It’s always interesting to me when I encounter people who don’t think you can get rich (that’s right, I said “rich”) in this business. But before we get started, please let me clarify. “Rich” to me means a net worth of at least $3 to $5 million (or more) and annual income over $300K.Sure, there’s little doubt that most architects, engineers, and scientists will not get rich. They’ll do O.K., they’ll at worst live middle class existences, and they will most likely get a lot of satisfaction from their work. Plus, they can feel good about what they are and how they spend their day.But why not do all that and still bring home a strong paycheck and provide for your retirement at the same time? Because you don’t know how, or because you don’t think it’s possible, or because you don’t think it’s worthwhile. It has to be one (or some combination) of these three. If you don’t know how, let me tell you. Commit to growing your business. Spend more money on marketing than your competitors, but do it in ways other than having high-priced staff make sales calls. Specialize in a market sector or sectors instead of being a generalist, so you can get better margins and have a higher hit rate. Do things that allow you the biggest spread between what they cost you and what you can charge. Build value in the firm by investing in computerized databases, recruiting, your staff, and marketing. Share financial performance data with everyone. Pay out a percentage of profits to all employees on a quarterly basis. Pay out stockholder bonuses or distributions monthly. Post utilization rates, by individual, and don’t tolerate unbillable line staff. Post PM performance data, including effective multiplier, budget to actual variance, and WIP write-offs, by individual PM. Every time someone (or someones) make a sale, send out an e-mail. Track backlog and take action if it starts to slip. Mark up reimbursables and subconsultants. Do more work on a fixed fee basis. Spend more management time on things that make you money versus those that lose. Control expenses for unbillable travel and training. Don’t waste money on anything that doesn’t make you money. If you don’t think it’s possible, let me educate you.I know of firms in this business that make $15 million in profit on $50 million in revenues. I know people in this business that make more than $1 million a year. I know people in this business that have 6-bedroom homes in Aspen. I know people in this business whose art collections are worth more than everything I own. I know of firms that make more than 30% profit each year, every year. There are plenty of people who do very well in this business. One important difference between them and everyone else is that they believe it’s possible. Without that, they would never have succeeded to the degree that they have. As they say, “it’s all up there (in your head).”If you don’t think it’s worthwhile, consider the fact that you choose what you will do to make the money as well as what you do with what you make. You don’t need to do anything illegal or unethical to be a financial success. You don’t need to work 80 hours a week if you can start to trust people. You don’t need to do things you don’t want to do or aren’t good at if you will spend the money to grow your business so you can then afford to hire some more folks who will do these things. And as far as what you do with your money, you may be perfectly comfortable living a modest lifestyle— heck, it works for Warren Buffet, and he’s a zillionaire. That’s O.K. But you could give it to your kids. Or a favorite charity. Or pay your people better. Or hire and train welfare mothers who want to get off of “the system.” Or start a scholarship in your name at your alma mater. Or buy your aging parents a new car. Or whatever else you want to do that isn’t selfish and helps people. You make the choices. So while you’re creating your art (in the form of buildings) as an architect, solving unbelievably complex traffic problems as a transportation engineer, planning a new city park as a landscape architect, reclaiming a polluted site as an environmental consultant, or building a business as a businessperson— all worthy endeavors— why not choose to be a financial success, too? You know how to do it, you can do it, and it will be good if you do it!Originally published 6/08/1998
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.
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