Corporate Structure & Business Plan

I’ve been playing my new trial account toon for a couple days now.  At the moment, my goal is to start mining in a destroyer, then devote the rest of my trial account’s time to getting into a retriever.

In the mean time, I’m going to mine until I save up about 50 million (not counting the cost of my future retriever).

Why am I pursuing these goals, though?  If I’m putting together a corp, wouldn’t it be better to start recruiting right off the bat and getting organized for production?  Well no, unless you’re the perfect CEO who’s been playing EVE for years, doing that pretty much dooms your corp to failure.

Here’s why.

When you’re starting a brand-new corp, you need to have a few things in place before you ever start recruiting.  First, you absolutely have to establish corporate structure, something that says ‘this is what my corp is, what it does, and how it does it.’

This doesn’t have to be an all-out constitutional document.  It can be as simple as a mission statement, followed by a few operating procedures and something that will make people want to join and stay.  For example:

“X corp specializes in mining highsec ores to be used in the production of tier I items.  Profits are shared by all members fairly according to their role in production."

There you have it.  Simple, clear, and informative.  It lays out what my corp will do and our members’ benefits.  Now I have something that I can communicate to prospective recruits and we can always refer back to this statement for guidance.  ( Notice is says profits will be ‘shared,’ not ‘shared evenly.’  I’ll get to that in a moment).

Now back to why I’m doing what I’m doing at the moment with this new toon.  I haven’t been recruiting yet because it took me a couple days to decide what kind of corp I wanted to make, and then figure out how I will run it.

Also, I’m in a mining frigate at the moment, and don’t have much in the way to offer any new recruits yet.  I’m training to at least a retriever before I start the corp so that I have some sort of credibility.  As soon as the retriever is out of the way, I’ll be going straight for a hulk, and probably an orca later.

The point here is that a recruit’s opinion of you depends a lot on what you’re flying when you’re first talking to them, or at least what your corp’s members are flying.  If they see you mining in a frigate, odds are they’ll be skeptical of joining you.

The 50 million will serve as start-up capital to help pay for station rent, manufacturing costs, research costs, etc.  It will also give the corp some padding in case we lose ships.

Which brings me to my second reason for not starting the corp yet.  Arguably, it is also my most important.

Wardecs.

Wardec is short for War Declaration.  In EVE, any player corporation can declare war on another corporation for a relatively small sum.  This allows them to attack your corp members anywhere, EVEN IN HIGHSEC.  Wardecs last for a week and can be renewed for the same price.  The costs change according to certain variables, but odds are if you’re corp is wardec’d, the enemy corp can afford it for awhile.

EVE is full of corps that specialize in smashing new corporations to drive-out competition.  If you start a corp without any ability to defend yourself or replace your losses, your members will quickly grow frustrated and leave.

My plan is, in a couple of weeks, to start talking to people I meet in local, in the NPC corp chat, and in Rookie Help, and find a few guys interested in starting an indy corp and a sister PvP corp (or find an established PvP corp that needs industrial support) before I even open the corporation creation box.  This way, I can have some members prepared before the corps actually launch should we be hit with wardecs from the beginning (it happens more often than you may realize).

In the meantime, I’ll be eating asteroids and working on my business plan.

A business plan is different from a corporate structure.  A corp structure is a general summary of how your corp works, what they do, etc.  A business plan lays out specifically how your corp intends to turn a profit.

In an industrial corp, it will state how your corp gets from ore to the final product(s) you will be making.  For example, my corp will begin going from highsec ores, to minerals, to teir I items, all of which will depend on the local market prices and available ore, facilities, etc.

My plan in particular will go one step further, assigning specific members to specific tasks in the production of our items, and how our members will be paid. 

Here’s the plan:

X players will run mining ops, all of which goes to the corp.  They will be paid FULL MARKET PRICE for their ore, - 2% for every jump from their base of operations to the manufacturing station, and another -2% from the manufacturing station to the nearest target market for our product.  They will be paid individually according to the excel spreadsheet found on EVE UNI’s website.

The advantage the miners receive here is a guaranteed market price no matter where they are (rather than having to sell to a low buy order), and not have to bother with hauling their ore to a trade hub.

Y players haul ore from the miners, to the miners’ base (unless there’s orca support), then the refined minerals to the manufacturing station.  Later, they will haul our product to market (until we’re able to place remote sell orders).  They are paid the 2% per jump cut from the miners’ pay.  If a mining op turns in 1,000,000 pyroxeres in a night (which goes for roughly 50 ISK/unit (50 mill ISK for total op yield)), then the hauler will make around 1 mill ISK/jump.

Z players manufacture our items at the manufacturing station.  When the items are produced, they are paid 85% of the ISK the items make.  5% of the ISK goes to the purchase of blueprints, 5% of it goes to the re-purchase of researched blueprints, and 5% of the ISK goes into corp savings.

XX players will research corp blueprints.  They will sell them back to the corp at 10% the cost of the blueprint.  This may need some more explanation.  Blueprints are bought by the corp and given to researchers who essentially are paid for their service at 10% of the value of blueprint for improving it.

So if we buy a BP for 1mill ISK, the researcher will make 100,000 ISK for improving it.  This allows the corp to make more profits faster and at less cost, which in turn will lead to the purchase of more BPs.

Profit margins will be small at first using this method, but as we grow, we will be able to produce more, diversify, and bring in a lot of ISK.  Also, everyone will be paid fairly, and make more ISK than they would have on their own.

This plan will likely change some as I spot obvious logical flaws in it (as is often the case with any plan), but it seems to work for now.

I’m going to keep eating away at asteroids till I reach my target of 50 mill, which I should be able to do before my trial account runs out.  Now that I have a corporate structure and business plan, however, my next goal will be to start looking for possible recruits.

In my next post, I’ll discuss different recruiting methods, strategies, and what to look for when you’re starting a new corporation.

Fly safe o7