Three things owners do that hurt their businesses

Apr 26, 2016

Screen Shot 2016-04-26 at 1.32.58 PMA lot of A/E/P firms complain, but in fact, they’re not really trying to grow. As an executive in residence teaching entrepreneurship in the Sam M. Walton College of Business at the University of Arkansas‎, I get to learn a lot about entrepreneurial small business ventures in the state and region as a whole. And as a management consultant to the AEC industry working in this same field for more than 36 years, as well as founder of a company that will do more than 25 research studies on the A/E industry this year – I get to learn a lot about A/E/P firms. People often ask me where business owners go wrong in the A/E world (and elsewhere). I can tell you it is in three things:
  • First problem. The owners take too much money out of the business and don't reinvest enough back into it. Whether salaries are too high, bonuses are too large, too many relatives are on the payroll, or any number of other things, the result is the same – the company does not have the capital it needs to grow. Therefore, it gets stuck. Meanwhile, demands for cash from profits are high. Owners have lifestyles that were perhaps established while working in other jobs and they are not psychologically equipped to make the sacrifices necessary to really get the business to a position of strength where it is better able to survive any blows that may have occurred.
  • Second problem. The owners don't do any marketing. There are many reasons for this. They don't believe it really works, don't have time, and don't value anything but architecture or engineering. They think the marketing budget should be tied to revenue, and that it should decline if revenue declines. No matter what is, there's no real marketing expenditures or activities. Sure, they'll call their friend in a client organization if they think it will help win a job, but that's not the kind of marketing I'm talking about. I'm talking about branding and positioning, doing unique research and publishing it, using direct mail, email, PR and social media, creating original communications and sharing them with a very targeted audience. Most companies do none of this!‎ Then they sit around and talk about how "word of mouth" is their most effective marketing. No one can give you word of mouth if they don't try you in the first place!
  • The third problem. The owners take their people for granted. If you don't believe me, pick up an A/E firm's business plan and read it. Just look at how many references there are – substantive ones – about how they'll make their firm a great place to work. Unique organizational structure? Structured training program? Open book management? Special rewards programs tying pay to overall company profits? Rotating board seat for a member of the rank and file? So much of this just ISN'T there. The implicit assumption is they just pay the least they have to so everyone doesn't just quit and that should be sufficient to keep everyone motivated, engaged, and thrilled about providing outstanding client service. Guess what – it won't be!! You cannot take your people for granted and then expect them to "Wow" all your clients. Just won't happen!!
These three things – not a "lack of capital" or "being a mid-sized firm” – are what kills companies‎. Fix these three problems – ALL three of them – and you cannot help but be more successful!

Mark Zweig is Zweig Group’s founder and CEO. Contact him at

This article is from issue 1144 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.

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.