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Cash
KPI1: Cash Flow ratio of 2:1. As a low volume / high value product business. Cash flow is a significant risk. Calculated as operating cash flow / net sales revenue. The company will aim for an operating cash flow ratio of 2:1. i.e. it will be able to cover liabilities twice over from assets.
Sales Turnover
KPI2a: Accountants receivable turnover ratio of >7.5. This is net credit sales by average accounts receivable. We normally recover the majority of payment in arrears and clients are slow. We will aim for a ratio of 5, anything greater than 7.5 will be a red flag requiring highlight. I.e. sales to UoH of £25k, paid £5k, ratio is '5'. or
KPI2b: (Lead) Partner utilisation. Should be greater than 50% i.e. more than 110 days per annum (according to timesheet). NB/ Desirable margin may require 75% utilisation.
Profit Margin
Gross Profit Margin = Gross Profit / Revenue x 100
Operating Profit Margin = Operating Profit / Revenue x 100
Net Profit Margin = Net Income / Revenue x 100
KPI3: Profit Margin. Years 1-3 net profit margin of 10%, moving to 15% years 4-5.
Something in here about accounting for profit per utilised day.
Margin of Safety
KPI3: Margin of Safety Formula. (Current Sales Level - Breakeven point / current sales level). 5%? Is the breakeven point £40k
Productivity
KPI4: Wage ratio to sales. Suggested 80%
Debtor receivables
KPI5: Debtors Turnover Ratio (credit sales / average receivable)

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Questions I wouldn't want to be asked by investors

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Questions I wouldn't want to be asked by investors

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1. Are you committed? How can you be when you have other work?
2. Will this be your priority?
3. If your business plan assumptions are right then why not invest right now?
4. If retaining one foot in the University is a USP, what happens if they stop external work?
5. You're low volume, what happens if you have 6 months with no new work?

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Midlands Mindforge: Midlands Mindforge – Brilliant ideas | Successful businesses | Global impact
Midlands Innovation: Home (midlandsinnovation.org.uk)
D2N2 Growth Hub: Growing Your Business | Help and support to grow your business - D2N2 Growth Hub
British business Bank: Start Up Loans - loans for businesses of up to £25,000
NBV: Nottingham Business Venture NBV Business Grant - NBV
First Enterprise: Small Loans for Business - Start-Up Funding - D2N2 Growth Hub

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Ideas:
- Local chambers of commerce
- Business links
- Old RDA style schemes
- University's
- Business Parks
- Creative Quarter Nottingham
- University purchasing consortia
- ARMA / eARMA

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Limited company to protect owners and formalise / future proof structure.

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patenting - nothing patentable in the business idea
copyright - open reports etc will be copyrighted
trademarking, registered designs, and other protective legal mechanisms - can be applied to logo, not yet applied for.

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The aim with the company is to grow to such a degree that it can engage both founders full-time. One is full time, the other is substantively employed at Director level in a University. The aim being for a full transition in 5-10 years, the experience and links gained in other roles will continue to enhance business. Financial Harvest e.g. Sale does not feature currently. The two options are voluntary cessation e.g. walking away when and if founders wish to retire or stewardship. In many senses this will be driven by the success of the venture, if business levels support recruitment of other core staff the stewardship seems likely, if not then the business will naturally wind up with the founders interest.

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Risk 1: Over-reliance on a single client / loss of business. To date over 50% of turnover is from UoH. Whilst staff capacity is an issue to growth and there is an opportunity to undertake some replacement activity. Loss of this partner would severely impact profitability. Risk 4/5, Likelihood 3/5. Treat-Mitigation. Close customer management, build of new links within organisation, product diversification with partner. Revised Risk 4/5, Revised Likelihood 2/5.
Risk 2: Misteps on external compliance. Including in here is tax policy and rates, specifically on ensuring tax is paid at the appropriate level, and we remain compliant to IR35 etc. Risk: 4/5, likelihood 2/5. Whilst the business is in its embryonic form a sanction or call for significant funds could be ruinous. Treat-Mitigation. Accountants have been commissioned, and this includes business services e.g. company minutes as well as tax advice. We are also maintaining a 10% of turnover float to mitigate unexpected costs. Revised risk: 4/5, Revised likelihood 2/5.
Risk 3: Catastrophic failure to delivery. This would have a negative impact on reputation and customer relationship. This is especially a risk given the low levels of staff resilience (1 FTE core). Risk 4/5, likelihood 3/5. Tolerate-Mitigation. Existing ways of working, frequent catch-ups with client, internal review of documents do build in some resilience , particularly at the later stages where a delay / absence would be most impactful. Revised risk and likelihood remain the same.
Risk 4: Cash flow. Whilst margin is healthy, the business is reliant on a small number of large clients. University's do not always pay on time, and the majority of income arrives on delivery of product not at the order phase. Risk: 3/5, Likelihood 3/5. Treat-mitigation. Since starting we have moved our payment terms so that there is some income at the point of order, our fixed costs are low given that the majority of income is taken as dividends and we will look to increase turnover float from 10% to 20% of annual turnover during 2023/24. Revised risk: 2/5, Revised likelihood 1/5.
Risk 5: Data management / loss. Whether by accident or malware, this would have an enormous impact on what is a knowledge based business, as it would mean an inability to access active projects and legacy datasets and bid documents. Risk: 4/5, likelihood 2/5. Whilst we have two hardware links to access the drives, uptodate protection and cloud back-ups, we are lacking an offline store. We should archive all complete projects to a separate store, on another platform and prepare a data management plan to ensure we remain compliant with all legal requirements. Revised risk 3/5, revised liklihood 1/5.

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Marketing Plan Questions.
1. What's our market?
2. What's our product?
3. Who are our customers?
4. Threats and Opportunities
5. Competitor review
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6. Market Segmentations - geographical, product type, access means
7. Market Positioning; product quality, product use and application, product attributes and benefits and brand positioning.
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Price - high, place - product offer via intermediaries, People - customer journey, promotion - director as figurehead, processes - we are B2B so speed is importnat as is value, better aftercare, Physcial evidence - need to persuade clientsa to support our marketing via their channels, product - HIGH quality.

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1. We will operate in environmentally sensitive ways - we will be a net zero company by 2025
2. We will pay a living wage to all our employees
3. Our clients, our collaborators and our partners will be people we are proud to work with.
4. Our workforce will represent our community(s)
5. Our workforce will be enriched by work - we will always keep learning

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Consultancy for Universities (BI3) Networks - Networks - Networks

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Consultancy for Universities (BI3) Networks - Networks - Networks

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Socials: We currently don't do much social networking. I think there is the potential, much of our work is based on insight and frameworks that could be shared (with the proprietal elements removed). I.e. Funder profiles and interests, insights into application or even pieces on how to write and implement good governance frameworks. That would whet the appetite of potential customers and give them value - but what it wouldn't give them would be the expertise of experienced practitioners or time which is what they pay for. There would also be an opportunity to link our clients and collaborators together.
Real life: whilst no-one attends first-Friday or other similar business events I can see a potential benefit -more so for attracting potential collaborators and creating links there that may lead to an enhancement of our business 'offer' or secondary link to work by enhancing others offers. That said we must be pretty good at networking, most of our business comes from old contacts or referals. There is a question about how those can be kept live when we work across a broad area.
Elevator Pitch: (no we don't have one - this is my first go). "We started SEA consultancy because, after working in University's for over 25 years, we saw a real market for companies that 'completed to spec, completed on time and valued the customer'. We knew that clients needed problems solving, and we had the skills and experience to do that, to save them time, to save them money,  to open doors to new funders that earns them money - that's great - but doing it well and making sure our clients feel like they get real value for money is just as important to us".
Competitor Analysis: We haven't done one yet - I'll do it for the assignment ;)

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Difficult to calculate the size of market. I found out from a palatinate article (Durham spends £10m on consultancy in five years – Palatinate) that Durham spent 10.1M, Cradiff and QM £11M each, oxford £40, Liverpool £16M and Bristol £26M. There isn;t too wide a range. I then used their academic staff FTEs to calculate an average of £0.0112 per staff member over 5 years. So multiplied up that spend of £890M over five years so an average annual market of £178M - this is the potential market in the UK HE consulting sector.
The total available market is difficult to assess. Using the same article I assessed that of the est. £2M spend in 2020/21, £700k was with KPMG (audit so non research), £300k with PA Consulting (research), £200k with Symtix (oracle finance - non research), £100k with inside-out (comms), £100K with cubane (research). So of known spend £900k of £1.3M (65%) was on non-research. Using that proportion that then cuts our total available market to £62.3M per year.
The served available market. The company has thus far serviced companies from the Russell group of research intensives as well as less research intensive universities. The work undertaken is not geographically constrained so there is no need to limit there. We do know that some of the larger consultancies such as SUMs, PA, Cubane have large call off contracts that would limit our ability to capture some work at least in the short-term, based on the DU data again we estimate that captures 55% of the market. £62.3M*45%=£28M. There are also some serves we cannot provide e.g. safety and estates services for research, or are not yet providing e.g. Green Book assessments for regional investment propositions.  There is further work to do in understand what this represents (one option is to use the public tenders website (Contracts Finder - GOV.UK (www.gov.uk)) or other webpages to generate an illustrative proportion - the data re very noisy. For pragmatic purposes I have assumed 50%. £28M*50%=£14M. The served available market is therefore £14M per year.
Penetrated market. In our first year trading we targeted income of £50k (financial year 2022/23), actual operating income was £75k. A market share of 0.005%.
Medium Term Financial Plan. The company is aiming for an annual income of £750k (2022/23 prices) by 2027/28. This would represent a market share of 0.05%

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Consultancy for Universities (BI3) - Sources of value creation

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Consultancy for Universities (BI3) - Sources of value creation

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Efficiency. Limited offer. We are a low volume / high cost business providing a bespoke product. Additionally our size is asymmetric to our clients - they are vast. We are by comparison adaptive and fleet of foot.
Complementarities. Significant offer. We have designed to and are able to access and create a wealth of services which fall under the research and research related purview of universities. Strategic assessment and market analysis are quite complex in themselves.
Lock-in. Average offer. By definition once a 'problem' has been solved that customer need has been met, however by generating trust we do encourage repat business, and by offering a highly customisable product we do allow for repeat business in related product areas.
Novelty: Average offer. We are not particularly innovative in how we engage with participants but satisfied customers do return. We also work on co-design of products and in new methods of production.

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Consultancy for Universities (BI3) - PESTLE

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Consultancy for Universities (BI3) - PESTLE

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https://miro.com/welcomeonboard/WEdJaXVYWDBmelE5YVk1cnBTdkJTMjRMMWJ1dlhEYmNXZWNXVVlVNzdmMjFpbWMyYm05SFRxUmYwMENxQVJFTHwzNDU4NzY0NTIzNTEwMjY4MDU3fDI=?share_link_id=381257497773

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Consultancy for Universities (BI3) - Ansoff Matrix

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Consultancy for Universities (BI3) - Ansoff Matrix

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Market Penetration: Expand beyond University current customers in the North East and Yorkshire.
Product Development:  Opportunities for new offerings; cubane style assessments e.g. for policies, 'elite match-maker service' for universities and companies,  green book economic assessments, strategy development, match-making service, reports to sell, bid development.
Market development: International Universities, do work for LEPs and combined authorities.
Diversification: ? Combination of the above. Based on generic principles we could engage with e.g.  EIT on public involvement - links exist. What calls funding bodies should put forward.

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Consultancy for Universities (BI3) - Week 3.5 Questions 

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Consultancy for Universities (BI3) - Week 3.5 Questions 

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1. The nature of your product/service (if this has changed from Week 2)
I think the product remains the same, reading the literature, we are best trying several services rather than focussing in at this stage and developing our expertise, skills and track record. One service I've been mulling over is a 'elite matchmaker service' for business and universities / CROs, private sector R&D is massive but there is also a desire by companies to outsource to reduce staff and sunk-cost. Universities also want this business, but finding out who to work with is generally done by existing links or where the CTO went.

2. Who you think your direct/indirect competitors are; who is providing the same product or service, where might your potential customers also spend their money instead of with you?
See competitor post.

3. What is your potential target market of customers?
I do wonder if Universities are the only game in town. Making an offer to the public sector more broadly e.g. in new service lines like Regional economic development could also work.

4. Are there any other factors your desk research has revealed - or that you would like specific feedback on?
The value of the business is in the two partners (networks and expertise) - which is great in that it limits the reproducibility of the model but it is also a limiting factor. How can i) the business grow when their capacity will become a limiting factor in short order. ii) Can the value be moved into the brand?
iii) When is the right time to expand and bring in other core staff?

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Consultancy for Universities (BI3) - Competitors

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Consultancy for Universities (BI3) - Competitors

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Direct Competitors:
Biggar Economics. Significantly larger but particular focus on green book analysis. Good track record and established customer base. Market share still small given constellation of actions. Framework provider, responses generally via tender though is preferred provider.
Indirect comparators:
Deloitte / PWC / McKinsey: Large scale consultancy services offered, generally engaged in significant new opportunity assessment and overall process review.

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Consultancy for Universities (BI3) - Porters 5 forces

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Consultancy for Universities (BI3) - Porters 5 forces

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-          Threat of new entrants. Medium. Actual sunk cost of starting a consultancy low however expertise, track record and networks are more difficult to replicate

-          Bargaining power of suppliers. Low – limited numbers for underpinning, somewhat high for specialist domain specilists.

-          Bargaining power of customers. Medium. HE is increasingly competitive and the need for insight and intelligence is keen, roi’s are potentially very strong for limited outlay (UoH £25k investment, £500k back)

-          Competitive rivalry: high – lots of suppliers, however in particular areas 2/3 comparators.

-          Threat of substitutes – low. Internal resourcing remains challenging within Universities. Specialist knowledge is required.

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Business Idea 3: Consultancy for Universities - This is the one I'm working on.

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Business Idea 3: Consultancy for Universities - This is the one I'm working on.

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Opportunity Recognition / Business Viability

UK Universities undertake approximately £9B of research activities every year (Appendix One) and another £1.5B of services for business including CPD and consultancy (appendix two). Although this is a significant absolute sum, these activities typically represent ca. 1/3 of an institution’s income, with the majority coming from student fees. Due to the increased competitiveness of the student market and the relative erosion of the value of fixed home fees, many institutions are seeking to diversify income further, particularly into the relatively high-margin services for business. At the same time, UK universities are under significant staffing pressure with wages typically accounting for over 60% of costs (Durham University staff costs are £330M of £530M). Realisation of their ambitions often requires specialised market analysis that is not in house (or tied up in house).

Additionally, Universities are working in a very complex environment, for example, in responding to regulations from UK Government in export control. Many smaller institutions cannot afford to hire staff with the necessary expertise. There is therefore a need to have access to a floating pool of expertise to meet very specific requirements.

Meeting these two needs, market analysis and expert support, forms the basis of the offer from SEA Consultancy Ltd. It is known that use of outside consultants has been growing across the public sector, with £2.5B spent by the public sector in 2020/21. Durham University spent £11M on consultants in 2020/21.

SEA Consultancy’s two directors have previously commissioned work for universities. It is their experience that the outcomes and customer service of existing providers can be highly variable, and that therefore there is a gap in the market for high quality/ customer responsive provision.

Business Costs / Assets

The assets of the consultancy are its two Directors. Collectively they have over 25 years of experience in HE, in both research and business services support. They bring with them different but complementary expertise in research governance, statutory reporting (e.g., REF), market analysis, data visualisation, citizen engagement, business and investment case development, and evaluation. Additionally, they have significant national and regional networks at senior level through which at least some business will be expected to flow, alongside public tendering.

Where required the company will augment internal expertise by commissioning subcontractors on an ad-hoc basis from the three other Russell Group institutions at which they have worked

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New business idea 2: 'I bet you I will lose'

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New business idea 2: 'I bet you I will lose'

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The weightloss market is worth billions worldwide and although there are a lot of ineffective interventions, there are also a world of effective ones. The problem is one of motivation. Being held accountable has been shown by companies such as weightwatchers to work, and gamification is also something that we know works for others, also so is naked financial gain.  My idea is for a programme that links these factors together. The proposition would be, say that you want to lose 10kg, at the point where your motivation was highest you would bet on yourself to make the loss in say 3 months. On the top level, if you win you can get the money back, if you lose then it gets given to a charity of your choice (small admin fee for the company either way). On the second tier, other people (family and friends) can also bet with you on your success (betting on your failure would probably not be helpful in most case, though some people would thrive) - if you win you would receive financial gain and if not the charity gains.

Update: Is this viable, sustainable scalable? I think perhaps. The greatest worry again comes from me-too versions run by established providers with better networks and who could tie into existing offers e.g. weightwatchers.

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New Business Idea 1: 30 minutes from where

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New Business Idea 1: 30 minutes from where

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So I'm looking for a house currently. It is really frustrating that on rightmove / onthe market etc. I can search by postcode or distance from postcode but that doesn't account for transport links or geography. I.e. a house may be 250m from my chosen location but a river is in the way. My idea is to  overlay transport links (public, car, walking / cycling trains etc.). onto the search to show how far away potential areas are not in distance but in time. This is I think especially useful in the era of hybrid working when you don't need to travel so often to work so might suffer a longer commute to work. The search then would overlay transport information. For example I will only go by bike and train and travel for an hour to Edinburgh, the diagram would have a central hub around the city with spokes stretching out along the trainlines.

Update. This functionality does exist in some form in rightmove, the technical hurdles to improving this are not really in my skills set and rely on proprietal information owned by google amongst others. Therefore it fails on the technical factors of success (duncan) and there is significant risk that a competitor could easily outstrip any work done by virtue to access to resources and information. A related idea in the housing sphere is to try and provide an aggregation service for self-builders, local authorities in the UK have a due regard responsibility to cater for self builders but still finding a plot remains the biggest single opportunity. There is definitely a market need to help source these, a consortium approach opens up scale in identifying and bidding for larger plots or even accessing some from established homebuilders with large landbanks. Whether this is a match-making service or actual investment vehicle needs thought.