There are some things AEC professionals must learn about business in order to be successful.
We have all heard the expression, “Ignorance is bliss.” There may be something to that – one cannot worry about things they don’t know about. But that ignorance doesn’t mean those threats aren’t really there. So the best thing then would be to be educated.
This need for education is particularly critical for the business side of an AEC firm. Architects, engineers, planners, and other design professionals typically get very little preparation for the business roles they are likely to fill at some point in their careers.
Here are some of the things I think AEC professionals must learn in order to be successful:
- Firm management. This is a broad topic but one many AEC professionals really struggle with. Firm management is all-encompassing. How to have a successful firm is not the same thing as a successful project, nor is it necessarily how to be successful yourself. When you put your firm management hat on, you are all about the “big picture” and balancing many different aspects of the business at once to keep the entire thing healthy and growing. There is very little training offered that I am aware of focusing on overall firm management.
- People management. It’s as much of an art as it is a science, but how good you are at it will have a huge impact on your success. There are so many aspects of people management to learn about that I can’t list them all here. But it’s safe to say that it’s important!
- Communication skills. How to speak in front of a crowd, how to speak to individuals inside and outside of the business, and how to write may be some of the most critical skills design professionals need to have to be successful. And these are all skills that can be taught.
- Project management. Developing a scope (or alternative scopes) of services, fee estimating, assembling a team of insiders and outsiders, managing a budget and schedule – and more – are all critical elements of project management that design professionals have to know.
- Financial management. Understanding balance sheets and income statements, firm budgeting, financial ratios, capitalization, cash basis versus accrual basis accounting, taxes, cash flow, billing and collection, borrowing money from banks – these things and more are so important to know and understand, yet most AEC professionals have had zero training in these subjects.
- Building value in the business. I always like to say the difference in a small business and an entrepreneurial venture is the latter has value that can be extracted at exit. Understanding what builds value in the business and what doesn’t is super-important for AEC business owners to understand, especially considering the traditional advice they have probably gotten from their outside accountants that the firm is only worth what they can extract from it every year.
- Ownership transition. Knowing what the options are and the pros and cons of each is essential for any owner of an AEC business who wants to see their business survive beyond their involvement with it.
- Marketing, selling, and public relations. These are some of the most important subjects to learn for AEC firm owners who are interested in building resilient companies that do well during good times and bad times. And again, knowledge about these things is severely lacking in the majority of design professionals. They need training and education – badly!
- Recruiting. Being able to build a real team of people with the skills they need to meet client demands is an essential skill for those in the AEC business. Recruiting is all about selling the opportunity, not keeping bad people out. Yet most people in any industry have had no training in it whatsoever.
- Leadership. Leadership is a combination of all kinds of different skills. Some people think it cannot be taught. I disagree with that thinking and instead believe that many more people working in the AEC business have potential to be leaders than they realize.
Whew – I could probably make this list twice as long if I kept going, but I am out of space. Suffice it to say, there’s a lot of potential for AEC professionals who learn about these subjects!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.