Developing a Small Business for Evaluation Consulting Melanie Hwalek, Ph.D. President SPEC...
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Developing a Small Businessfor Evaluation ConsultingMelanie Hwalek, Ph.D.PresidentSPEC Associates615 Griswold, Suite 1505Detroit, Michigan 48226-3992(313) 964-0500 ext. [email protected]
Agenda9 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 IntroductionsNameHow do you identify your profession/skillsExperience doing consultingExperience owning a small businessFun fact about yourselfInterest in owning a small businessMost 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)How much income must your business generate each year to at least make ends meet?What kinds of expenses did you consider to arrive at this figure?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$500,000What are the job titles and/or overall responsibilities of the three employees (including you) likely to have?What are the billing rates for each of the three employees?
What makes a business valuable?
What makes a business valuable?GoodwillExpertiseHistory of quality workLoyal customer baseAdvisors/content expertsStaffSubcontractorsStaff/subcontractor configuration
What makes a business valuable? (cont)Products and ServicesProprietaryConsumableNiche
What makes a business valuable? (cont)$ SolvencyFinancial statement% of revenues to ownerPattern of revenues over timeDebt
What makes a business valuable? (cont)SystemsFor providing servicesFor business management
Where do you start?Case #2What are the first ten things you would do?
Here are the first 10 things I would do Make and print business cards and letterheadDraft an outline of your business planDraft an outline of your marketing planRegister assumed nameMake potential customer databaseTalk to current employer about conflict of interestJoin some networks (potential customers, competitors, potential staff/subcontractors)Create basic marketing materials (brochure, Web site)Send at least 100 letters with brochure to potential customersMake 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 What I would bringSomething to leave behindIncluding business cardMakes the case for creating/identifying need and filling it
How I would manage a sales meeting 2. What I would sayQuickly assess customer knowledge and perception of evaluationDetermine if need is internal (e.g. CQI) or external (e.g. funder requires) and plan pitch accordingly. Give examplesStay away from technical jargonOffer something free (evaluation plan for grant proposal)
How I would manage a sales meeting 3. How I would end the meetingAsk customer how is best way to keep in touchAsk customer about others s/he may know who might need your servicesAsk if you can use customer name as referral
How I would manage a sales meeting 4. How I would keep in touchSend thank you email and reminderCreate quarterly newsletterSend relevant articles or other documents as identified
The Life Cycle of a ContractCase #3Before you start
Doing the work
Ending the job
The Life Cycle of a ContractBefore you startContract with customerContract(s) with subcontractorsTimeline (special meetings, report deadlines)Payment scheduleKey decision pointsCosting the jobFixedHourly (not to exceed)RetainerPay for performance
The Life Cycle of a ContractDoing the workFinding the right people Assigning people to tasksWhen to contract vs. hireIRB issuesAssuring qualityOf data collectionOf data entryOf data analysisOf report preparationOf human interactions
The Life Cycle of a ContractEnding the jobLetter of completionAsk for quotablesAsk for referrals
Cash and its FlowCase #4When would you start looking for more work?
What do you do if you see expenses outpacing revenue?
Cash and its FlowCase #4When would you start looking for more work?You never stop!Expect minimum 6 months from contact to contract
Cash and its FlowCase #4What do you do if you see expenses outpacing revenue?
Apply for loanLine of creditLong term (if purpose is long term)Short termInvoice ASAPSubcontractor paid only after you are clause in contractTalk to suppliers and arrange payment plan
Cash and its FlowCase #4DOCUMENT
Auditable trailCheck and balance receipts and checks
Do you really want to have an evaluation consulting business?The 33 Keys to Independent Consulting
More case studiesYour cash flow analysis indicates that this years 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 studiesYou 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 studiesYouve 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?