Six Ways To Make More Profit In The Architecture Industry
Architects say that - despite an upturn in their industry - fees are still being suppressed, value is still being overlooked and over-servicing is still widespread across the sector.
"We are prepared to give away our unique ability too readily and too cheaply", says Ryder Architecture's Tim Jeffery.
In light of these industry trends, how is it possible to make the margins you need? Here are six pointers:
1. Believe in yourself
You want to win more business, but to which sort of work are you most suited? Monitoring the productivity and output of your workforce through your enterprise resource planning system (ERP) is a great way to find out what your team does best.
Use what you learn to promote the true value of your strengths to clients. If you believe in what you do, you are less likely to "undersell" your services and walk away with an empty pocket.
2. Get a grip on your finances
They say turnover is vanity, profitability is sanity but cash-flow is reality. Sadly, nothing could be truer.
Poor cash-flow has the potential to erode those companies even at the top of the turnover tables. Capture time and expenses accurately, invoice immediately and always chase for payment if necessary, and you'll have the day to day capital at hand that will allow you to survive and thrive.
3. Capitalise on past experience
Hindsight provides the opportunity to learn from past experience. It's important to capitalise on it at every stage.
Use your firm's historical data to pinpoint the most lucrative types of projects your have delivered in the past. Focus your attention on the clients and sectors that have previously provided the best return. As a result, profit will flow.
4. Take on more
You need to increase capacity fast. But wait. It may not be necessary to bring in a team of expensive consultants.
Your existing resources could be maximised by deploying the right cloud based ERP tools.
Through helping you manage multiple projects and resources simultaneously your capacity to take on new business could be increased less expensively - and in the blink of an eye.
5. Plan like a grandmaster
Your clients won't want to accommodate for any oversights made previously "upstream" in the project's lifecycle, so make sure your proposals and planning reports offer a true indication of what's to come.
Using a planning system will help you draw on past, present and future data to build an accurate and achievable picture of the journey ahead. This will avoid disappointing clients and having to foot the bill for any unforeseen circumstances at a later date.
6. Keep projects on track
And once underway, keeping projects on track is integral not only to your business, but to your client's business too.
Move away from isolated spreadsheets and databases to a centralised "real-time" system. It will give you the insight you need to manage "scope creep" and other profit draining phenomenon right across your operation.