Tag Archives: Study

How Do You Create a Side Business? Five Suggestions

Situation: A CEO has built a successful company. She is considering creating an additional company, unrelated to the current company but which will enable her to pursue a long-term dream. The second company will be sufficiently different from the current company that it makes more sense for it to be a separate entity. What success parameters should she set? How do you create a side business?

Advice from the CEOs:

  • A number of successful entrepreneurs have been able to do this. Elon Musk is an excellent example. Study the steps that he took as he moved from PayPal to SpaceX and Tesla. This will provide insight into the factors that must be taken into account.
  • For the short term, pursue the dream of setting up the new company. Draft a business plan and seek an angel – perhaps someone that you already know – to get it moving.
  • Fall-back positions are good to have in mind. While looking at options, assure that sufficient time is allocated to pursue the long-term goal. Be aware of and provide the necessary resources to meet the demands of the new entity. Assure that there is a qualified individual to take the lead in the existing company as your attention shifts to the new entity.
  • For your long-term goal, be the Beta subject of the new program.
  • Assure that all of the ramifications of the long-term goal – including financial and quality of life realities – are taken into account and that there is a plan for each.

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How Do You Manage Major Projects? Seven Points

Situation: A company conducts both engineering feasibility studies and development projects. These are high budget projects and must be managed diligently to prevent cost overruns. What have others done to assure that projects are planned and managed to budget? How do you manage major projects?

Advice from the CEOs:

  • What is the structure of most contracted projects?
    • Most projects are fixed price. They come from feasibility studies which are essentially “marketing” for future sales. Typical terms are 30% up front, with the other 30/30/10 upon achievement of milestones and completion of the project.
  • Get complete buy-in from the customer as part of the initial negotiation.
  • Stay ahead of expenses by billing in time to maintain positive cash flow from the projects.
  • Structure pricing so that custom work is profitable if the project mix is 50/50 custom vs. standard work.
  • Push-back if the customer wants to reduce project cost up-front.
  • Carefully document work papers – above what is required by the contract. Get buy-in for this in advance, during the initial negotiation.
  • Once the feasibility study is completed, revise the scope and deliverables of the work agreement based on findings from the study.
  • Separate the “concept” phase from the execution phase and charge a premium for the concept work.
    • Position this as a value to the customer.

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How Do You Quickly Shift Your Marketing Position? Five Points

Situation: A company wants to shift their marketing position quickly and effectively toward a new focus. The new focus is the result of breakthroughs that they have developed that have opened new product and service opportunities. How do you quickly shift your marketing position?

Advice from the CEOs:

  • Hire a strategic marketing consultant to help analyze the market, identify unmet needs and unaddressed segments of the market where the company can establish a strategic advantage.
  • Pick an area where the company is known or can be known as the best. Create differentiation by specializing in this segment.
  • Add both sales and marketing positions to guide the refocus.
    • Marketing is more than just collateral. It is strategic positioning, understanding changing customer needs, and thinking creatively about how to leverage those needs and the company’s capabilities to maximum advantage to support the sales efforts.
    • A good marketing platform provides salespeople the structure within which to operate.
    • How do you find good candidates? Talk to editors and publishers of trade journals. They know marketing contacts and who is good.
  • As the company shifts the model, look for ways to reduce utilization and down-time for engineers and other staff.
    • Maximize the value of this down time.
    • Develop case studies or materials to support the sales effort.
    • Create new concepts or capabilities to add to the offering.
  • Several other CEOs noted that with the quality of the projects that the company has completed for current clients, the company already has both the capabilities and proof of delivery that many sales and marketing people would love to have. Use these as assets and leverage them.

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How Do You Implement Your Vision for the Future? Seven Points

Situation: A CEO has a clear vision for the future of her company and what she wants to build. Her ambition is to revolutionize her industry. What are the most important things that she should to make her vision a reality? How do you implement your vision for the future?

Advice from the CEOs:

  • It is critical to take charge of the vision for the company and to see that the company has or hires the right people to implement the vision.
  • As CEO, remove yourself from the day to day.
    • Hire a Director of Operations ASAP.
    • With the right experienced Director of Operations, the infrastructure to support the program will fall into place. This individual will help to assure that this happens because he/she will be incentivized and motivated to perform.
  • Concentrate the focus for the next 4-6 months to scale the present operation to the point where the model can be “franchised.” Consider expanding the model through sites with managers who have an ownership interest.
  • An important initial step is rounding out the training process.
  • The greatest value of the present site is to serve as a demonstration site to show potential customers how installation of the technology in their operation would work. With this in mind, build a working demonstration model on the present site to the dimensions and scale that customers would see on their sites.
  • To shorten the lengthy sales cycle, create and sell a feasibility study for the technology. Agreement to a feasibility study represents commitment from the prospect and conducting the study will create buy-in on the part of the customer.
  • As the new technology is launched, CEO time will be spent away from the initial site. Prove that the site can run in the CEO’s absence before leaving for extended periods of time.

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