Profitability

Are You Eligible for Federal Research Tax Credits?

There exists a clear and present disadvantage within the 4 walls of your business. Your competitors are aware of the Research Tax Credit and earning an additional $50,000, on average, in tax credits that are available if you know how to get them. This is one of the few tax perks of being in the design industry.  The Federal Government has established this tax credit for architecture and engineering firms – yet most firms don’t know it exists and don’t even attempt to apply for it. Even if you have looked into the federal research tax credit in the past, some major changes were implemented to the tax laws.  Many more small businesses can receive tax credits that were not previously able to. It’s time to reconsider what working smarter and not harder actually means in this day of competition. The tax credit has been around for a long time but was never made permanent or beneficial to small and medium sized A&E firms. In January of 1981, we saw the fully winding down of the cold war and the new Reagan administration looked for … Continued

Holding Project Managers Accountable for Profitability

While most A&E firms expect their project managers (PMs) to deliver profitable projects, many have not put the appropriate measures in place to ensure that it happens. Accountability at the PM level is often vague and unstructured, which can lead to several different consequences – but not the ones we want! Part of this issue has to do with the many responsibilities given to PMs, and a lack of true visibility into what they are really doing every day. This leads to PMs being given many tasks and little guidance as to how to be successful. The other big challenge is measuring results. The majority of firms that we work with are not tracking individual performance, or worse, failing to implement consequences even if it is being measured. This has the unwanted effect of grouping good and poor performers together, and the less desired result of passive aggressive behavior on both the PM’s part and the firm’s leadership. Common Practices that Undermine Profitability Goals The following are practices that I often see in many A&E firms that undermine their ability to achieve profitability goals. If … Continued

10 Ways to Make More Money in 2016

It is hard to believe 2016 is here. I always get excited about the beginning of a new year – I look at it as an opportunity to start over, correct the mistakes of the past and achieve some of the goals that eluded me in the previous year. For most of our clients, 2015 was a good year for business. We saw a growing number of projects, expanding revenues and larger backlogs than we have seen in a long time. But with growth there are also challenges – a war for talent, increasing competition and with it, a resulting increase in salaries. More than ever we need to be innovative, efficient and run our businesses smarter than our competitors. We face many unknowns for the future including declining energy prices, fall elections and continued technology advances. Every year I attend 8 to 10 industry conferences in order to take the pulse of the industry, as well as understand the challenges that our clients face. Based on this last year and various expert’s predictions for 2016, Here are my top 10 recommendations for how your … Continued

6 Keys to Building a Profitable Culture

Increased competition in the Architecture and Engineering (A&E) industry is driving down fees and making it feel like a buyer’s market. This is putting a squeeze on A&E firm profits, and forcing many firms to re-evaluate their strategy including how they go to market, what services they offer and how they can run more efficiently. I am seeing an evident trend for firms to look at their business management practices, and how they can increase project profit margins, with a strong emphasis on project management success. The old ways of doing business are being challenged, and along with it, the long established practices stemming from the firm’s entrenched culture. So what does it mean to build a profitable culture? I have developed the following definition which can require a radical shift in thinking and behavior, and could be a game changer for those organizations willing to take a critical look at all of the long-held beliefs and practices that work against the firm maximizing its profitability. While the business school definition of corporate culture is “Patterns of accepted behavior, and the beliefs and values that … Continued

Making a Difference – One Client at a Time

We all work hard every day and hope that what we are doing is adding value to our clients. We usually don’t get much feedback about whether our work is making an impact, although occasionally something happens that puts a smile on your face and makes it all worth it. That happened to me today. Out of the blue, I received the this picture in my email. It was from my client Geralanne Maglione at Hillmann Consulting in Union, New Jersey. She knew I would love it. For the last year I have been working with the employees at Hillmann to transform their culture into one where everyone is focused on profitability. After reading my book, Find the Lost Dollars™, a couple years ago, Chris Hillmann, CEO, signed up 10 of their key staff for our Find the Lost Dollars Pilot Program to test out our new online training platform. This training is focused on teaching employees business skills and creating a profitable culture in which project managers and other key employees are looking for many ways they can help increase company profits by 1% or … Continued

Leveraging the 80/20 Rule in Your Business

I recently had the privilege of spending two days strategizing with Google Adwords and 80/20 guru Perry Marshall near his home in Oak Park, IL. I was part of a 4-man intensive designed to focus Perry’s expertise in sales and marketing on how to take my business to the next level. Perry started his career as an engineer, but quickly learned that he had more value to add to business owners by helping them focus on the few things that will deliver the biggest results. Perry is an amazing coach and mentor, and I am working hard now to implement the “jewels” of knowledge I extracted from my time in the “hot seat.” I found Perry a couple years ago when I read his book 80/20 Sales and Marketing: The Definitive Guide to Working Less and Making More. This book gave me a completely different paradigm about understanding how to target buyers that are most interested in the products and services that we are selling. Whether you are selling auto parts, NFL game tickets or professional services, there are many people that will spend a few … Continued

{Guest Post} The Power of 1%

  We have all heard the phrase, “work smarter, not harder” and yet I would venture to guess that few of us really understand how to do just that.  There is however, a very simple concept that demonstrates the critically important issue of how to constantly improve efficiency and effectiveness. June Jewell, a professional colleague of mine, has written an excellent book, ‘Find the Lost Dollars’ that encourages firm leaders to enhance the best practices of their firm and with it, the profitability of their projects and businesses.  The book is filled with excellent, easy to understand recommendations for improving the way we go about the daily tasks involved in running an organization, regardless of its size.  And, as good as all these recommendations are, for me, it’s the clarity of each chapter that provides insight to working smarter. Not to oversimplify the effort and time it takes to learn how to discipline oneself, about anything, June has nonetheless brilliantly introduced logical, easy to comprehend method and means for enhancing a firm’s revenue, which might otherwise be overlooked or lost due to the lack of … Continued

How Accountable Learning Can Improve Financial Results

    In looking where to invest limited dollars these days, it is critical that every penny spent provides a return on investment (ROI) above what other investments could deliver. Every dollar spent on one part of the business takes away investment in another. Each employee hired must contribute to the bottom line of the business, and measuring how they contribute can be a difficult yet critical aspect of successful business management. Improvement in employee skills can provide a significant improvement in profitability if combined with a program of business management improvement and learning methodology that ensures that the employee is employing their new skills on the job. Profitability by Project Manager can be measured – yet many firms don’t track individual performance, or teach project managers the skills necessary to deliver profitable jobs. Where money gets lost is often elusive – it is often in many small places every day. From poor estimates, to scope creep – not recovering contract extras – to poor control over subcontractors– money gets lost in many phases of the project lifecycle. What is missing in many cases is … Continued

New Industry Conference Launched – Aimed at Increasing Profits in Architecture & Engineering Firms

  Industry leader AEC Business Solutions, LLC is launching a new conference aimed at helping Architecture and Engineering firm leaders to improve business management practices with the primary goal of increasing profits.   The inaugural AEC Profitability Summit will take place September 24-25, 2015 in Tyson’s Corner, VA. For the first time ever, the entire conference will focus entirely on profitability in A&E firms and utilize proprietary templates and other tools to guide attendees towards development of a 12-month plan to improve their firms. A distinctive line-up of industry experts will offer fresh content and specific hands-on solutions to put participants on the road to increasing profits. “We expect this Summit to be the beginning of a one-year journey for each participant, that will allow them to learn and implement several key initiatives,” states June R. Jewell, CPA, President and best-selling author. “Our Summit is an excellent opportunity for forward thinking leaders interested in taking their firms to the next level by transforming employee behavior.” Planned sessions include: “Leveraging Your Strategic Plan for Improved Firm Performance” where Ray Kogan, AIA, and President of Kogan & Company, along … Continued

3 Steps to Increase Your Fees Now

In a recent survey of our clients across the U.S., one of the most pressing concerns noted was how to raise fees. While the economy is improving, faster in some sectors and geographies than in others, fees for Architecture and Engineering firms are not increasing across the board. During the recession from 2007 to 2010, most firms saw their average project revenues and multipliers decrease, along with corresponding hourly rates. Most of this was caused by competition, a reduction in available projects, and a glut of available experienced talent. Now we face a period of increasing volume of work, a potential shortage of human resources in some areas with resulting growing salaries, yet fees have not increased at the same pace. The average firm fears “not winning” and so they sabotage their own success by reducing fees in order to win work. So how do you get out of this vicious cycle? Here are 3 steps that I have practiced myself and witnessed personally among several successful architecture and engineering firms over the last several years that can allow you to transform your firm into a … Continued

Your Profitable Journey – Kickoff a Transformation in Your A&E Firm

  As I speak to our Architecture and Engineering clients around the country, the common goal is always how to maximize profits. The daily demands of running an architecture or engineering firm can be overwhelming. And the day to day demands of growing while still maintaining “squeezed” profit margins is becoming harder to accomplish. This is where the AEC Profitability Summit can give you specific tools to implement significant change over the next 12 months to increase your bottom line. Join us on a journey to find an extra 1% to 3% profits in your business. How many times have you spent valuable time and money attending a conference or seminar and come away thinking, “Hmm, some interesting info, but now what do I do with it?” All the business and financial management theory is great, but once you get back to your “day job” it is difficult to implement significant change without a plan. It has happened to me and my clients more times than I’d like to admit. When our team at AEC Business Solutions first started talking about putting together the upcoming … Continued

Too Busy to Work ON Your Business?

Too Busy to Work ON Your Business? 3 Steps to Ensure Important Change is Happening   Many of you have probably read or heard of Michael Gerber’s best-seller The E-Myth which introduced the concept of working ON your business not in your business. This how-to guide for entrepreneurs popularized the recommendation that successful business owners need to focus on running and improving their business operations rather than doing the work themselves. This is a common problem in the A&E industry where most business owners are technicians and often love doing the work themselves more than managing their business. As I work with A&E firms to help them improve profitability, the number one challenge with firms achieving their goals is that they are not getting the important but non-urgent initiatives completed. These are the types of internal projects such as business process re-engineering, improving the use of systems, establishing new performance management / accountability processes, developing better project management practices and skillsets, and focusing on higher quality client engagement. While these initiatives have been deemed critical by the leadership and maybe even mandated by a board of directors, the execution of these projects often fail because the … Continued

Guest Post: Find the Lost Dollars™ Book Review

Today’s post is by our guest author Scott D. Butcher, FSMPS, CPSM. Scott is Vice President of JDB Engineering, Inc. and President-elect of the SMPS Foundation. He has more than two decades of A/E/C marketing experience and is a Fellow of the Society for Marketing Professional Services.   BOOK REVIEW OF FIND THE LOST DOLLARS: 6 STEPS TO INCREASE PROFITS IN ARCHITECTURE, ENGINEERING, AND ENVIRONMENTAL FIRMS   It’s not often that you read a book and think, “Where has this book been?” Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering, and Environmental Firms by June R. Jewell, CPA, is one of those books. If your firm happens to be rolling in profit and doing everything exceptionally well, there’s really no reason for you to read this book. But for the rest of us—that is, almost of all of us—this book will serve as a critical desk reference for years to come. In the A/E/C industry, we have this modus operandi whereby we reward exceptional technical people with positions in management. Unfortunately, they rarely have any training, much less formal education, in business management. And while project management is often … Continued

8 Ways to Make More Money in 2015

I can’t believe it is already 2015. The beginning of a new year is a great opportunity to gain a different perspective and a more effective business management strategy. While we are all in business to make money, it is amazing that we persist with business practices that do not optimize our employee productivity, project profits, or marketing success. Change is hard for every firm. We all suffer with the same issues – fear of and resistance to change, limited time and resources, a fast changing economic and technology environment, and limited expertise in financial and business management. With our economy improving and firms growing again, there are more challenges in trying to ensure that our growth is profitable. Some firms are better run and more profitable than others. I believe even the most successful firms can run better. In my book, “Find the Lost Dollars,” I show the financial impact of just a 1% increase in your win rate, utilization and project profit margin. Do you know what your 1% is? This is the perfect time to put a plan in place to make … Continued

Spring Cleaning for Your Business

Doesn’t it feel good to throw things away? I don’t know about you, but I hate clutter. It makes me feel stressed and disorganized. Every year I resolve to clean out my office, my garage, and all the drawers and closets in the house that get cluttered over the long winter. It feels so great to actually throw things in the trash that you once found valuable. So this year I am promoting a concept called Spring Cleaning for your business. This is where you look under the cover, peek around the corners, and discover the old habits, practices, and business management methods and tools that are no longer working for you. I will not fool you – this is a lot of work! It takes both time and an open mind to dig into what is not working in your business, and figure out how to fix it. And it often takes courage to throw away those processes and systems that you used to depend on. But the payoff can be significant! In my new book, Find the Lost Dollars, I demonstrate the significant … Continued

The 5 Top Risks to Project Profitability

These days projects are hard to get and project profit margins are declining. With more competition nationally and from overseas firms, it is critical to manage projects with precision, and utilizing best practices for financial management. With some focus on those areas of your business where your firm is weak, and improving the systems and processes around these areas, you can start to increase your profit margins, and reduce losses from waste and inefficiency. In working with hundreds of A&E firms over the last 24 years, I have identified five areas that can cause projects to not perform as they should. As I discussed in my book, Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering, and Environmental Firms, the job of a project manager (PM) is tough. They are given many responsibilities that they have never been trained for and are often relied upon to carry the success of the firm on their backs. By looking at the underlying problems that plague many firms, and improving the operational bottlenecks that slow work down, and cause budget overruns, you can gain a … Continued

Five Steps to Increase Profit Margins on Professional Services Projects

With competition tougher and margins smaller for professional services firms, we need to have every advantage to ensure our projects are profitable. Many things erode the margins on our projects including bad estimates, scope creep, poor resource management and issues with clients. By putting a few processes in place to eliminate the areas that give project managers and their teams the most frustration, we can control project costs more effectively, and start to realize greater financial success on our projects. Five Steps to Increase Profit Margins In working with hundreds of professional services firms over the last 23 years, I have found that firms that follow these five practices have seen the most success in their project management results: Create a solid process for developing project estimates Good estimates are the critical first step in assuring that your projects will be successful and make money. However, many firms do not have a standardized process for creating project estimates. If you are using excel for your estimates, there is a good chance that your managers are using old rates, inconsistent language, and poor assumptions in their forecasts. … Continued

Profitability Expert June R. Jewell Raises Awareness of How Corporate Culture Is Stealing Profits from Business Firms

For Immediate Release Profitability Expert June R. Jewell, CPA, Raises Awareness of How Corporate Culture Is Stealing Profits from Business Firms Vienna, Virginia– April 26, 2013 A company’s corporate culture could be its own worst enemy, according to profitability expert June R. Jewell, CPA. The core values and beliefs of your workforce can adversely affect your bottom line. The key is being aware of costly culture traps that are holding your business back. If management is not aware of cultural beliefs of employees, they can turn a blind eye to contracts, budgets, and other project management best practices that affect profitability. “The culture of your firm directly impacts your profitability. How you look at money, deal with your financial management, and manage your staff directly translates into policies, processes and behaviors that cause projects to go over budget. Without a healthy focus on profit, an owner may find it difficult to grow the business.” June R. Jewell, CPA, Author In her new book, Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering, and Environmental Firms, June exposes the ten cultural traps that are … Continued

Using Four Metrics to Analyze Performance of a Professional Services Firm

Sometimes the day to day demands of running a professional services business can be overwhelming, especially for creative and technical entrepreneurs and project managers that do not have a financial background. Trying to stay on top of administrative responsibilities, hiring and managing staff, and keeping clients happy can make it difficult to really understand how the firm is performing. Many leaders also struggle to understand and analyze reports and financial statements, and determine where to focus their attention to ensure success. While there are many important metrics and reports that you can look at each month to gauge your company’s health and profitability, you can get a pretty good understanding of the performance of the business by looking at just four metrics – the Win Rate, Utilization Rate, Project Profit Margin, and the Average Collection Period (or Days Sales Outstanding). By looking at just these four key performance indicators, you can simplify the process of analyzing how projects are being executed and managed, and help your project managers and leaders focus their attention where it will get the most benefit Win Rate The Win Rate … Continued