Profitability

    Scope creep – that vicious blood-sucker that steals your project profits. When the scope of the work done exceeds what is promised in your contract, and you don’t get more money, you pay for it. It comes straight from your profit margins and can leave a project at a loss in the end. Just think – you are paying your client for the privilege of working for them! We are all well versed on what causes scope creep – at least we think we are. Your client asks for something outside the scope and we don’t get approval for a change order. There are many reasons for this and here are the most common: Your staff are trying to keep the client happy and the client does not like change orders PMs are afraid to ask client for a change order – conflict stinks! PMs don’t know how to ask for a change order (very common) Our client says we are “nickel and diming” them if we get a change order for every small change (in fact it is always hundreds and thousands … Continued

In 2014 Hillmann Consulting, a then 100-person environmental consulting firm based in Union, NJ, found itself on the cusp of growth. They started seeing what many A&E firms experience when transitioning from a small local firm to a mid-size geographically dispersed firm – fast growth can be challenging! They were frustrated with the lack of uniformity in their business practices. They struggled with proposals, estimating, scope creep, project management, and getting employees to follow processes and use their Deltek system. Like many A&E firms, their culture was built around technical excellence and keeping clients happy – not financial results. This lack of processes, accountability and employee business focus was costing them money! Their projects were leaking profits, and their staff were underperforming. They knew they needed to train their staff on business best practices to see real impact. Geralanne Maglione, Vice President, led a committee to identify available training programs. Geralanne shared “We needed training that taught business management skills to our staff and was specifically designed for our industry. We wanted it to be affordable and convenient with our busy schedules and customizable to … Continued

We waited ten years for business to be booming again, and now that it is, most of our problems have gone away, right?  In reality, we just have different problems, and for some firms, more problems. That is because as we grow and add more people, offices, services, clients and projects, we have so much more complexity to deal with, and potentially more risk. This can lead to a feeling of chaos. Even with a solid infrastructure in place it can feel like it is broken when everyone is moving 100 miles an hour all the time.  Recent industry financial surveys show that the average firm is growing at a 10% increase in revenue per year, however profits are leveling off. This is because salary and benefits costs are increasing faster than fees.       Most firms have revisited their strategic plans in the last year, recognizing that changes in technology and competition are driving a more strategic and streamlined approach to running a profitable A&E firm. Recent assessments we have conducted with executives of small, medium and large A&E firms have identified the following three issues as the primary sources of stress, and … Continued

The majority of A&E firms will concur that 2017 and 2018 have been stellar years for the industry.  Opportunities have been abundant, and economists are telling us that it is likely that the momentum will continue into next year.  With this high volume in the AEC industry, profits are up and we know from industry survey data that the current median profit percentage across all A&E firms in the last year has risen to about 15% depending on your size and geographic and industry markets.  This means that half of all A&E firms have profits below 15% and half are above 15%. In fact, the top 5% of A&E firms in North America are at 30% – we refer to these as the Top Tier firms. Our mission is to help our clients maximize the potential of their teams and achieve this status in their specific niches.      With these higher profits it is easier to attract and hire the most talented team, grow faster through acquisition or organically, and give shareholder and employee owners a much higher level of return.  What is keeping 95% of the firms in the market from achieving this top tier status?  We have researched and assessed over a hundred firms … Continued

“While I have always been concerned for the client, the company, project performance and profits, as an engineer my focus has always been on the technical aspect of the work. This focus on quality and technical excellence will never change. What has changed, however, is my behavior and focus on how the technical discipline and the project management disciplines are inextricably tied. By changing the way I look at and value project management, I am helping my company serve our clients better AND Find Lost Dollars!” – Lisa Wallis-Dutra QK, originally Quad Knopf, has been helping clients build great communities and healthy environments for more than 40 years. Based in California and founded in 1972, QK was built on five distinct areas of expertise that work together to make the built environment possible. Their creative professionals specialize in engineering design and construction management, survey and GIS, urban design and landscape architecture, biology and environmental permitting and planning. Issues affecting low profits and stalled growth In early 2017, the executives at QK realized that their strategic purpose, “one connected team, working in partnership, to make the … Continued