None of these questions may seem profound, but they all merit asking and honestly answering.
As this year wraps up (where did the time go?), and we are seeing some signs of an economic slowdown, now is a good time for AEC firm owners to be sure they are heading into the new year in a strong position.
These are some questions I would be asking and things I would be doing:
- Business plan for the new year. Is it done? Does it clearly spell out your mission (purpose) and vision (what you are trying to become by some point in time)? Do people actually know what that is? Are your basic strategies (philosophies) about how you will do everything you do defined? Do they differentiate you from all the other firms you compete with? Do you have clear, measurable goals for the 12 months ahead, and do you have a list of action items clearly spelled out? And does everyone in the business have a copy of the plan and understand what it is?
- Working capital. Have you done everything you can to clear out all unbilled work in progress? How about collection of accounts receivable? You aren’t blindly carrying old AR into the new year that should be written off, are you? How about your lines of credit? Have you gone to your bank to get those increased as much as they will allow? There is nothing that says you have to use any of this credit but you may need it at some point, and now is when you should be arranging for it – before it’s needed.
- Unnecessary time wasters. Have you really looked at all of your processes and procedures – things such as timesheet reviews, time off requests, purchasing, travel approvals, and other things – to see if they are necessary? What can be streamlined? How about meetings? Can any of them be eliminated or shortened? Or can anyone be taken off the meeting list so they can go back to doing something more productive? Meetings waste a lot of time in AEC firms.
- Staffing. Are you ignoring performance and morale problems caused by certain people and carrying those into the new year? If so, why? Have you thought about how you can ramp up the supply line of qualified people who want to work for your firm? What are you doing to make your company a better place to work for the kinds of highly motivated and skilled people you need? Have you got the right people in the roles they are best suited for? If not, why not? Now is the time to fix these problems.
- Marketing. Have you gotten everyone using your client and potential client database? What are you doing to add to that database? What new approaches will you be using this year to market your company and its services? Have you reviewed the list of project possibilities and deleted everything that is dead? What can you do to accelerate the closing of the real opportunities you do have? Are your ramping up your PR efforts? How large is your press list and how often are you using it? What training do your people need to be better sellers and how will you be providing that to them?
- Operations. Have you raised your billing rates and informed all of your clients of doing so? Are your fee estimating and contracting procedures and processes working to get profitable projects? If not, what will you change? What can you do to be more profitable? How is the quality of the work you are putting out? If you aren’t happy with it, what will you change to ensure that you are getting better?
Questions, questions, and more questions. None of these may seem profound, but they all merit asking and honestly answering. Who knows if things are going to be better or worse in 2023? I don’t. I’m still not convinced that our industry is going to be seriously impacted by rising interest rates, but who wants to take that chance? There are clouds on the horizon. Let’s get out our raincoats and galoshes, and be ready for whatever lies ahead, NOW – before the storm hits!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.