Developing a Small Business for Evaluation Consulting Melanie Hwalek, Ph.D. President SPEC...
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Transcript of Developing a Small Business for Evaluation Consulting Melanie Hwalek, Ph.D. President SPEC...
Developing a Small Businessfor Evaluation Consulting
Melanie Hwalek, Ph.D.President
SPEC Associates615 Griswold, Suite 1505
Detroit, Michigan 48226-3992(313) 964-0500 ext. 202
Agenda
9 am – 10 am: Relevant IntroductionsWhat is your future business?
10 am – 11 am: What makes a business valuable?11 am – noon: How do you get there?Noon – 1 pm:Lunch1 pm – 2 pm: The Life Cycle of a Contract2 pm – 3 pm: Cash and its flow3 pm – 4 pm: Do you really want to do this?4 pm – end: Other issues (international, personal)
Relevant Introductions
• Name
• How do you identify your profession/skills
• Experience doing consulting
• Experience owning a small business
• Fun fact about yourself
• Interest in owning a small business
• Most pressing question for today
Imagine your futureWhen you are 60 years old …• Do you want to be married/partnered?• Do you want to be raising children? How many?• Do you want to own a business?
– Do you want to be able to sell it?– Do you want to work by yourself or with others? If others,
how many?– Do you want your office at home or in an office building?– Do you want to be working full or part time?
• What salary do you want to be making?• What other things are related to your financial or
professional status?
What would your future cost today?
(case study #1)1. How much income must your business generate each year to at
least make ends meet?2. What kinds of expenses did you consider to arrive at this figure?3. Ideally, what is the best combination of each sized contract that
you should strive for in a typical year? $5,000$10,000$25,000$60,000$100,000$500,000
4. What are the job titles and/or overall responsibilities of the three employees (including you) likely to have?
5. What are the billing rates for each of the three employees?
What makes a business valuable?
• Goodwill– Expertise– History of quality work– Loyal customer base– Advisors/content experts– Staff– Subcontractors– Staff/subcontractor configuration
What makes a business valuable? (con’t)
• $ Solvency– Financial statement– % of revenues to owner– Pattern of revenues over time– Debt
Here are the first 10 things I would do 1. Make and print business cards and letterhead
2. Draft an outline of your business plan
3. Draft an outline of your marketing plan
4. Register assumed name
5. Make potential customer database
6. Talk to current employer about conflict of interest
7. Join some networks (potential customers, competitors, potential staff/subcontractors)
8. Create basic marketing materials (brochure, Web site)
9. Send at least 100 letters with brochure to potential customers
10. Make follow-up calls and ask for appointment
… loop back to #9
Create a need and fill itWhat does this mean for selling evaluation and related services?
What would your sales pitch be?
How I would manage a sales meeting …
1. What I would bring
• Something to leave behind
• Including business card
• Makes the case for creating/identifying need and filling it
2. What I would say
• Quickly assess customer knowledge and perception of evaluation
• Determine if need is internal (e.g. CQI) or external (e.g. funder requires) and plan pitch accordingly.
• Give examples
• Stay away from technical jargon
• Offer something free (evaluation plan for grant proposal)
How I would manage a sales meeting …
3. How I would end the meeting
• Ask customer how is best way to keep in touch
• Ask customer about others s/he may know who might need your services
• Ask if you can use customer name as referral
How I would manage a sales meeting …
4. How I would keep in touch
• Send thank you email and reminder
• Create quarterly newsletter
• Send relevant articles or other documents as identified
How I would manage a sales meeting …
The Life Cycle of a Contract
• Before you start– Contract with customer– Contract(s) with subcontractors– Timeline (special meetings, report deadlines)– Payment schedule– Key decision points– Costing the job
• Fixed• Hourly (not to exceed)• Retainer• Pay for performance
The Life Cycle of a Contract
• Doing the work– Finding the right people – Assigning people to tasks– When to contract vs. hire– IRB issues– Assuring quality
• Of data collection• Of data entry• Of data analysis• Of report preparation• Of human interactions
The Life Cycle of a Contract
• Ending the job– Letter of completion– Ask for quotables– Ask for referrals
Cash and its FlowCase #4
• When would you start looking for more work?
• What do you do if you see expenses outpacing revenue?
Cash and its FlowCase #4
• When would you start looking for more work?– You never stop!– Expect minimum 6 months from
contact to contract
Cash and its FlowCase #4
• What do you do if you see expenses outpacing revenue?
– Apply for loan• Line of credit• Long term (if purpose is long term)• Short term
– Invoice ASAP– Subcontractor paid only after you are clause in
contract– Talk to suppliers and arrange payment plan
Cash and its FlowCase #4
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Auditable trail
Check and balance receipts and checks
More case studies
Your cash flow analysis indicates that this year’s confirmed sales are $150,000 but it takes $300,000 to cover all of your business expenses (including your own salary). In the mean time, you are currently working day and night to meet current work deadlines. What should you do?
More case studies
You like to travel and you would really like to do some international work. You have some experience living abroad in a developing country, but not doing evaluation internationally. How would you go about getting international work?
More case studies
You’ve decided that there is going to be a huge market for services evaluating programs aimed at decreasing consumer energy consumption. While you are interested in the topic, you have no prior experience evaluating these types of programs. How can you begin to capture some of this business? Where do you start? How do you proceed? How long should you keep trying?