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 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:
- Calculate your metrics
- Identify where the most money can be found
- Analyze the components that affect that metric
- Develop a plan to make improvements
- Implement changes
- 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.
Cash is King Webinar
Managing Cash Flow in a Down Economy
Date: Wednesday, August 19th, 12:00pm ET
The average days to collect cash in the AEC industry is between 60 to 120 days. In this web training we will examine the complete project lifecycle to understand how cash flow can be increased when the economy is uncertain. Participants will gain valuable tips to improve cash flow by improving timesheet practices, reducing the billing cycle, and improving client relationships and collection practices.
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