Next, aim for a non-compete, non-disclosure being signed before you present it. Now, there's about a 50/50 chance that the company will sign this. I know my companies have a policy of not signing, because most ideas are things we have already got on the table. You have to decide there and then whether you are willing to trust if they don't sign. I would just move ahead.
So, assuming they buy the idea of your product and want to pay you for it, they will either make a lump sum cash offer or a royalty offer like you want. This is where negotiation comes in. Once you have a deal, have the lawyers draw up the papers and move forward. It's not complex but it's also not easy--it depends on negotiation skills.
All the best,
Brad Sugars is the founder and chairman of ActionCOACH. As an entrepreneur, author and business coach, he has owned and operated more than two dozen companies including his main company, ActionCOACH, which has more than 1,000 offices in 34 countries.