Fact 1: Niche Services Command Higher Fees. It comes down to the basics of supply and demand. If you have a specific AEC service, expertise, or capability that cannot be easily found in the open market, you have leverage to charge a higher fee. Take it one step further and develop branded intellectual property that cannot be replicated (without compensation) and you are on your way to a truly scalable business model.
Fact 2: Ideas Without Action Demotivate Everyone. If your AEC firm has a strategic plan or is getting ready to develop one, the most critical thing you can do is to ensure that every strategy has specific implementation tactics with specific accountability and deadlines. Too many plans have great big picture ideas, but no “teeth” to ensure the work actually gets done to bring those ideas to life. As a result, this gets everyone deflated about the plan. Regular check-ins on implementation deadlines are key to ensure sustained action.
Fact 3: Not All Turnover is Bad. It certainly hurts when you lose a top performer through voluntary turnover. But, in some cases, that departure comes because you haven’t been proactively releasing your bottom performers. There is such a thing as a turnover rate that is too low. The reality is that your weakest performers are often the least likely to leave. Getting these individuals off the payroll is an opportunity to preserve and cultivate your firm’s culture.
Fact 4: Reducing WIP Improves Cash Flow. To improve cash flow, we talk a lot about getting paid faster and reducing the time from invoice to cash. But, reducing Work in Progress (WIP) is equally critical. This is the time from when the work is completed to when the invoice goes out to the client. For starters, you need to start measuring this timeframe. According to PSMJ research, the median firm has 19 days of gross revenue tied up in WIP. That is well over two weeks from when the work is done until the invoice goes out. One way to get cash in faster is to charge an up-front mobilization fee,
Fact 5: Those Who Bring in the Most Work Hold the Most Power. Forget what your AEC firm's ownership structure looks like or what your job titles say. The ones who are bringing in the most work are the ones who really hold the most power within the firm. They are the ones who will have the most significant impact with an unexpected departure. So, what should you do? For starters, get them involved with teaching others how to excel at business development. They are the ones who know it best.