Running an Industrial Corp

Originally published in the October issue of The Industrialist

OP
https://forums.eveonline.com/default.aspx?g=posts&m=3653701#post3653701

Recently, in the EVE Online forums, Volundark Gallente posted a question about how to run an industrial corporation. I see the question a lot and there are always opinions on how to do it. I don't know what is good, better or best. I have tried many different approaches, but it always seems to default back to everyone doing their own thing but having fun while doing it.

The question is thought provoking. The answer seems obviously easy. The implementation is maddeningly difficult. There are many pit falls. It never fails, but any time you have multiple people wanting the same outcome, you have multiple ideas on how to do it. Reminds me of a quote I once heard. “You will never satisfy 100% of the people involved 100% of the time. Human nature does not allow it.” However, the author escapes me.

I have been running an industrial corp for a long time. I still can't wrap my head around it sometimes.

If you want clear cut: Do mining ops, have the corp take a cut and then either buy back the minerals from the miners at a fair market price (I figure the buy order at the nearest market hub) or give them back to them to do their own manufacturing. Buying back the minerals is the best for the corp as you get the materials at a good price, but some people want the minerals for themselves. You can't blame or penalize them. Why would they stay if you did that? If you want to dive deeper, make sure you are ready to go full throttle.

Doing mining operations is the simplest way to run corp-wide activities because it is easy to sort out who gets what when the operation is over. Doing manufacturing. Not so much. As another player pointed out in the forum thread, if one person doesn't log in for a few days, your production timing goes to shit. If this happens, you could be in for some serious trouble. Think about it this way. You have a 4 stage process. 1 person invents an Arc (Amarr jump freighter (T2)). Another person makes some or all of the capital components. Another one makes the Providence hull. Then 1 person finally builds the Arc. Just imagine, the Arc sells for around a billion or so. The corporation would have about 700 million ISK held up in the production process. If you happened to have a buyer lined up, he might not want to wait an extra few days because one of your people didn't log for two or three days. Unless you have a lot of liquid capital, this could cripple you until you find another buyer for the Arc you just made. Tying up that much ISK for a small corp could lead to devastation. Not only that, but the people that work on the project probably won't get paid until the Arc sells. Any delays could cause a huge backlash in the corp. People are very quick to judge and unless you know your corpmates well, they might try to hang you from the gallows pole thinking you stole the ISK or that you are incompetent.

Back to personal experiences. Like I said, mining is easy. It is cut and dry. I won't tell you how I ran that as there are a million other guides and just using common sense will help you a lot. There are a bunch of mining operation spreadsheets and logging programs that I will discuss in another article. I just mention them here to point out that these programs and spreadsheets do a lot of the tedious arithmetic for you.

Perhaps it was a year ago now, I tried something different. I asked corp members to help build some T2 drones to sell on the Market or Bulk Trade mailing list. A few people made the drones and I turned them into T2 drones. I had the builders give me a materials list and then either gave them back the materials out of the corp surplus or paid the market buy order value for them. To this point, they are basically working for free. Here is were it gets tricky. I shouldn't use “tricky” because again, it is pretty cut and dry. Once the item sells, the idea was to give the people who worked on the project some of the profits. I have really good people and as it was more of a trial run, we just rolled it back into the corp wallet to be used again. I believe there was a string of war decs and we put the project on hold. The point that I noted as “tricky” is how does one decide who gets what percentage of the profits. A project like constructing T2 drones is pretty straight forward. You have T1 drones & components. I guess if you figure out what percentage of the project a person is responsible for, they would be given that percentage of the profits. I haven't done this yet, but I am just spit-balling. We industrialists like numbers, so here is an example based on the value of the project stages. I am using nice round numbers so you get the idea.

Model 1
Person A – 1,000,000 (cost for T1 manufacture)
Person B – 2,000,000 (cost of T2 components)
Person C – 1,000,000 (cost of T2 final manufacture)

The total cost of the job is 4,000,000. We sell the T2 drones for 6,000,000 netting 2,000,000 in profits

To divide those up, Persons A & C each participated financially in 25% of the job and Person B forked over 50% of the total financial cost. When the sale is final, in this simple model, Persons A & C would get 500,000 and Person B would get 1,000,000.

Of course, this doesn't account for a corporation's cut. If the corp took 15%, that leaves 1,700,000 left to divvy up. Using the same model as above, Persons A & C would get 425,000 each and Person B would get 850,000.

I find this would probably be the cleanest and most fair payout scheme for production. If there were only two people, technically Person A and Person B would each get 850,000 each.

Just to throw in another number. If Person A did the T1 and T2 component manufacture, then that person would be bearing 3/4” of the total financial responsibility of the project and therefore their payout would be 1,275,000 and Person B would get 425,000.

Of course, if you are selling a bunch of items, the sell price might trickle down as you play .01 ISK games, but you could track that or I guess or it could be written off.

The larger the project is, the more micro-managing needs to be done. This is where having trusted people help you out. I haven't done a large project, yet. I am thinking about making some jump freighters once we get a larger cushion of capital. That would tie up a bunch of ISK for a while. I have never sold one, so I am not sure how long they still on the market. I am tossing up JF or Carrier. I think the carrier would be easier to sell though. Anyway, in order to be successful, you need to think of all the factors. You are going to have to pay the people involved in the project. We are not talking a few simple T1 drones. There are a lot of parts and they are all massive.

Logistically, moving them around from station to station will take some good planning. Capital construction parts are very large and take up a lot of m3. If you are building from a bunch of different stations, getting the minerals in and the finished products out can be tricky.

So basically, good planning and a good crew can tackle some large projects and make the corp ISK as well as line their own pockets. You as the CEO or a director will determine the success or utter failure of a small, medium or large-scale project by planning, material acquisitions, project & personnel management and a lot of patients will make you ISK or cost you some key members of your corp.