Making a Successful Corporation, Part 4
EVE Online: Making a Successful Corporation, Part 4
MMORPG.com EVE Online Correspondent Sam Guss writes this guide to starting a successful corporation in CCP's EVE Online.
So you followed all the advice given in this series of articles. You went out and got yourself a book on business plans. After spending several sleepless nights you finally have in your hand THE business plan for your EVE Corporation. Then about a year later, after some success, your corporation starts rolling downhill and after a couple of months of this all you have left is a mothball fleet, a few die hard members and a broken dream.
Unfortunately, this scenario is a very real probability that you should face now, instead of then. I am not saying be pessimistic. If you are not overly optimistic, then your plan will never work. You have to have optimism, drive and motivation. I do want you to be prepared though. This doesn't mean you can't start anew. This doesn't mean you can't reform a different plan. What this does mean though is you should have what is known in the business world as a bailout plan.
The Bailout Plan
A bailout plan should be a part of your business plan. It doesn't have to be shared with everyone - matter of fact it should only be shared with trusted members of leadership. The bailout plan should have two parts. The first part should dictate under what circumstances the bailout plan should be put into action, while the second part should spell out exactly what is to happen during the bailout plan.
Let's go back and take a look at the bailout plan for Plasma Creations:
Bailout Plan for Plasma Creations
In the event of business model failure, Plasma Creations does have a bailout plan that we will put into action. This plan will only be used under the following circumstances:
- ¾ of Plasma Creations decides to permanently close down the corporation.
- Plasma Creations profits are negative by more than 10% of holdings for 6 months each of those 6 months.
At this point, Plasma Creations will keep its doors open for 14 days and close any and all recruiting. During the 14 days all operations will cease and the following will occur:
- A letter of recommendation will be written for every member to use as they see fit.
- All assets will be sold off and any debts paid.
- All monetary assets left will be divided evenly amongst the members and leadership. Members and leadership may buy individual assets from Plasma Creations at 25% below market value. These monetary assets will in turn be split evenly.
- On the 14th day, Plasma Creations will cease with all members and leadership being removed (or removing themselves) from the corporation.
While you do need to understand that sometimes things don't go according to plan, you should still however be prepared for success. After all no one starts an Eve corporation with any other goal - though individuals may define "success" differently.
One of the most important things you can do for your corporation is to actively recruit at all times. No matter the game, guilds, clans and corporations will always lose members. A study earlier this year actually estimated that as much as 2/3 of your membership will not remain a member for longer than a year. That means if you begin with 30 members, the chances are that only 10 will remain after 12 months.
There are two main approaches you can take when recruiting. An all-in approach, which in essence means you want as many members as you can find. This is an easy approach to recruiting and it basically suggests that you recruit, recruit, recruit. You will come across people you don't want or won't fit into your corporation and this approach doesn't mean you have to accept them. This approach simply means you want as many members as you can possibly get. Several successful corporations work this way.
The other approach is a "maintenance" approach. In this approach you have to determine how many members you want/need to maintain your corporation. You then continue to recruit to maintain that level. The best way to do this is through simple numbers. Let's say you want to grow a corporation up to 300 members. We know that you can potentially lose 2/3 or 200 of them in the first year. So, you want to proactively recruit 200 members in that year's time - or 17 members a month. This also means that your membership base will fluctuate some. This is also a good thing.
As a successful corporation you should be seeking to continually grow. Grow too fast and it means you can burn out members and yourself faster as well. Grow slower and you can also bore people. With the "maintenance" approach you could look at recruiting this way:
- 300 members to begin
- Recruit 20 members per month
- With a loss of 2/3 this means at the end of 1 year you will have:
- 340 members to begin year 2
- Ect. Ect. Growing at a rate of 14% a year
Only you can determine the right number of members for your corporation and what would be the best growth rate for it. As always this should be a part of your business plan.
Plasma Creations needs the following active number of members to ensure growth:
- Mining Division: 30 members
- Manufacturing Division: 10 members
- Logistics Division: 10 members
- Security Division: 30 members
- Total members: 80 members
Initial recruiting drive will be for 80 members. Plasma Creations expects to lose 60% of members within any given year. This means that Plasma Creations will need to recruit an additional 48 members per year in order to maintain a total of 80 members. In order to grow the corporation on a timely basis, it is estimated that Plasma Creations should grow 30% a year. Taking into account a loss of up to 60% membership base every two years, our recruiting numbers will need to be:
- 80 members initially
- 72 members within the first year (6/month)
- Goal of 104 members starting year 2
- 99 members within year 2 (8.25/month)
- Goal of 135 members starting year 3
- 115 member within year 3 (10/month)
In our final chapter to this series we will take a look at the day to day activities of your new corporation and how to keep yourself and your corporation on track. See you then.