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.
This last weekend I got the bug and started spring cleaning my house. I have only been in it for four years, but it is amazing how much stuff you accumulate that you really don’t need. What I realized is that the more stuff you have, the longer it takes to find things and manage it all. Purging things that are no longer valuable or serving your current lifestyle frees up your time and space in your brain for what is most important.
So why not apply the same idea to 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.
Be prepared – this can be hard work! It takes both time and an open mind to dig into what is slowing down your business and figure out how to clean it up. 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 book, Find the Lost Dollars, I demonstrate the significant cost savings and additional revenue that can be found by taking a detailed look at your business in the following nine key areas:
- Lead and Opportunity Management
- Proposal Processing
- Scope Control and Extra Services
- Project Management
- Resource Utilization
- Billing, Collections and Cash Management
- Technology and Systems
- Client Relationship Management
Lots of clues can be found about what is working and not working as you look at your business differently. Just a one percent increase in three key metrics – Win Rate, Utilization Rate and Project Profit Margin – can be hundreds of thousands or even millions of dollars!
By getting feedback from staff, and understanding how they do their jobs each day, you can uncover some astounding issues that you didn’t know existed. When we implement our Business Management Assessment survey, we often find many instances where employees are wasting time working with systems and processes that require much more effort than they should.
Here are some of the key issues we typically uncover:
Inconsistency in the way your employees behave
Take a good look at how your employees operate on a daily basis. Are they following business processes that are documented or doing things their own way? Inconsistency can lead to breakdowns in quality, safety, client service and project financial results. Bad habits may have been allowed to form over time and can be costing you money.
Employees often use Excel when they don’t understand how to get the information they are looking for from your systems. Using Excel often wastes employees’ time, can be inaccurate and may not tie back to conventional systems.
Duplicate Data Entry
If you have several non-integrated systems, your employees may be entering the same or similar data in more than one place. This can be frustrating and also wastes their valuable time.
Failure to use the features and capabilities of your systems
Most firms use less than 20% of their automated financial management systems. You may find many ways to improve your processes using automation.
Failure to have documented processes
If your employees don’t know what to do, they will do whatever is easiest. This is what leads to inconsistency and reliance on spreadsheets. Both your company value and bottom line can be markedly increased by documenting your processes, training employees to follow them, and enforcing company policies.
Employees are not trained
When employees are trained to do their jobs effectively they are more efficient and happy. This is especially true for project managers (PMs) who are touching almost every aspect of your business. By teaching your employees how the firm makes a living, and efficient ways to manage their time and daily work, you will be actually lessening their burden in performing their jobs.
Projects are losing money
Ultimately the reason we are in business is to make a profit. If your projects are losing money, it can be due to many factors including bad estimating and planning, failure to utilize resources effectively, going after the wrong projects to begin with, and ineffective project management.
All of these issues noted above can be corrected. You just have to be willing to do a little spring cleaning and see what junk you should get rid of, and what gems you can find in the attic.
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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