Profit planning wasn’t a concept I was familiar with. I distinctly remember our first profit and not knowing what to do with it. I didn't have a plan. I didn't even know I needed one. That’s probably one of the best problems to have. I don’t remember what I decided to do, but I know that was the start of many efforts to come to grips with profit planning in case the miracle happened again. I can’t claim to be an expert on the topic of ’Profit Planning’, but here are my thoughts.
Unique Methods is a concept that I learned from The Strategic Coach, Dan Sullivan. Everyone has processes that are unique to them. No two people go about design exactly the same, for instance. There are three main benefits to identifying your unique methods.
Taken together these three benefits add value to your firm by making your successes repeatable on every project.
How often do you complete your timesheet?
I personally have used twice monthly, weekly, and daily timesheets. You are probably different than me; but when I filled out my timesheet it usually went something like this ...
Which would you rather have? Spectacularly detailed accounting records or a stream of desirable projects?
Which do you spend more hours per month developing?
Which adds more value?
Whenever the economy tanks, I get really interested in cash flow. It's a habit that I try to hang onto when things are going well, too, because you can run out of money any time. But there is something about impending doom that gets your attention. Most of the guidance you can find on cash flow is geared to 'small businesses', less than 5,000 employees! This isn't very helpful.
In a nutshell cash flow is predicting your cash-basis profit or loss. It is the nature of predictions to be wrong almost all the time. So a cash flow projection isn't reality, but you want to get close enough that there aren't any devastating surprises.
This simple spreadsheet below is my attempt to get a view of the income side of the cash flow projection. The idea is to quickly allocate your fee for a project over time so you can compare it to the other ingredient - an expense projection.
This is what I have learned about working with Building Committees. First, make no mistake, Building Committees are very different.
I was assimilated by the Apple empire quite some time ago. I know I am not alone. This post is for you fellow ‘assimilatees’.
MyCorbu entering Beta Testing this week is pretty big news, but it's not the Big News...
The perennial marketing problem is twofold: getting noticed and being considered as a solution when a need arises.
I am going to share how to build a spreadsheet that you can use to project your financial future - kinda.
Well, because projections are notoriously 'iffy' - just too many unknowns. And almost all of them are beyond your control.
But even a poor projection is better than the crossed finger method.
I have used a spreadsheet like this for years to monitor our backlog of work. I have to admit that my interest in projecting fees into the future was usually because I feared that our work was drying up. It usually wasn't. Over time you learn that projections more than three months out aren’t very trustworthy - but really worth doing for the insights that your gain.
I subscribe to Seth Godin's blog. He throws out tons of ideas. Most are interesting. Some are applicable to any business enterprise, even architects.
This one struck me as particularly helpful. I sure could have used this idea often.
For this past year I have been using Harvest for bookkeeping. As a reseller of Harvest the account has been free. Harvest isn't designed to do bookkeeping, but its 'personality' lends itself to being customized for that purpose.
I need to do something different for 2017. You might find a solution here for your 2017!
One of my favorite strategies for avoiding omissions uses the Spec TOC as a checklist. I take a copy of our Specifications Master Table Of Contents [TOC] and just scan down through it. I would do this at least once, often twice during each phase of the project. Here is how it would help me.
The MyCorbu project is coming along - slowly - but there has been a bit of progress since my last update two months ago.
There are 21,000 architectural firms in the US.
17,500 of them have fewer than 10 people in total.
Why is the typical architectural firm small?
Every time you double the size of your firm, you also double the complexity that has to be addressed. 1 person; 2 people; 4 people; 8 people - three doublings is about the limit most firms learn to handle.
In military terms architects work in squads, never mastering the platoon, much less the company or battalion.
I think these 10 issues are the key to growing beyond that limit.
You don't want your client's last experience with you to be tainted by frustration and abandonment.
You don't want your last experience with your client's project to be frustration and a black hole of time and effort.
What has put both parties in this situation?
Is there a sure-fire way to avoid this situation?
- Ok, here are some tips.
I only worked in three other firms besides my own. The closest thing to a reading list that I encountered had just two items: Graphic Standards and Sweets Catalogues.
I'm wired a little different than that limited version of self-improvement, so we had actual books in our library in addition to the 50 lineal feet of catalogues.
Whether you have arrived at a fee by a wild guess or a fee schedule you want some kind of corroboration.
One option, if you keep good records, is to compare this project to a similar project. Was the fee adequate on that other one? Usually the two projects are dissimilar in some way.
Another way of checking the 'rightness' of an architectural fee is to evaluate its 'rightness' when viewed as a design budget.
This option involves doing an evaluation. It is fairly easy to 'spread out' the fee over the design phases to see how adequate the fee actually is.
I've written about what I think every architect should be doing about marketing. This flowchart may make those suggestions a bit easier to follow. At least it is visual.
The Journey to Todoist
I have always used To-Do lists.
Before computers they were paper, of course. I went through all manner of notebooks in my search for something ever better. I even used a folded piece of paper that would fit in my shirt pocket; moving from quadrant to quadrant until I had to start a new sheet by copying the uncompleted tasks forward. Lightweight and convenient.
These ad hoc systems gave way to serious 'organizers' like the Franklin Planner, then the Covey Planner, then the Franklin-Covey Planner. We are up to the late eighties now and I found a dead simple system to use. It only had one desirable feature. You didn't have to copy tasks over to a new piece of paper because it was digital. You carried a piece of paper, a printout, for portability; but you only had to write each To-Do once. Magic!
This is one of the chapters in my e-book, Trello-PM. Here's a glimpse at how you might develop a Project Master Template. I think it is a great Competitive Advantage using a tool like Trello™.
See what you think...
Hey, I'm Rick Wolnitzek and Architekwiki is my blog for sharing what I've learned practicing architecture for ... a long time. Enjoy!