Where Does Your Time Go?

Small firms are often overwhelmed by the task of focusing time and attention on everything from building their business to servicing their clients and even developing new markets. How can small firms gain perspective and use time effectively?

The most common metric used to determine the distribution of time is utilization, defined as the amount of billable time spent on project work. Small firm architects, engineers and practitioners are in business to deliver the design and construction goals and objectives of our clients. Our utilization, or billable time, may be as high as 63% (or more) depending upon the level of staff person, size of the project, demands of the client organization, and complexity of the project. A senior project manager may be 100% billable to a project, while a principal may only be 32%. What’s important is that your organization has utilization goals for each staff member, because utilization effects profitability. Unbillable time is charged to overhead which comes out of the firm’s profits.

For that small firm (less than 5 people) with 63% billable time, the 37% of staff time remaining needs to provide the firm with a high return on investment. As much as 20% should be invested in the development of new business, with the remaining 17% invested in management and administration.

What constitutes “development of new business”?

• Meeting with potential clients, sub-consultants and teaming partners
• Understanding and defining where project opportunities are
• Identifying new targets (projects)
• Networking
• Breakfast and coffee meetings
• Client-focused events
• Preparing proposals
• Creating new opportunities

How should time be invested in management and administration? The obvious things are: AP/AR, collecting on outstanding accounts, staff development and coordination meetings. Often overlooked is advance planning to accommodate peak demand without permanently increasing overhead. Invest in finding other sources (independent contractors, consultants or part-time resources) that can support staffing demands so that they are already identified when such a situation occurs. An investment in finding people is just as valuable as an investment in finding work, but it’s hard to do when billable time takes priority. Take the time to look for intellectual capital before you need it.

Analyze how you spend billable and unbillable time, establish goals for utilization and track your performance. These are the first steps to becoming the profitable firm you’d like to be . . . no matter the size.

Local v. the Best

“I need a local presentation coach. Do you have a recommendation?” Yes, I do, but “Why does local matter? Shouldn’t you want ‘the best’?”

This client’s mistake was failing to acknowledge and properly use technology to find the best consultant, instead of the closest. The best one I knew (in my opinion) was in California. The fact that the client was on the other side of the U.S. in an engineering company shouldn’t have mattered at all. Too often, we think that all of our consultants have to serve us locally. Much of that is the nature of our business—we need a local civil engineer or local person to do community outreach. But the truth is, this is a global community.

In the age of technology, marketing consultants in Texas are writing proposals for firms in the West, accounting firms in Georgia are providing services to firms in the mid-West, and that is how it should be. Our quest shouldn’t be for the local firm unless local is the best. This is especially true of back-of-house functions that are largely managed via e-mail, video conference, Go To Meeting® or other platforms.

Accountants, marketing professionals, information technology specialists and even many human resources functions are managed effectively every day and at a lower cost via a virtual or distance provider. Ask yourself:

1. Is local necessary or preferred? If it is preferred, then what’s the trade off? If you’re in Canada and you need someone with expertise in Canadian law, then this might not apply. But, ask the question.

2. Is there a cost saving or benefit? Too often we assume distance costs more. Today, distance often costs less. There is no travel time and there is efficiency to be gained when an individual can focus on the task for which they are the best qualified.

In the end, the client hired the presentation coach from the West, and scored higher than they ever had. A winning choice!

Karen Compton, CPSM, principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.

Do You Really Want To Have A Foreign Affair?

Contrary to popular opinion, the grass isn’t greener on the other side.  It’s true of situations in life and it’s true in business.  To those comparing the domestic dusty plains to the international green pastures, the BRICK (Brazil, Russia, India, China and Korea) markets may appear green. But, upon closer examination they are fraught with their own challenges—differences in business culture, contract law, design and construction standards, and process, as well as, the need to develop a process for developing new business.

It goes without saying that the easiest way to branch out into overseas business is if a client (domestic) wants to take you there.  But, what if you still want to “go international” but don’t know how to proceed.  What do you do?  My best recommendation is to meet with the U.S. Department of Commercial Services.  The U.S. Commercial Services is the trade promoting arm of the U.S. Department of Commerce’s International Trade Administration. They are located in over 100 U.S. cities and in more than 75 countries in order to assist U.S. companies in getting started in exporting or increase sales to new global markets.

U.S. Commercial Services is able to provide information regarding compliance, market access, standards, policies, barriers, and competitiveness in order to support and inform your decision to explore an overseas expansion.  Additionally, they able to offer prospective companies low to moderate cost information via conferences, seminars, trade missions, and training.

U.S. Commercial Services is not just for the export of goods.  It is a viable and strategic way of exporting intellectual property in the form of design, construction and engineering.  For more information or for the U.S. Commercial Services office or location near you, go to www.trade.gov

A foreign affair may be in your future.

The Number 10

Just think about it….10 years ago Smartphones®, Facebook®, LinkedIn and YouTube® didn’t even exist.  Yet…in that short period of time these advances in technological communications have changed the world.  In that same 10 year period, our industry has seen change too with the advent of sustainable design, building information modeling, interactive presentation formats such as Prezi® or Keynote® and the merger or acquisition of several prominent architecture, engineering and construction firms.

What the next 10 years will hold is yet to be defined.  But, some things we know are sure. Today’s mid-level project managers and job captains will grow into roles as associates, principals and partners within firms, and clients and owners within organizations.  Why is this important to consider?  The next generation of professional is technology driven.  They communicate indirectly through email, texting, and social media and frequently (i.e., 20+ times/day) as compared to the generation of 40 something plus professionals that communicate directly via phone, over lunch or drinks and infrequently (i.e., 10 times/week).

The big question becomes how will this affect our industry?  More importantly, how will it affect our ability to develop relationships with our clients and find resource professionals to help us grow our businesses?   While I don’t purport to know all of the answers, there is one thing I do know: we must be part of the change we want to see in our industry.  

What changes do you see that may affect the way in which we grow and develop our practices?  How do you see yourself as engaging in that change?

REALLY? IT’S NOT ABOUT YOU

Networking. Most of us think of this “painful” experience as having to ‘work a room” to develop relationships with people that you don’t know, so that they can help you win work. WRONG.

Networking is the process of developing relationships with individuals that can help YOUR CLIENTS SOLVE THEIR PROBLEMS.  This may come as a shock, but, it’s not about you! It IS about your client.

If you can only ask your client one question, ask them what keeps them awake at night.  While you may secretly be hoping that it’s an engineering or design dilemma, don’t be surprised if it’s a business problem.  Maybe they just lost their city manager or administrative vice president; maybe they're facing a union negotiation or just “politics as usual.”  What keeps your clients awake may have nothing to do with your firm or its business line.  Yet, if you are able to solve it, offer a solution or point them in the direction of a resource, and you will become that thing we all want to be—the trusted advisor.  So, how do you do that?

Don’t limit your networking events to events where you will meet your peers and colleagues.  Peer to peer networking doesn’t get you very far.  This is peer to partner networking.  Consider tangential relationships—legal professionals, accountants, human resources, governance and leadership professional—the list is endless.  But, the rules are the same:

1.     Talk less about yourself and more about them; find out what do they do and for what type of client.

2.     Learn types of clients that are best for them.

3.     Understand how you might be of benefit to their business or their professional success.

4.     Finally, whether you see a partnership or not, take their card.

Last week, I had a client ask me if I could refer them to an attorney who could review their existing contract language to see where their agreements might be “weak”.  Believe it or not, I had some referrals and I solved their problem.  Can you solve your clients problems?

A New Idea in This Economy? Are you crazy?

Yes!  I am crazy!

In summer of 2010, phone calls kept streaming into our offices from architecture, engineering and construction clients (current and past) looking for consultants with special skills. They asked for marketing professionals, accountants with experience in the FAR, attorneys with specialties in water intrusion, and more. As if I “had the answers,” they were calling me! While each firm’s need was different, every referral request had one common criterion: “They must know our industry.”

We knew the industry, and we saw an opportunity to meet this demand. With a team of dedicated staff, we designed a searchable database that allows firm owners, small businesses, and emerging practices to find consultant and professional resources that fit their needs. They can read or post reviews of service providers or even recommend one. Today, this database is known as Industry Speaks.™ Our tag line is simple: “Consultants that speak your language.”

I later found out from friends of mine that lead professional associations that they can’t provide recommendations.  Their organizations are concerned about “conflict of interest” or being perceived as “playing favorites.”  So, where does that leave the millions of firms each day trying to find solutions?

The truth is, every day we each have a choice to make.  We can be part of the group of people who complain about why something doesn’t exist or why “they” can’t solve our problems.  Or we can do the thing that drove us to be creators—we can solve our own problems. 

Which choice did you make today?  It’s not too late…be part of a movement to change something that “they” haven’t.  Join us at IndustrySpeaks.  Be part of our Industry Ideas.  We’d love to have you.

Watch our instructional video to learn how you can increase the competitive advantage of your company today!