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Developing a Small Business for Evaluation Consulting. Melanie Hwalek, Ph.D. President SPEC Associates 615 Griswold, Suite 1505 Detroit, Michigan 48226-3992 (313) 964-0500 ext. 202 mhwalek@specassociates.org www.specassociates.org. Agenda. 9 am – 10 am: Relevant Introductions
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Developing a Small Businessfor Evaluation Consulting Melanie Hwalek, Ph.D. President SPEC Associates 615 Griswold, Suite 1505 Detroit, Michigan 48226-3992 (313) 964-0500 ext. 202 mhwalek@specassociates.org www.specassociates.org
Agenda 9 am – 10 am: Relevant Introductions What is your future business? 10 am – 11 am: What makes a business valuable? 11 am – noon: How do you get there? Noon – 1 pm: Lunch 1 pm – 2 pm: The Life Cycle of a Contract 2 pm – 3 pm: Cash and its flow 3 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 future When 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 $500,000 • What 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? • Goodwill • Expertise • History of quality work • Loyal customer base • Advisors/content experts • Staff • Subcontractors • Staff/subcontractor configuration
What makes a business valuable? (con’t) • Products and Services • Proprietary • Consumable • Niche
What makes a business valuable? (con’t) • $ Solvency • Financial statement • % of revenues to owner • Pattern of revenues over time • Debt
What makes a business valuable? (con’t) • Systems • For providing services • For business management
Where do you start?Case #2 What are the first ten things you would do?
Here are the first 10 things I would do • Make and print business cards and letterhead • Draft an outline of your business plan • Draft an outline of your marketing plan • Register assumed name • Make potential customer database • Talk to current employer about conflict of interest • Join some networks (potential customers, competitors, potential staff/subcontractors) • Create basic marketing materials (brochure, Web site) • Send at least 100 letters with brochure to potential customers • Make follow-up calls and ask for appointment … loop back to #9
Create a need and fill it What 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 bring • Something to leave behind • Including business card • Makes the case for creating/identifying need and filling it
How I would manage a sales meeting … 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
The Life Cycle of a ContractCase #3 • Before you start • Doing the work • Ending the job
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 DOCUMENT DOCUMENT DOCUMENT Auditable trail Check and balance receipts and checks
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