Internal/External Sales overall presentation

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Internal / External Sales Overview
Introduction to Staff
Keith Jansen –
Manager of Internal / External Sales
[email protected] (612) 624-5540
Mary Kosowski – Compliance Officer - Internal Sales
[email protected] (612) 624-7892
Jeff Kurland
E-mail address:
– Compliance Officer - External Sales
[email protected] (612) 625-5605
extsales @umn.edu
intsales @umn.edu
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Internal/External Sales
Scope
of Activities
Compliance
Office
•Approve new Internal/External Sales
•Review external sale contracts
•Validate compliance to policy and procedures
•Apply prudent business practices
•Risk assessment
•Analyze tax implications
•Assist with rate development
•Assist with proper cost allocation
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Review Process
• Subject Matter Experts (SMEs)
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Risk Management
Taxation
Office of the General Counsel (OGC)
Sponsored Projects Administration (SPA)
Office of Technology and Commercialization (OTC)
Environmental Health & Safety (EHS)
Institutional Review Board (IRB)
Controller’s Office
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Internal/External Sales
AgendaOffice
Compliance
• Websites
• Classifications
• Approval Form
• Business Proposal Outline
• Rate Development
• Contracts
• Questions & Answers anytime during the presentation
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Classifications
When determining if a transaction should be a Gift,
Sponsored Project or External Sale:
 Review “Fund Bucket Definitions” guide
(*See handout)
If still unsure:
 Send information regarding transaction to the
classification group at:
[email protected]
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Classifications
Approval of an External Sale does not mean that a
follow-on contract will not be a Sponsored project.
Factors that could create a Sponsored project:
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Type of customer (federal or state agency. ect)
Change in activity
Sub-contractor status
Consulting (who has the decision-making power?
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Internal / External Sales
Approval Form
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Combined form for approval of Internal /External Sales
Standardized responses to Yes or No questions
Identify activity risk
More complete list of questions
Interactive response
List of action items
Shorter review process
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Business Proposal Outline
A key part of your application to
conduct internal or external sales
Business Proposal Outline (cont.)
A. General Business Considerations
1. Business Description
a. Describe the department and its activities at the
University.
b. Describe the proposed activity.
c. How does the activity relate to the department and
University mission?
d. Who in the department will be responsible for the
activity?
e. What is the anticipated start date and duration of
the activity?
Business Proposal Outline (cont.)
2. Equipment and supplies to conduct business
a. Office Space
b. Phone/Fax
c. Computer and software
d. Packing boxes, material, and mailing labels
e. UPS systems or other type of postage systems
f. Other items
Business Proposal Outline (cont.)
B. Sales/Marketing Considerations
1. Customers: Consider target customers and
potential volume. List targeted customers in
order of relative cost and ease of reach. With
each increasing level, the cost associated
with selling will generally increase.
Business Proposal Outline (cont.)
Order Fulfillment Considerations
Production Considerations
Pricing/Cost Issues
Budgeting and Forecasting
Proposal cont.
Prepare a financial forecast for the current and
next three fiscal years. Detail estimated
revenue, expenses, and sales volume
Prepare a projection of capital funding needs for
expenditures such as equipment, facilities or
inventory acquisitions
Internal Sales Rate Development
Steps to setting an Internal Sales rate:
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Determine all direct and indirect costs
Determine the breakeven
Determine the measurable unit for goods and services
Determine annual output
Exclude unallowable costs
Determine the activity per-unit rate
Rates should be reviewed and updated each year
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External Sales Rate Development
Steps to setting an External Sales price:
• If you have an ISO, start with Internal Sales rate
– Add unallowable costs for internal sales
• If no ISO activity, determine actual cost of external sales activity
• Add the University’s actual overhead rate (currently 63%)
• Add profit (review profit margins of similar industries to determine a
reasonable profit percentage)
• Determine the market rate using one of the methods in the market driven
pricing model
• Submit rate with initial application form and with contract
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Market Driven Pricing
The following method should be used to price based on market:
• Compare price to a similar good or service from an outside vendor used by
your department or another department at the University
• Call and request a quote from an outside vendor
• If activity is not available outside of the University, determine a similar effort
with similar skill levels and request quote from an outside vendor
• Request information about pricing from the University of Minnesota
Purchasing Department
• Incorporate industry standards into pricing model (i.e.,bls.gov)
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Rate Development – External Sales
Can we make a profit? – Yes! ‘profits’ are used to fund shortfalls,
improvements, training of staff, FTEs, equipment, …..
For-profit vs. Non-profit
“The Minnesota Secretary of State's office reviews and files the
articles of incorporation for nonprofit corporations which are formed
under Minnesota Statutes. It may form for any lawful purpose,
including the conduct of commercial activities. ”
Other examples – University investments in debt & equity instruments
(stocks & bonds), real estate sales, etc.
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Contract Review Process
• Utilize standard U of M agreements whenever possible,
available at OGC website: www.ogc.umn.edu/contracts.html
• If non-standard agreement is used, OGC must review, which will
lengthen the approval time
• OES reviews contracts for:
• Appropriate type of service (matches initial approval)
• Appropriate rate structure
• Related concerns, such as export controls issues, product
liability concerns, currency validation, etc.
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Summary for Internal Sales
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Fill out approval forms with as much detail possible
Send rate development
Use standard rate development template
Send draft to us for review before securing signatures
Call or e-mail us if you have any questions
Use our e-mail address [email protected]
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Summary for External Sales
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Use actual University overhead rate in costing model
Use market driven pricing model to determine actual price
Use standard contract whenever possible
All contracts must be denominated in USD
All contracts are reviewed by External Sales office
Cost must be segregated for internal and external sales
Use our e-mail address [email protected]
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Summary
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Go to website for forms, job aids, policies and training
Use classification e-mail, identification tool
Fill out forms with as much detail as possible
New forms will improve process
Send draft to us for review before securing signatures
Call or e-mail us early in the process
We are here to help you in anyway that we can
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