unnamedToday’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

Cover for Book Review of Find the Lost Dollars

 

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 a natural stepping stone, few PMs even have the necessary training to be effective in their jobs.

Where A/E/C college curricula have failed, and company professional development programs have floundered, Jewell’s book steps in to fill a major void in the black hole.

The “six steps” promised in the book’s title are fairly straightforward:

  1. Calculate your metrics
  2. Identify where the most money can be found
  3. Analyze the components that affect that metric
  4. Develop a plan to make improvements
  5. Implement changes
  6. Measure and track your results

The balance of the book provides a plethora of thought-provoking insights and examples.  Right out of the gate, Jewell outlines ten culture traps that impact a firm’s productivity, attacking sacred cows by challenging that quality isn’t everything and that we shouldn’t always seek to keep our clients happy at all costs.  Her ten traps serve as a manifesto for what’s wrong with the management beliefs common throughout our industry.

Next, her perceptions hit home as she addresses the typical areas where profits disappear within A/E/C firms. This chapter is very powerful, as she not only outlines nine profit vacuums, but demonstrates with clear examples where the money is disappearing and how it can be found again. The author uses a simple example of a design firm with $10 million in annual revenues, and how it could gain significant profits with minor tweaks. A 1% increase in proposal hit rate uncovers an additional $370,000. A 1% improvement in estimating finds an additional $33,300.  Combating scope creep by billing an additional 1% for services provided generates another $100,000 of revenue.

Subsequent chapters address strategic planning, marketing and business development, go/no-go decisions, and operations, where Jewell goes into depth about time sheet policies, essential skills for technical staff moving into project management positions, and understanding true project costs as well as contract types. In many ways the operations chapter is a primer for understanding the business side of project management.

Find the Lost Dollars™ also includes a comprehensive chapter about financial and cash management, as well as advice about customer relationships and information technology. I was extremely impressed with the content, insight, and recommendations in this book. Jewell has written a thorough book that addresses the business side of the A/E/C industry. Find the Lost Dollars will be shared liberally around my office— and probably most offices where someone on staff discovers this exceptional book.

 

Taken from February 2015 Issue of PSMJ Vol. 42/Issue 2. Used and reprinted by permission.

 

More From the Find the Lost Dollars Blog...

10 Challenges to Bringing Employees Back to the Office

10 Challenges to Bringing Employees Back to the Office

In my Monday afternoon AEC Crisis Roundtable, I hear similar stories of confusion, anxiety and dismay. The Covid-19 pandemic has created many challenges, among the most complex being how to bring employees back into the office. One leader, Rich, summarized the problem...

How to Prepare for the Next Recession

How to Prepare for the Next Recession

I don’t know if there will be a recession in 2021. No one does. What I do know is that I have been through at least five difficult economic downturns since starting my business in 1990. And what I witnessed is that some firms were prepared and some were not. Some went...

6 Signs You Don’t Have “Great” Client Relationships

6 Signs You Don’t Have “Great” Client Relationships

Every leader believes they have great client relationships. And many are counting on their long-term deep relationships with clients to help make it through whatever economic conditions are coming. With uncertainty in the future and an unstable environment no one has...