Tuesday, May 19, 2009

The action plan the Australians panned...



1. Sole Trader: Least feasible due to size of group. Perhaps following agreed 3-5 year limited partnership period (revert to sole trader if partners seek exit).

2. Limited Partnership: Appears most feasible. However depends on business strategy. For example, capital outlays may be minimal in first three to five years under this plan. However engineers may prefer associates or SME (subject matter expert) positions with contingency based or commissions based or profit sharing dependent upon performance (or combination). Do engineers have profit sharing requirements with their current employers?

3. Company:Most logically next step for partnership based on three to five year success rate. For example, have we sustained target growth?
Would we start a company without having first tested the waters with more of a part-time venture which partnership offers? Also might engineers have employment restrictions as terms of their current contracts?


1. Management: In partnership we would represent primary management. In limited partnership two main operating managers with engineers as associate consultants. Would need to agree details of association, contract and renewal terms.

2. Investors: Australian small business start-up funds, Singapore seed-incubator programs, and perhaps a third(China/Hong Kong or Korea?)

3. Potential Employees: At present limit employees/consultants/associates positions to our group of five. With company start-up (following preliminary 3-5 years of boot-strapping we would need a head office staff)

4. Customers: I propose three potential clients:

a. Government/business/university research agencies seeking to assemble international research project teams or study project feasability
b. Research qualified candidates sourced from Australia, (PRC) China, Singapore and/or North East Asia
c. Research agencies seeking to link research programs, assign copatent and "Pasteur-type" collaborations (match-making)


1. Executive Summary:
I suggest we frame our business as a "boutique" consulting agency
which implies a) small size b) core competencies c) intimacy and flexible customer orientation

2. Background:
For example, how could we assist Chinese nationals access and enter research projects in Australia/Singapore or other parts of Asia? How can we assist local research agencies in any of those three locales find their candidates quickly? How can we connect researchers in similar but complimentary disciplines? How can we
assess and review future technology developments to meet possible government/university/business sponsored sector development projects?

3. Business team: In this section we need to summarize the skills and abilities of our group members with perhaps a paragraph on each emphasizing these are the five content and subject expertise we offer our customers. For example, engineers can you provide your own predictions on possible growth trends in product development in each of your industries in Australia, Singapore and perhaps a third Asian market?

4. Product/services and customers: We need to quickly identify proejct management opportunities and proposals for policy research development faster and more cheaply than larger consulting agencies. The reason I suggest a three customers or three markets approach is that we may need to adjust our model over time and plan for the future as well. For example we might seek to focus on Australia singularly however with three Chinese members of our team it would make sense to concurrently develop our network in Asia.

Stage One Australia: Obviously for practical purposes a logical starting point.

Stage Two: Singapore/Hong Kong (?): These are incubator supported and government driven sectoral incentives markets. We need to identify opportunities here too I think.

Stage Three: As a means to meaningfully link growth in the previous two stages to other similar or soon to develop sector incentives campaigns.

5. Analysis of marketplace and competitors: Following "fall in love with three of everything law" so that we do not over-rely on one source of income.
We would otherwise miss opportunities. We also have three engineering sector areas of concern.

AUSTRALIA: We could look at three levels for benchmarking a) current start-ups b)medium sized national c) large sized multinational
SINGAPORE: Each level would need to represent best in class.
Third (agreed market): This would represent a wild card where perhaps best-practices are not the actual drivers.

6. Business marketing objectives and strategies:

As each of us represents a different core competency diversity of network opportunities form core of strategy. Diffusive model. We need to use our network of associations and familiarity with government/business/university agencies (in Australia, Singapore, and a third market) to seek/find/create business knowledge transfer proposals and project management tenders which are a) better than competitors b) faster than competitors c) cheaper than competitors.

7. Operational Strategies:

We would need to contribute most of our free time to these endeavours (for those of us in full-time positions that would be at least a couple of hours a day and most weekends). In partnership mode we would need to develop perhaps a website for "office in a briefcase" business and use current technology to maintain operational connectivity. Site management visits would be necessary, assessing and recruiting competent management and/or research associates (referal and team management held by us) with site management/research teams assembled by us.

8. Business structure:

The core of our business could be managerial as in collecting/gathering/assembling material and personnel for project development proposals limiting our input to managerial and overall team assembly, desk and interview based research project and policy proposal research. However we would need to access engineers considerable network of under-employed and/or associations-based network of reputable/recommended project participants either from Australian or Chinese/international based pool of canidates. So part of our business is HR sourcing but on a full project management basis. We could consider three options of service: a) project/policy research perhaps leading to b) Project/team design including needs assessments and full project plan perhaps leading to c) full project managment and implementation program with recruiting/hiring and subcontracting of further management/research associates. It would be easy to envision steps a-c would be a building on strengths scenario where our first year of operations would assist in identifying sector developments, second year would be assembling teams plans and third year begin taking on larger assignments as our business generates more income and we become familiar with our customers.

9. Financial model and projections:

In general businesses do not go global without projected minimum growth rates of about 15% annually. We could then expect to double our earnings from year zero in four years if we consider the standard calculation of 60/divided by any percentage rate of growth to find its doubling time. We could expect fast growth in the beginning however as we get larger we get slower and our earnings may not maintain a 15% rate of growth. What projection is acceptable? Three years or five?

Sample Balance Sheet (Simple)
Assets Liabilities and Owners' Equity
Cash $ [cost of partnership registration (state or federal + Liabilities
possible registration costs in Singapore and third market]
Accounts Receivable $[payments for policy research]
Notes Payable $[Proposals accepted paid in installments]
Accounts Payable [fees and income distributed to associates]
Total liabilities $[Including legal fees for contracts and terms]
Tools and equipment $[In partnership mode limited] Owners' equity
[Need to agree to percentage of reinvestment Capital Stock $[may need to agree to reinvest earned profits to build to move on to business/company mode]
Retained Earnings $[Depending upon agreement % of profits to reinvest]
Total owners' equity $[Equitable distribution of holdings]
Total $[Small outlay in partnership mode leading to larger in company
Total $[Need to agree on percentages of reinvestment]


For the year ended DECEMBER 31 2009
$ $
GROSS PROFIT (Total profit)
RENT (1)
TAXES --------

Earnings After Taxes (EAT) --------

(1) These are more likely expenses in business company mode rather than partnership mode.


Growth rate needs to be estimated (possibly require at least 15%)
Cost of sales(2)
Need to determine percent of revenues
Research and development(2)
Percent of revenues
Selling, general and administrative (2)
Previous year SGA times (1 + (75 percent of the revenue growth rate)

(2) The more we as a group agree to reinvest the lower these percentages will be in partnership mode.

No comments: