Circle of Excellence: 2019 Best Practices Benchmark Summary

PSMJ designed the Circle of Excellence to highlight successfully managed firms that demonstrate outstanding achievements in all aspects of their businesses. Each year, the Circle of Excellence represents the highest performing participants in PSMJ’s annual A/E Financial Performance Benchmark Survey, based on 13 key metrics.

Rather than focus only on the most profitable firms, or those with the highest growth rate, which could be accomplished without solid business practices, our analysis determines the top 20 percent of firms with the best overall business performance.

Together, the 13 benchmarks encompass critical aspects of business operations including cash flow, overhead control, business development, project performance, staff utilization, and overall profitability. We believe outstanding performance across these areas better indicates a well-run and successfully managed firm.

An analysis of the benchmark results reported by the Circle of Excellence firms indicates superior performance across the board. This is reflected by the following:

1. Higher direct labor multipliers generated from project operations
2. Lower overhead rates
3. Higher utilization of staff members on projects
4. Faster invoice collection times for enhanced cash flow
5. Higher growth rates in both staff size and gross revenues
6. Lower turnover rates
7. Higher profit margins
8. Higher returns on overhead and working capital
9. Higher net revenues earned for each staff member
10. More backlog as a percentage of net revenues

This report allows you to benchmark your firms overall performance against the best in the industry.