Entrepreneurial small firms

Mar 03, 2024

Some of the ways entrepreneurial small firm owners create value and differentiate themselves.

Just because someone (or someones) are in business and have their own small AEC firm doesn’t make them “entrepreneurs.” They could simply be “small business owners.”

There’s nothing wrong with being a small business owner. There are tens of thousands of them in our industry. As a small business owner, you have some freedom and some tax benefits, you can pick your clients and projects, and you don’t have to waste your time sitting in pointless meetings or put up with any other corporate bureaucracy that would be typical in a larger company.

But is that all there is to it? Are your only choices either to have a small firm that does small projects and (hopefully) makes you a decent living, or to work for someone else in a larger organization? I don’t think so. You could be a small firm with big plans – big plans to create an innovative, growing business that builds value you can extract when you decide it’s time to get out.

Although I have said it in these pages before, it’s worth saying again: It’s that “value building” that differentiates an entrepreneurial small AEC firm versus a typical small AEC firm. “Value building” is more than a clichéd buzzterm. It means you can extract the value of your ownership stake in your company when you decide it’s time to move on to do something else. It’s real. It’s tangible. And most importantly, it is all about the choices you, as the owner or owners, make.

So let’s take a quick look at some of the ways entrepreneurial small firm owners do things that lead to value creation and differentiate them from the mass of other small firms:

  1. Entrepreneurial small firm owners always try to do what is best long-term. They know every decision they make affects their long-term future and that the sooner they start doing what is best for the long-term, the better off they will be. This isn’t always easy, but it is necessary!
  2. Entrepreneurial small firm owners plan. They believe in business planning. It’s not just an academic exercise, but rather a way of life for them. They set a plan. They have goals. They have a list of things to do that will make their firm better – not just do projects. They share their plan with everyone in the business.
  3. Entrepreneurial small firm owners are committed to growth. They know it’s either grow or decline. Growth gets everyone excited. Growth keeps them motivated. Value is related to growth rate. Value is a good thing!
  4. Entrepreneurial small firm owners plan for how they will finance that growth. They have the right legal form of organization that supports their long-term goals. They retain earnings in their business. They develop banking relationships. They secure the most credit they can get before they need it. They sell ownership to their best people so they can generate capital internally.
  5. Entrepreneurial small firm owners put their business first above their personal wants and needs. They take out less money from their business than small business owners because they know the business is what feeds them. They don’t want to kill the goose that lays the golden egg. And they put in the hours required to get ahead.
  6. Entrepreneurial small firm owners do what it takes to create a brand. That means they consistently invest in marketing. They have a great website. They use PR. They put a lot of content out there on social media. They have swag like shirts and cups and other stuff. They drive branded vehicles. They have good project signage. They exhibit at conferences and trade shows. Marketing is not viewed as overhead but rather as an investment.
  7. Entrepreneurial small firm owners are not afraid to specialize. They know that specializing is how they can break free of their local market dependence. They also know that when a client has to make a choice of what firm to use they want to be head and shoulders above anyone else because of that specialized experience. And they know that specialization leads to higher fees and billing rates.
  8. Entrepreneurial small firm owners develop their people. They aren’t micromanagers. They understand that the strength of their business lies in their people. They don’t want their businesses to just revolve around them and depend solely on them. That means they understand that the best people need to be paid well and that they cannot be selfish in terms of sharing rewards.
  9. Entrepreneurial small firm owners share their financial performance info. They know how important providing and talking about this information is to educating their people on business, and that business knowledge is a common weakness of people in our industry.

I could easily expand on each of the differences between small business owners and entrepreneurial small business owners. It’s one of the reasons Zweig Group is doing our first-ever AEC Small Business & Entrepreneurship Forum in Atlanta on May 21. Come join us, learn, and be inspired! 

Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

AEC Small Business & Entrepreneurship Forum This new event gathers leaders of small AEC firms to discuss the unique issues of managing and growing a small business today. The one-day event includes keynotes, panel discussions, roundtables, and breakout sessions, all focused on the emerging trends and needs of small businesses. Join us May 21 in Atlanta, Georgia. Click here to learn more!

About Zweig Group

Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.