncommon. Solely the lighting system is not a typical subject to be funded by Community sources. |
| 2. National Funding |
| Recently the New Széchenyi Plan was announced in Hungary, numerous programs support the small and medium enterprises’ research and development and innovation (R+D+I) activities. Grant proposals could be posted to foundations, there is also a possibility to find financial support for spin-off enterprises. The business ideas which require intellectual capital and sophisticated production techniques are likely to be funded. |
| 3. Private funding |
| Venture capital, business angels might support the proposal, the estimated return rate is 30%. A joint venture is possible, if a production company is possible to be found. The strategic partnerships could be utilized. |
| 4. Other |
| Licensing agreement is also possible. |
SECTION 3: FINAL EVALUATION
| It is requested a final evaluation considering the funding opportunities you believe most suitable for the exploitation of the R&D result, considering the possibility of the creation of a spin-off, further research, in particular, a cost/benefit analysis and a financial projection for the R&D result, type of collaboration identified (i.e. Licensing Agreement, Technical Cooperation, Joint Venture, Manufacturing Agreement, Commercial Agreement with Technical Assistance, Creation of a spin-off, Joint further development)… |
| The project will most likely to be financed in private funding or luckily by a national fund. The most viable form of cooperation seems to be a spin-off with Venture Capital or Joint Venture (Institute, cooperative development partner, production company) support, or eventually a Licensing Agreement is possible. In all cases the initial costs should be financed, and further on some additional immaterial contribution should be expected from the partner; as the 30% return rate sounds attractive. |
Decision of evaluation
The R&D has a high potential of exploitation
Tibor BERCSEY
