Whether it’s inefficiencies, theft or just plain management incompetence, professional firms (e.g. Architectural, Engineering & Environmental) are often bleeding lost money and many have no idea it’s even happening.
June Jewell is a CPA and owner of Acuity Business Solutions. She has 28 years of business management consulting experience and has seen many cases of companies losing money and not even aware of the problem.
She after extensive research, June states that the architectural, engineering and environmental firms she works for as a consultant, easily lose $100,000 each year through inefficient and ineffective practices. It’s money just being flushed down the toilet.
Jewell was quoted, “Of course, sometimes the waste is much, much more – and this goes for larger and smaller businesses. The problems are usually so fundamental to a business that they will never see why and how they’re bleeding money; they’re too close.”
June Jewell is also the author of a book titled “Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering, and Environmental Firms.”
Her book details various step that professional firms can do to locate lost money. There are several nooks and crannies in which firms are apt to lack efficiency and that means lost money.
In this post-recession economy, Jewell says, it’s vital for firms to tune up their business management practices in order to thrive.
Below Jewell provides reviews covering three key areas where most firms can identify potential issues and turn unnecessary losses to gains:
• Company culture: While the culture may vary somewhat from one firm to another, architectural, engineering and environmental firms share some of the same characteristics. One is that their founders tend to go into business because they’re creative people who love what they do — not because they’re business people. So they don’t focus on profits, and they tend to be casual managers with regard to employees’ time. Shifting the culture to a focus of being profitable is not only necessary for sustaining the business; it allows creative people to do more of what they love.
• Ineffective practices: Of course, there are many moving parts in an A&E firm, which means there are many potential areas for improvement. That includes customer service, time management, marketing, strategic planning, accurate budgets and estimates, and the cost of lost opportunities. Failure to create an accurate, meticulous job estimate, for instance, can have multiple consequences, from having disappointed clients to jeopardize projects to losing money because time, materials and other costs were not accurately forecast.
• Systems & IT: This is the third way to improve business management and increase profits. Technology is able to help companies leverage their resources more effectively, yet many of them are still using outdated software and non-integrated systems. By looking at systems as a strategic investment that can help them to be more competitive, they can realize a great return on investment (ROI) from their projects. While the transition from old to new software has its cost in time and work, the efficiency gained in future work production is worth it.
If your professional firm is a potential target for lost money, don’t delay and get expert help.
June Jewell concludes, “I’ve worked with hundreds of A&E firms in my 28 years of consulting, and I see these shared problems so often, I offer what I call – the $100K Challenge – That’s a guarantee that I can work with any business that’s doing a few million dollars a year in business and find $100,000 they’re losing in profits.”
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