Filed under: Marcellus Shale, Profitable Growth, Utica Shale
The Shale Gas Boom is Kicking BTU!
What’s new in the shale gas business? Gas prices have inched up and no drilling-related seismic disasters have happened just yet. However, the overall impact of labor shortages, safety needs and environmental regulations are creating problems that smart manufacturers are leveraging into opportunities.
Ever since ISNetworld (a group that assists companies and organizations with contractor and supplier prequalification, management and monitoring) became the dominant third-party data administrator helping Tier 1 companies hire better and more intelligently, there have been higher standards for hiring skilled workers. Unfortunately, there is a growing chasm between the needs of the employers for skilled laborers and the capacity of the local workforce to fill the openings. Those manufacturers who have superior workers are booming.
There is also a growing rift between the creators of environmental, workforce and healthcare regulations and employers who worry that if they ask regulators for clarifications, they expose themselves to audits and out-of-court settlements. This, in turn, is causing an opportunity for third-party providers of information to create a shield for wary employers from overzealous regulators. “Safe” regulation counseling will be a growth industry.
Here’s news of how the shale gas sector is progressing and what new opportunities are emerging:
- Distributors and trucking firms serving stores and gas stations are shifting some of their capacity to serve gas well sites by directly supplying them with food and other commodities. What can you sell directly?
- After grousing why his lunch wagon business could not break into serving well-paid workers, an owner found his simple answer. The customers prefer their “Community Coffee” brand (which is an energy industry favorite from Louisiana) instead of his local Pittsburgh coffee. Upon switching to community coffee, his business is back on track. What can you sell homesick transplants?
- As more Compressed Natural Gas (CNG) pumps sprouting up at manufacturing sites to refuel converted vehicles, several companies are fabricating CNG tanks to be placed on vehicles to extend their driving range. What else does a CNG vehicle need?
- At every step of the way western Pennsylvania’s and eastern Ohio’s labor the shale gas boom is exacerbating already scarce labor shortages for open jobs. Employers are finding that seeking welders at fast-food–level wages has gone from difficult to impossible as they are competing for this skilled wage earner against $50,000-$70,000 permanent jobs. Who is stalking your company for your skilled workers?
- Those in the temporary staffing fields are finding that their customers are asking for shorter temp–to–hire periods so they can get these workers health care and other benefits. This in turn is causing smaller manufacturers to have to stay under 50 employees so they can avoid the Affordable Care Act ceilings and circumvent providing health care altogether. Are you scaled to stay below the radar or on the radar?
- Safety continues to be a dominant demand of buyers throughout manufacturing companies and all those in the shale gas supply chain. Tier 1 Companies are demanding safety experience, programs and clean records from Tier 2s and Tier 3s. Is your firm MSA compliant?
In sum, the shale gas boom will continue to spin off its economic benefits. Customers will demand more capability and capacity in terms of people, transferring of risks, controlling of costs and the reporting of safety information. The energy business has centuries of experience confronting risks, avoiding obstacles and getting their business done. How can your business participate in helping those already in the gas industry to get their work done through your resources, energy and business savvy? Start thinking….
Birol Growth Consulting Helps Jeffrey J. Morella and the Complete Captive Solution, LLC Grow Quickly and Profitably Toward Long-Term Success.
Filed under: Business Growth, Pittsburgh, Profitable Growth, Uncategorized
In 1991, Jeffrey J. Morella opened Morella & Associates, A Professional Corporation and has built it into a successful practice focused on meeting the legal and tax planning needs of business owners. Over the years, Jeff’s expertise continued to grow as his clients faced increasingly sophisticated tax, insurance and business planning challenges. In 2005, Jeff began assisting his business clients in creating captive insurance companies as a cost-saving vehicle and to provide more flexibility for their companies.
Then in 2010, as Jeff watched the Federal Government’s punitive tax policies create an ever-increasing burden on the plans and dreams of small business owners, Jeff knew he had to find new ways to bring needed relief to his clients. In response to his large base of business owners’ pleas to reduce their insurance costs and preserve more income, Jeff began expanding his expertise in the captive insurance field of creating alternative insurance structures that reduce insurance costs, as well as provide opportunities for asset protection, wealth transfer, estate and tax planning, and business succession planning. These alternative insurance structures, specifically known as series captives, allowed Jeff to create, build and manage customized, independently owned Series Business Units (“SBUs”) for his clients.
As Jeff Morella’s expertise and success continued to grow with Series Captives, he knew it was time to spin off this growing practice into a standalone business that could establish and run captive insurance companies under its own brand. But how could Jeff do this? After watching his competitors stumble when trying to run similar businesses as a sideline to their legal, accounting or insurance practices, he was determined to correctly and independently build his business right from the start. But in 2012, as his questions of how to price the services, establish the distribution network and build the business infrastructure mounted, Jeff knew that these decisions called for business growth expertise outside of his legal training, and he needed help now. That is when he called in Andy Birol of Birol Growth Consulting. As Jeff states, “I was impressed by Andy’s out-of-the-box thinking, as well as how quickly he built his business growth practice in Pittsburgh, so I called him in, dumped my files, business challenges and goals on his lap, sat back and watched how he would react. To my delight, Andy quickly grasped, synthesized and framed all my thoughts into four key tactics for us to build my new business.”
Birol Growth Consulting Solution:
Upon his engagement, Andy tore into Jeff’s financial analyses and interviewed his business partners and clients. Andy quickly recognized that while Jeff had created a breakthrough, proprietary approach to providing “The Complete Captive Solution” (a/k/a the new company), without an equally sophisticated approach to marketing, selling, distributing and delivering its value, Jeff could not achieve the results he expected. What specifically did Andy accomplish for Jeffrey J. Morella and his new business, The Complete Captive Solution, LLC (“CCS”)?
Andy worked with Jeff to:
1. Develop CCS’s clear go-to market strategy and its tactics, before designing the organizational chart and key company positions.
- Andy designed the needed roles and responsibilities and defined the COO position and actually identified CCS’s new COO, Mr. Shep Werth.
2. Frame CCS’s marketing challenge as a distribution problem, instead of a demand problem.
- Andy suggested Jeff take his message directly to his ultimate clients, business owners, with the support of their advisors.
3. Andy outlined key sales and marketing tactics and located the resources, people and tools needed to have it up and running in months.
- He simplified the complexity of communicating the details of what a series captive is, who it is for, and how it works best for certain business owners.
- By introducing and overseeing a professional marketing communications specialist, The Karol Company, Andy assured CCS’s messaging was simple, engaging and consistent, starting from its website through its sales collateral and finally throughout actual client proposals.
Within months of Jeff, Andy and Shep establishing its strategy, The Complete Captive Solution, LLC is up and running as a going concern, having secured it’s licensing, established its key business partners and landed its first 10 clients. Sales are on budget and both business owners and their advisors have recognized CCS as the premium provider and clear expert in the emerging field of series captives and how a business owner can best use them.
When Jeff Morella was asked, “What was Andy Birol’s contribution to the genesis of CCS?”, Jeff replied, “Andy Birol took my vision of offering an innovative service and guided me in turning it into a standalone business, built on a strong foundation and driven by clear business principles. This assures it becomes a very strong, profitable business with sustainable growth. Andy’s creativity, business experience and tenacity were the missing ingredients I needed as a lawyer to help me build an independent business. I would encourage any business owner and their advisors to bring Andy into the job or case. His unique style of independent thinking, business judgment and relentless follow-up make him a special breed of consultant. I am fully confident that my dream of building a standalone, sustainable business is being realized and I am proud of the results that CCS has already achieved.”
Filed under: Business Growth, Profitable Growth, Uncategorized
It seems every decade a new “roadside accident” appears to distract you from driving your business down your highway. In the 1990’s it was Y2K, in the 2000’s it was Sarbanes-Oxley. Now, with the help of our government, lawyers, accountants and healthcare experts, Obamacare will be the epic 500-car pileup of the century. Make no mistake; I am not challenging the merits of universal healthcare; just the burden it will place on business owners everywhere.
After attending three healthcare briefings, I am convinced that in addition to the added costs of conforming to the thousands of requirements, Obamacare will require you, as a business owner, to spend time you don’t have, become expert in handling confidential employee health issues you’d rather avoid, and could cost you as much in fees as actually paying for increasing health care benefits.
Or does it have to? Here are six steps you should take to minimize your impact, leverage your predicament, or even exploit the opportunity that Obamacare places on your business.
By now, you’re seeing the impact that Obamacare will have on your choices, costs, and even the type of health benefits you must and can offer. Will you choose to pay the added price tag to your employees in salary, or to companies in premiums, or to the government in penalties? Have you budgeted for your time? For the impact your choices will have on your HR and talent management strategy? Which service providers will you have to hire and trust not just to advise you on the right health care choices but to leverage the impact these choices will have on your overall business strategy? For example:
* How will your workforce change based on what you offer your employees versus what their spouses need and obtain at their place of work?
* If you choose to buy your way out of Obamacare at a cost of $2000 per employee per year, will your workforce become younger and less experienced?
* Will you need to hire a VP of HR instead of relying on your CFO or office manager who is hard-pressed to handle benefits as they are today?
By this point you’re probably thinking up your own list of how Obamacare will change your business. Well, you can either look at your glass as half-empty or half-full. Here are six steps to confront the impact of Obamacare head-on:
1. Revisit your strategic growth plan and look at it from the perspective of how your business relies on its key players, the entire workforce and how your business fundamentally relies on people to get its work done.
How will these three factors change and what does it mean for your businesses success and your ownership plans?
2. Factor in your organization’s Best and Highest Use®. Will your company’s people continue to deliver on what it is good at doing, likes doing, and is valued by your customers and the marketplace for doing? Your firm’s investment in providing personal service will likely increase and you will need to ask your customers to pay more for it.
3. Fundamentally choose whether your company will or won’t be a net benefits provider. Family-friendly companies may want to offer full Obamacare while other companies might pay the higher wages but choose to opt out. Obamacare will impact these decisions more than you may first imagine.
4. Take a hard look at where you as the leader spend your time and energy. Imagine spending more days to reconcile the demands by:
• Meeting with your outside healthcare advisers and providers,
• Making hard decisions in terms of the above three points,
• Communicating the complexities of your decisions to employees who know less and fear more than you do, and
• Building your firm’s internal capability to oversee your Obamacare health benefit plan so it helps your employees and meets your goals.
5. Meet with and ask very hard questions of your existing health benefits providers and advisors. How are they going to step up and meet your challenges as expressed above? In my brief exposure to date, I am very concerned as to how stretched your insurance brokers, benefit providers, and financial experts are going to be as they attempt to meet the demands of their clients. Beyond the revenues they will earn, I question whether they have sufficient staffing or business plans to meet the needs of their clients themselves.
6. Finally, please accept that you and your business can only focus so much on Obamacare. Beyond your employees, you need to refocus on serving your customers, ensuring your operations are delivering and that your administration continues purchasing smart and collecting receivables. Remember, your vendors and your customers will be going through the same pain and suffering in implementing Obamacare as are you.
In the middle of WWII, President Roosevelt created Social Security and health care benefits to incent military spouses to go to work and become the “Rosie the Riveters” who ran our wartime factories. In doing so, Pres. Roosevelt also forced business owners to become healthcare experts; a job no entrepreneur ever sought. Pres. Obama has not just brought universal healthcare and its benefits to the many who need them, but has created the mechanism and requirement to socially engineer all businesses. So, to quote Bette Davis in “All About Eve”, “Fasten your seatbelts, it’s going to be a bumpy night.” Remember this as you drive your company forward down your highway; make sure it’s running well and keep your eyes on the road to avoid the pileups, traffic jams, and detours that are coming.
There’s an old saying, “It takes 20 years to become an overnight sensation.” Our confusing shale gas opportunity is a great example of this. Every day we hear “shale-chatter rants” on low gas prices, nagging environmental concerns and passive-aggressive government resistance; it’s easy to dismiss the opportunity. But there’s no doubt of three new signs of progress and many local firms are seizing their days now.
Here are the three inarguable signs and examples of local business exploiting these:
* It’s a Demand-Side play: Additional polyethylene Cracker plants are coming.
* Anticipated development of midstream pipelines: The Pittsburgh Airport signs a $500 million shale gas lease.
* Conversions to gas: Giant Eagle announces they will put compressed natural gas pumps in Get-go stations.
So what’s the good news and what does it mean?
* It’s a Demand-Side Play: Until domestic gas prices rise, gas is most valuable when it’s used near where it is extracted. And this is bringing good news daily to WPA. Up to two more polyethylene Cracker plants, beyond the one proposed for Monaca, are anticipated to be built in the WPA/OH/WV shale corridor. Each one of these plants, according to Mr. Jim Roddey, can create up to an additional 100 vendors-companies who will open locally to serve them.
* Anticipated Development of Midstream Pipeline: Consol just purchased the Pittsburgh Airport’s gas rights for a $50 million fee and royalties of up to $500 million. They know that pipelines will be built to justify their investment. What will the airport do with their windfall, which must be spent on airport projects? Beyond the expansion of the business park, there is talk of building a mass transit line between Pittsburgh and the airport. This will create many jobs, supplier opportunities and economically develop the corridor.
* Conversions to Gas: Giant Eagle is preparing to install compressed gas pumps in all their GetGo stations. Their bold move, plus that of independent players like Cleopatra Resources, is proving that the transition to wide-scale local consumption of WPA-drilled gas is underway.
While it hasn’t yet been 20 years whereby we can expect the shale gas boom to become our overnight phenomenon, our good news is undeniable. How can your firm take advantage of the short-term swell in those developing ways to consume gas locally? Put some thought into it. There must be at least one way!
In our hearts we all believe the saying, “Nobody is indispensable in a business, not even the owner.” But whether it’s a really bad flu or a broken leg (I’ve survived both) the worst part is the resulting depression as you are out of commission and recovering. So what does a business owner do when he or she is coping with the damage and the resulting blues? What should you do when you, the owner, are simply knocked off your game? Especially when there’s no one to pick up the slack?
Having survived my share of challenges and watched hundreds of business owners cope with theirs, here’s the progression of what I’ve seen happen when a business owner has a meltdown. In progression, an owner first loses his or her ability to
- Approach new prospects and close new customers, then
- Create new ideas, products and services, then
- Serve and oversee existing customers, partners and employees, then
- Focus on individual projects not involving other employees, customers or partners.
So if you are seeing this in yourself, your partner or another owner what should you/they do?
- Don’t fight it. Get the help and take the time you need to heal.
- Use the time to dream and question. If you are really knocked for a loop, your self-doubt and anxiety at some point will emerge and fester. Take advantage of the opportunity to look at all sides of what you are doing and why. Just don’t make any decisions until you are feeling better again.
- Control what you can and can’t do and know the difference. By nature we owners are control freaks. Getting sick is living proof we aren’t in charge. Rely on your faith, loved ones and the healing powers of sleep. Do nothing for a change.
- Count on your reputation, talents and value. Mortgages will get paid, payrolls will be made and most clients will accept your delays based on your good reputation. The ones who won’t aren’t worth keeping for the long term.
As you start to heal, re-engage back into your job in the reverse order of the above 4 steps. Start first with your routine, individual tasks and then progress back to creating new value and selling it to prospects. Misfortune, sickness and the general stress of running your business will eventually take its toll, throw you for a loop and require you taking some time off. Consider it a forced vacation and enjoy your time off, even it is costing you a lot in the short run.
Filed under: Business Growth, Marcellus, Marcellus Shale, Pittsburgh
At this point, you know where to point your business to put food on your table. You know your core customers and target markets and can read the signs that tell they will or won’t buy more from your firm. For example if you:
- Sell technology to early-stage companies, you’ll pounce on those who get venture backing.
- Are in the building trades; you study the Dodge reports to see which owners and contractors are bidding jobs and work to get approved as a small or minority-owned business.
- Target the federal government, you are GSA and military-spec approved and watch what Congress is funding.
But now there’s all too much talk about the Marcellus and Utica Shale opportunity. If you’ll think of your core business as your “steak” consider the emerging energy sector as your “dessert.” While it won’t sustain your business it would be a very nice way to supplement your main “course.” So, what are the signs that its time to pounce? How do you approach this trillion-dollar segment especially when your services or products aren’t a neat fit with what gas drillers, landowners or energy companies buy?
First, here’s a quick review of Shale Gas 101. Watch and mimic the owners who are successfully targeting energy industry suppliers — and those who supply their suppliers, for example, trucking companies and those who supply their trucks. For more of a brush-up, visit www.marcellusshaleboom.com.
Here’s the next step: Learn the key signs when your business should pounce on its Marcellus or Utica opportunity? With gas prices down and environmental concerns up, what are your leading indicators that now’s the right time for your business to enjoy its just Marcellus desserts? Here are three signs (of many) that I’m seeing that might apply to your business.
1. Find Your Catbird Seat. Medium and small technology firms who can aggregate content and deliver it over the cloud are thriving. By exchanging information between “Tier 1’s” (CONSOL’s) and their Tier 2 and 3 suppliers, these firms are adding value in the safety, environmental, HR and any other field where compliance and record keeping is imperative.
a. Your Sign to Watch For. Watch for where and how the Tier 1’s are creating MSAs (Master Service Agreements) to manage their vendors. How can you become their go-between?
2. Hype Where’s The Pipe! Despite the apparent slowdown in drilling and gas prices, midstream pipelines are being built and furthermore, Hart Energy’s Marcellus Midstream Shows grow each time they come to Pittsburgh.
a. Your Sign To Watch For. Constructors announcing pipeline projects that move gas from local stockpiles to consumers can mean business for you. Watch what’s happening in your target markets. Pipelines create countless follow-on projects and potential work for your firm. The more piping that is sold, the more likely Tier 2 and Tier 3 shale gas-related businesses will bloom for you to approach and close.
3. This Isn’t Your Father’s Gas-Guzzler! Look who’s converting their oil or coal operations and vehicles to natural gas! And coal plants are closing or converting to LNG along with schools and residences. With impending new regulations for green trucks and the need to scrub diesel trucks, more and more gas is being used for local consumption. In rural areas, there is a kit being sold to convert a vehicle into a “hillbilly hybrid”
a. Your Sign To Watch For. Look for coal-related businesses. They need your help in “converting” their businesses to serve gas-fueled customers. Remember, conversions for consumption means the gas opportunity is growing regardless of the low price of gas because businesses are using LNG here and now.
Understanding the leading indicators of how the shale gas opportunity can benefit your business may not be critical to putting food on your table. After all, if your core business has survived this long, it’s likely to prevail regardless of whenever the local shale gas industry matures. But if you look forward to dessert, then consider put some of your “energy” into learning what signs point to your firm’s growth in the energy business.
Filed under: Business Growth, Pittsburgh, Profitable Growth, Uncategorized
Recently I lived the dream of every rock music fan: For four and a half days my friends and I sailed on the MS Legend Of The Seas alongside 27 classic rock bands who played nonstop on three separate stages. And sailing with 3,400 like-minded baby-boomer fans alongside our rock heroes created an instant community relishing the soundtrack of our lives.
What did I see, listen and learn from bands whose prime passed 30 years ago? Seeing rock leaders sustain their talents and keep performing for their fans inspired me to consider how business owners can do it too. If you wonder how you can keep on thrilling your next generation of customers, who like, rock fans may not even have been alive when you first got started, here are my five lessons and implications for your business along with some great concert photos courtesy of my friend Vickie Sullivan.
1. Keep your band performing like the headliners they once were. Paul Rogers of Bad Company, Free and The Firm struts and delivers a great show as if he was at Madison Square Garden.
- Implication for you. Passionately believe in your business’s value and keep delivering it powerfully and perpetually.
2. Ensure your band always has an inspired front man. When Foreigner’s leader Mick Jones replaced his lead signer Lou Gramm with young Terry McDermott, he saved the band and added decades to its life.
- Implication for you. When your business leadership requires you to replace founding members with energetic stars, put your business’s needs ahead of its past.
3. Love your core fans and they will create the next generation. The Marshall Tucker Band are the masters at drawing their audiences into their music. After hearing their leader Doug Gray tell their story, you want to sing his band’s praises as much as their songs.
- Implication for you. Your business undoubtedly has customers who care for you above and beyond just what they buy from you. Remember them and you’ll see cheerleaders you didn’t dream you still had.
4. Assume it’s all about you and you can lose your legacy. We can accept that our idols are getting old, but cannot listen to them live in their past instead of connecting to us in our present. Watching Black Oak Arkansas’ self-indulgent behavior onstage was off-putting.
- Implication for you. Double-check your business isn’t banking on its history but is building on its current successes to serve its customers in the future.
5. Classic fans know your band; new audiences want your hits. Rolling Stones’ saxophonist Bobby Keys, surrounded himself with a fresh young band and delivered his timeless songs like “Brown Sugar,” “Can’t You Hear Me Knocking,” “Whatever Get’s You Through The Night,” and “Delta Lady” as if he was still playing with Mick Jagger, John Lennon and Joe Cocker.
- Implication for you. Project your business legacy and value forward through new channels and voices. Your voice will be recognized as the founder as it carries on loud and clear!
For many of us, the music of the 70’s and 80’s is the soundtrack of our lives. As I watched Bachman and Turner sing “Taking Care of Business” it stirred me to recall my loves, triumphs, and challenges and then to think about you, my clients and your needs. As they play their hearts out in their later years, let’s be inspired by their legends and lessons as we EXTEND our business legacies!
With this January’s debut of the MCI, WPA business owners are taking a new and important way to voice their business confidence as well as where they intend to grow their businesses. Here are early results:
- Consistent with national polls, WPA owners plan to invest the same dollars in 2013 vs. 2012 in their businesses, but employ the same people or fewer to get their work done. Regardless, respondents expect to increase their business’ profitable sales in 2013.
- When asked to rank, “Where’s your firm’s next sources of growth?” a majority chose domestic US, then locally (from non-Marcellus sources) followed by Marcellus sources and lastly internationally.
- By general business sector, respondents see their growth coming first from wholesalers and distributors followed next and equally from manufacturing and government markets.
Finally you have a simple, regular way to join your peers to answer and learn an accurate, local and timely answer to the age-old questions, “How’s Business?” So take 3 minutes now and state your confidence on your MCI.
The MCI was developed by business growth expert and author Andy Birol and SMC Business Councils to professionally gather analyze and report back on your critical feedback.
Filed under: Marcellus, Marcellus Shale, Profitable Growth, Uncategorized
What’s more frustrating? Trying to devise new products you can introduce to the shale industry or counting all the obstacles you face to grow your business? Do you ever wonder how another culture or society might tackle your opportunity and challenge in the Marcellus Shale? Two recent experiences have me thinking about this. First, I just returned from a month’s travel through the world’s business shipping channel, the South China Sea, visiting 6 countries and witnessing how China, Vietnam, Cambodia, Thailand, Singapore and Hong Kong are succeeding despite wrestling with big problems. Second, I just saw the anti-Marcellus movie, “Promised Land” which, while entertaining, paints the shale gas industry and its opportunity as absolutely evil and the good people of Pennsylvania as painfully naïve.
So I was just thinking…what would happen if the Far East had the potential windfall of a shale gas opportunity and how would they exploit it? First, here are some of my observations on my first trip to the region.
- No matter which country I visited, everyone asked me the same question, “Is America going to avoid going over the fiscal cliff?” When I asked them why they are so worried, they say all they need America to do is to thrive as this benefits the whole world. When I asked, “What else do you want?” They said, “Nothing” they said, since they believe they are otherwise self-sufficient and accountable.
- As tensions ebb and flow between the Chinese and their neighbors in this historically volatile region, every country is focused on working hard and is hopeful that the New Year will bring good luck. Nothing more. Nothing less.
- The region’s economic winners, Thailand, Singapore, Hong Kong and China, succeed within tightly structured systems and under autocratic leadership, and yet their people yearn for the freedoms of choice, entrepreneurship, religion and lifestyle we take for granted here in the US. They don’t believe they have what they want so they make the best with what they are allowed.
- Whether it is truth or urban legend that the Chinese word “crisis” is a combination of the words, “danger” and “opportunity,” the incredible futuristic cities of Singapore, Bangkok and Hong Kong makes one’s head spin in wonder of how did they do it?
- Singapore’s corporate leadership in sustainability with economic growth based on energy and commodities.
- Hong Kong’s capitalistic perseverance is incredible in the face of China’s increasingly autocratic heavy hand.
- Bankok’s melding of modern ways with a benevolent monarchy and traditional Buddhism creates a most attractive culture and country.
So what lessons can Pennsylvania manufacturers learn from one of the world’s most competitive and challenging regions on how to seize our shale gas day? Here are some thoughts:
- Find opportunity in crisis. Transfer manufacturing know-how from serving coal and oil producers to serving gas companies. Some of these companies, like Consol is, itself shifting its operations from coal to gas.
- Make the best of what is happening within your culture. Exploit the local consumption of gas. With low gas prices, local PA manufacturers can benefit from using gas in their operations and by anticipating the needs of energy companies to convert their coal-fired plants to gas.
- Compete. As plastic-producing plants come on-stream, how can local job shops serve them and their down and upstream supply chain?
- Use our freedom and creativity to explore and improvise. Which manufacturing opportunities can be uncovered from the shale gas millions being spent in the transportation, infrastructure and construction sectors as they benefit from the building of pipelines?
Sometimes the positive examples of far-away regions are just as motivating and mind clearing, as they are practical and applicable. And sometimes the locally painful stereotypes exploited by Hollywood can be sufficiently antagonizing as to cause positive breakthroughs.
All I know is we have a great big opportunity that the rest of the world envies and is watching how we exploit it. I look forward to helping to identify the best in the Marcellus for every manufacturer in the region!
Filed under: Business Growth, Marcellus, Profitable Growth, Uncategorized
The fact is, without technology, the opportunities Marcellus has spawned would never exist. In all the talk about the cracking technology that drives natural gas extraction, we’ve overlooked that cracking came as a monumental, technological breakthrough.
But more to the point. It’s now time to hone in on how you can inject your technology into the Marcellus opportunity. And the best way to do this is to understand Marcellus not as a single, monolithic opportunity, but as three tiers of opportunity—direct, indirect, and induced. Look at it this way and you can find a way to inject your technology into serving this emerging-energy marketplace on your terms.
Let’s first take a look at how you can target the tier-one, direct opportunity, admittedly the riskiest of these three tiers.
In a recent conversation with the heads of supply-chain management for Seneca, Chesapeake and Range Resources, they all insisted that new vendors must first address a proven need they already have and then fill out a Master Service Agreement (MSA) before they can do business in the energy sector. Generally, a Master Service Agreement specifies generic terms like payment terms, product warranties, intellectual property ownership, dispute resolution, and the like.
They further emphasized that those vendors who stand the best chance of successfully entering the Marcellus market will:
- Focus on their Best and Highest Use (BHU). This means concentrating on what they do best, what they like to do, and what a market values and pays them for.
- Build on their customer base and not try to be a total-solution provider
- Avoid trying to grow too fast, if doing so risks jeopardizing their service levels.
- Under sell and over deliver.
One of the speakers also let it slip that if you’re going to serve the energy industry, you have to be ready to work at three in the morning, if needed, and to be on call and on-demand as if you’d been hungering for months to secure the piece of business you land
This tells me that an opportunity can exist for you to be ready to breakthrough with your disruptive technology if and when another vendor slips. That’s when you’ll most likely be able to leapfrog over any existing MSA and serve a client who needs you and will work with you.
Nonetheless, if you insist on going after the big boys, then keep reminding them of FUD–Fear, Uncertainty, and Doubt. The more you convince a purchasing agent of the downside of not solving their problem by going with your services, the more likely you are to appeal to their inclination to avoid personal career risk.
Next time, I’ll discuss the less risky opportunities in the indirect and induced tiers, where more opportunities exist for your technology.