Category Archives: Architecture

13 Ways to Help Your Team Stay Motivated

The project is on the line. The deadline is looming. The details are so frustrating or the time investment seems overwhelming. When it’s time to work hard to get your team back on track, what steps are you taking to make it possible to remain motivated? Keeping your team motivated is one of the hallmarks of a professional architect, engineer or project manager. If you are struggling with a current project, employ these tips to get your team ready to go.

  1. Establish Specific Goals

Every project needs very specific goals. Create tasks that outline the very specific steps towards each milestone. It’s easy to stay motivated when you know where you are going.

  1. Create Daily Tasks

For many professionals, it can seem like the looming project is just too large to focus on – will you ever complete it? More specifically, you may feel as though you have “one more day” to get it done. Instead, at the start of the week or the beginning of each day create very specific tasks to accomplish. Tick them off the list as completed.

  1. Put a Carrot In Front Of Your Team

What’s the best reward for completing this project quickly or by the due date? Could it be a bigger payout? Could it mean a day off for the team? Is there something else your team will value such as lunch at the new restaurant down the road?

  1. Remain a Positive Leader

If you become discouraged, so will your team. Find a way to remain positive throughout the project. If you aren’t able to be positive, examine why.

  1. Be Ready To Make Changes When Necessary

Recognizing the need to switch the team up or to adjust the project goals can make a big difference in the long term. Not waiting too long to take action will help minimize team frustration.

  1. Keep Work To Work Hours

If you are always on your phone, always communicating with the client, always checking email, or always thinking about the project, you’ll burn out quickly. Instead, focus on taking a break each day from work.

  1. Go for A Run And Encourage Your Team To Do So Too

It’s important to clear your mind. Spending time outdoors can help especially when you feel overwhelmed or discouraged. The sunshine itself can boost your mood. Take a few minutes during lunch to go for a run or walk. Instead of meeting in a conference room, can you take a walk around the building as you discuss something with a team member?

  1. Track Productiveness

Are your team members being productive? Are you getting the most you can? Use time tracking software to see what everyone is accomplishing. Track your hours invested in every task of the project.

  1. Ask for Time When You Need It

Rushing to meet the deadline could mean disappointing the client with an inferior product. Avoid this by requesting additional time when it is necessary.

  1. Open the Lines Of Communication

Is your team lacking motivation because they don’t know the vision of the client? Make sure everyone is able to communicate openly.

  1. Use Technology

Are you using the most up to date technology to manage your project? If you are not streamlining your project management to include all project aspects in one software program, you could be wasting time and become frustrated.

  1. Recognize Your Team’s Achievements

When you get over a tough spot recognize your team for it. When you reach a milestone, impress the client, or otherwise accomplish a task that’s significant, recognize your success and that of your team.

  1. Celebrate Your Successes

It feels good to wrap up the project. When you have the ability to get back on track, get the project wrapped up and impress the client, give yourself time to feel good about what you’ve accomplished.

Motivated yet? Now is the time to take action to give your team the boost they need to get this project in the hands of the client.

7 Tips for Keeping Projects On Track During the Holiday Season  

Just as your finances, diet and exercise routine can get thrown out of whack with the arrival of the holidays, so can the progress on your various projects at work. The following are seven tips that will help you keep your projects on track this holiday season.

Be a Good Example

Your employees will follow your lead in terms of focus and intensity. Therefore it’s crucial that you maintain order and focus during the holiday season. This will communicate your desire to remain on track in regard to your projects, regardless of the date. After all, if you are getting lax in your own productivity, how can you expect your employees to do any better?

Ask For Regular Project Status Reports

Consider asking for either weekly or biweekly reports on all the projects you have going on. Knowing they will have to provide a progress report will help employees remain focused on the job at hand. Of course, it’s important that you are realistic about these status reports. It’s going to be more difficult during the holidays to be productive. Some of this has nothing to do with your employees so be reasonable.

Give Them a Break

The first two tips involved increased focus and intensity during the holidays. This tip goes the other direction, but is just as valid, perhaps even more so. The holidays are a busy time. As a result your employees will have many demands outside the office. Therefore, it is important that you allow them to take some time off to get things done. Give them some shopping days and let them leave early to go to drama practice for their play at church. Allow them the time they need to go to family functions. This in turn will lead to them being more focused during regular working hours because they will have the time they need to get their tasks done.

Put Big Projects on the Back Burner

No, it’s not always possible to put a project off until after the first of the year. Sometimes it just has to be done. If it is at all possible, pushing a big project back to after the first of the year can take a lot of pressure off your employees and allow your team to have some fun during the holidays.

Have Fun

Speaking of fun, you don’t want to be your office’s equivalent of the Grinch. You do need to acknowledge the festivities of the holiday season and make your office a happy place. Play holiday music if your employees enjoy this. Decorate. Keep cookies or trail mix available in the break room. In short, make your office a jolly place so your employees will enjoy being there.

Talk About the Good Things

Another way to keep projects on track during the holidays is simply to reminisce about the past year by looking over your business successes. At the same time, acknowledge your employees’ accomplishments. A good way to do this is to award your employees in some way or another.

Give Bonuses

Speaking of awards, perhaps the best way of all to encourage productivity is to reward employees in the form of bonuses. Yes, it’s great to acknowledge your employees’ hard work, like mentioned above. But, it’s even better to reward them financially. By doing this, you will ensure they work even harder for you during the holidays. Remember, a person who feels appreciated will always do more than what is expected.”
Try the tips listed above to keep your office on track this holiday season.

So Your Project Has Gotten Off Track: How To Know It’s Time to Make a Change

From the contractor’s constant “you can’t do that” to the client’s endless number of changes and ideas, it is very common for projects to get off track. Architects, engineers and project managers know when things become “off” simply because the project doesn’t feel right or no longer is anything like what it originally was supposed to be. How do you know when your project has gotten off track?

Is Your Budget No Longer Under Control?

A key indication that there’s a need to pull back from a project and reevaluate it happens when the budget gets too far off from the original goal. If you are working on a bid for a project and the client’s “desired budget” is no longer in line with where you stand, it is time to pull back. If you are using tracking software to create and manage a budget, it’s clear to see when overages become more than expected. When this occurs, it helps to reign in expectations and dollar amounts. Though not easy to do, it can be one of the most important steps you take to keep the project in place.

If costs become too high, clients will walk away. However, if you are tracking and managing budgets now, you can begin to see when costs reach 10% or higher above the desired budget and act. In doing so, you may not lose that contract outright.

Are You Investing Too Much Time for It to Be Worthwhile?

Perhaps harder for an architecture or engineering firm to manage are the labor costs of creating and managing the project. Often times changes, complications, and delays pile up. The amount of time you are putting into managing your project is becoming a problem. Can you possibly make a profit from the project when you can’t get the design off to the client because of changes?

It’s essential to track hours invested in any project from day one. In doing so, it is possible that you’ll be able to better manage the project’s costs. For example, tracking hours used can give you a clue that it is time to go back to the client for more clear instruction before investing additional time into the process.

Signs It’s Time to Do Something

Still not sure if you project is on track? Consider these common traits of failing or struggling projects:

  • The person with the original vision for the project is no longer on board or participating
  • The project lacks a person to provide direction and vision
  • The scope keeps changing because too many people are offering input
  • The original goals of the project are no longer present
  • There is no agreement on what a successful outcome is

Are the risks of rejection of the project too high? It may be necessary, then, to pull back on the project to take a closer look at expectations, budgets, and goals. Though it can be hard to put the brakes on when you’ve already spent a great deal of time and energy on a project, it is nearly always beneficial to regroup before moving forward. After all, you could pull back, make some adjustments, realign your numbers, and end up with a far more profitable project than you had when you started.

So Your Project Has Gotten Off Track: 5 Steps to Take to Start Getting Your Project Back on Track

It’s been a tough few weeks on the new project. The team is working hard but somehow you’re falling behind. Communication with the client isn’t going well or perhaps you are just overwhelmed and frustrated because things aren’t coming together as they should. Every architect, engineer and project manager knows the pressure of a project that falls behind. If you recognize that your project is slipping away from you, it’s necessary to grab a hold of it now and do something to get it back on track before it becomes impossible to do so. These 5 steps give you the direction to get back in business.

  1. Discover The Underlying Problem

The most important step is to find out what’s failing. Don’t look at just the surface but rather the depth of the problem. Ultimately, your company cannot move forward until you identify and correct the underlying cause. This could be:

  • Staff leaving the project
  • Limited time dedicated to the project
  • Poor communication
  • Unclear expectations from clients and contractors
  • Limitations in the scope of the project

Once you understand the cause, formulate a solution to deal with that right now. Then, take steps to move the project in the right direction based on your findings.

  1. Put In Extra Time To Get Caught Up

A big problem with derailed projects is a lack of time invested. Sure, you may have a team investing 40 hours a week on the project, but if they are not actually working hard at achieving goals because of a lack of motivation or direction, those 40 hours are worthless. It may be necessary to begin tracking hours worked and compare these against the outcome. What’s being accomplished within the hours dedicated to the project?

  1. Go Back To The Vision And Original Plan

In many situations, the heart of the problem stems from misdirection or changes related to the original plan. Are you no longer on scope? Is your project overrun in terms of budget because of the numerous changes present? It’s a common situation that can stall a project immediately. Go back to the beginning project. Determine if your vision is clear, if it should be reassessed, or if you should go back to the client to realign project goals and specs.

  1. Take A Close Look At Resources

Are you just throwing extra people at the problem, and money, and hoping it fixes itself? Take a closer look at your resources:

  • Consider re-delegating and re-allocating people to the right tasks, those they are best suited for.
  • Spread out hard or time-consuming tasks among several people to get caught up
  • Identify those who are not contributing efficiently

Your resources are the bread and butter of your company and the project. Using them wisely is critical.

  1. Talk To Your Client

Even if you’ve caught the project before it collapsed, it’s important to bring the client in on what’s occurring and why. The client may need to make changes to the project or expectations. Having open communication here is critical.

Taking the time to analyze your project on a regular basis by tracking hours worked, progress, changes in costs, and other details can help ensure your project achieves the best outcome possible.

So Your Project Has Gotten Off Track: How to Keep Your Project on Track Going Forward 

Any architecture or engineering project can get off track quickly. When your project slips off the original path or begins to fall behind, recognizing that it is happening and taking action to stop it is important. But what can you do to stop this problem from occurring again?

Recap the Problem

Now that the project is back on track and the fog has settled, you can begin to take inventory of what occurred and why. From here, you can keep the project on track while you also take steps to reduce the risk of the same problem occurring a second time. Determine what happened then analyze what you could have done to avoid it. Create an action plan that outlines the who, what, where, and how of how you’ll address this problem should it occur again. Apply the lessons you’ve learned going forward.

Tips for Keeping It Moving in the Right Direction

If you know what went wrong it’s easy to take steps to avoid that specific problem again. However, there’s more at risk in nearly all architecture and engineering projects. Much more can go wrong and delay or even halt the project again. These tips will help you to keep it going forward without further limitations.

  • Create very specific steps for the next phase of the project. Take more time to ensure that everyone on the project is on the same page. Invest more in the foundation of the project. Creating a very specific work plan can iron out many of these problems.
  • Free up some time to spend better managing the project. Of course, it is essential to manage your time on the project to ensure you do not go over the hours you budgeted for on the contract. However, it may keep the project more on track if you have more time to manage the details and the people involved.
  • Set milestones to check on progress at more frequent intervals. Don’t allow projects to get too far out of your reach. By scheduling specific dates and times to review projects, you can check on the details more thoroughly without investing a great amount of time at the end of the project trying to fix the mistakes.
  • Always strive to keep your team working towards a solution. While you may have the management experience and know-how to ensure the job is done properly, be open to opinions. Get your team involved in finding creative solutions to unique project problems and limitations. Keep an open mind as much as possible on how to achieve results.

Regardless of why your architecture or engineering project fell behind, it’s possible to reevaluate the mistakes made and the solutions to ensure the rest of the project goes well. Ultimately, this is a learning experience that can help your architecture or engineering firm to move forward. Using the right tools, such as time and material tracking software can help you to remain in control going forward.

So Your Project Has Gotten Off Track: How to Tell Your Clients a Project Is Delayed

You planned well. You spent a good deal of time managing every component of the project. The bid was approved. The budget was in hand. Somehow, changes happened, communications slipped and you are delayed. Nearly every architect project can fall behind from time to time even when plans are well laid from the start. The key here is to know how to tell your client the project is delayed without putting it on the line. How can you avoid disappointing your client while still presenting the bad news?

Ensure You Are Protected

It’s easy to look back now and realize you should have taken different steps. Yet, it is important to avoid some complications from the start.

  • Be sure your contracts outline key circumstances that could delay projects especially those you cannot control such as weather, material cost changes and availability, or client changes to the project scope.
  • Always create a realistic deadline, not one established to impress the client.
  • Add additional time into the project timeline.

When the project is about to get underway ensure these components are in place before you consider signing on the contract’s dotted line.

Be Upfront and Open with the Client

Let’s say a project has become delayed because of the change in scope presented by the client after the project got started. If you are tracking your team’s hours and managing the project timeline using documenting software, it is clear you’ll be able to show your client what’s happening and why. Be upfront with your client. If this change occurs, it is going to the delay the project by this amount of time.

Be Specific About the Problem

What is the delay? Perhaps you didn’t budget time wisely. There may be unknowns that required going back to the drawing board and starting over. It could be a lack of skilled team members or poor weather conditions. When it is your fault, state that. Whatever the cause, inform the client. By being misleading, you are creating a lack of trust not only in your management skills, but also in the finished project. That can cost you for years to come.

Keep the Client in the Loop

It’s also highly effective and beneficial to consider your client your team member not just the guy paying for the project. By including him or her into the planning process as well as any and all components of the project, the client is fully aware of why a delay is occurring, what it means to the deadline, and what he or she could do to avoid it. View your client as a part of the team from the start. Even if you are just now facing a delay, welcome your client into the office now and get everyone on the same page.

Ultimately, mistakes will happen. Budgets will need to stretch. Products may not arrive on time and you may even find that your clients are frustrated with the delay. By keeping the lines of communication open at all times you can keep that client’s confidence in you through the end of the project. Avoiding the client, making up excuses, or just not delivering as promised isn’t going to impress him or her or encourage them to work with you again.

 

Why a Project Management Tool Will Let You Have More Free Time  

Time is money.” Therefore, by shaving minutes and hours off of different stages of a project can make a world of difference in your income. After all, if you finish a job faster you can move on to additional money making ventures netting you and your business a greater income or just have more time to live life. So, how do you save time during the project management process? The following are a few of the best ways you can use project management tools to save you valuable time.

Financial Software

There are various types of financial software that can be used for project management. You can use them to create invoices to send to clients on a regular basis. Having your billing organized and scheduled will save you a great deal of time. Also, you can use this software to pay your bills. This will ensure you keep up with the money you have coming in, and your expenses going out such as the taxes you owe and the fees for engineers, printers and other professionals you pay as part of a project.

Personal Organization Tools

Another type of tool you can use to save time and stay on task is a personal organization tool. It will organize what you need to complete each and every day in the form of a daily to-do list. As you know, many days you spend several hours simply putting out various fires here and there. You likely end your day realizing that you still didn’t get A, B and C done that were crucial. As a result you have to work overtime. Some of this can’t be helped due to the fact that you have to deal with unexpected issues. However, personal organization can help this problem immensely. By using a tool in the form of an app or software to keep your own day properly prioritized, you can ensure you shave some work time off your day and set a good example for your employees.

Group Organization Software

To save time, you need to make sure your employees and associates are all on the same page. Group organizational software does just that. It places all tasks, lists and questions in a central location. As a result, your employees and everyone else involved in the project are able to see what is going on. You can even use this tool to assign specific tasks to your employees or to other professionals you are working with. Really helpful versions of this software also allow file storage and sharing to make the whole process go faster and smoother.

Time Measurement Tools

Each project demands hours of time to complete. Having an accurate total of the hours spent working on a project is crucial since this is the only way you can bill correctly and be paid fairly. Therefore, using software that will help you and your employees track the time spent on a project is important. Asking employees to stop each day and add up their hours and break that down per project can be time consuming in and of itself. So, by giving them an easy, quick way to do this task you will help them save time each day.

It seems there are never enough hours in the day to do what needs to be done. Thankfully, by using project management tools like those described above you can streamline your tasks and be more productive. As a result you will be saving valuable time.

What to Do When Your Project Goes Over Budget  

The job of an architect, engineer or project manager is to give clients what they want. It’s quite common for budgets and expectations to be well out of line. When a project is underway changes, unexpected delays, and changing material pricing can impact the budget. As a professional you know it’s not your fault the budget is overrunning its limit, but the client is looking to you for a solution.

Keep Budget Details Clear for Clients

From the initial bid to the completed project, it’s essential that everyone remains on the same page when it comes to finances. The initial bid will include a full breakdown of costs. If and when these costs differ throughout the project, the client should be provided with specific information. Tracking is essential throughout the project. Costs will change, but showing specific details about these changes in real time is an effective way to keep all parties involved in decisions about the budget.

Managing Estimating Errors

Cost overruns occur for many reasons. It is a common part of the construction process. Project management software can help to minimize these risks, but it’s also important to avoid them when possible. Key causes of overruns include:

  • Omissions: Ensure full cost detailing is provided to clients before and during the project
  • Assumptions: Ensure clients fully understand the required materials for the project and the price. Don’t base any cost on assumptions
  • Inadequate allowances: Careful consideration of materials, labor, and other costs needs to be taken
  • Price changes: Planning a buffer for this constant concern, securing better relationships with suppliers for long-term pricing, and ensuring the project moves along quickly to avoid delays can help

Other common concerns often revolve around inaccurate or incomplete pricing details. Organization, time management, and tracking of detailed product and material pricing can minimize these risks.

Managing the Overage

Budget overruns can be dealt with in only a handful of ways. It may be possible to negotiate price reductions for materials, but in most cases, it comes down to the client getting what he or she wants and paying for it or making changes. Steps architects and engineers can take include:

  • Exploring secondary options with clients and considering the consequences of altering the design
  • Showcase the value and worth of the expenses; perhaps it benefits or improves the project
  • Discuss circumstances openly; work with clients to find a solution
  • Pad bids with a percentage of potential overage from the start, clearly indicating the risks involved
  • Pull up specific data that shows line by line detailing of the overruns, where they occurred, and why they occurred

In some cases, overages cannot be compensated for and the project has to stop moving forward. However, if an architecture or engineering firm invests time in accurately capturing costs from the start, indicating the very real possibility to clients of potential overruns, and tracks budgetary changes step by step, it is possible to maintain a positive relationship with clients.

The right software can make this possible. Project management software that breaks down material costs and tracks time clearly answers the question of “why” that many project owners have. Architecture and engineering firms fully understand and work hard to minimize the risks of projects running over budget, but in many cases it happens anyway. Handling the problem effectively means remaining organized and communicating with clients.

15 Ways to Manage Conflicts on Your Team

In every project, workplace, office, and team, conflict will occur. It’s not possible to avoid it, but what you do to manage it can define the success of your engineering or architectural firm. To truly define your success, consider these simple-to-implement conflict management strategies.

#1: Focus on productivity

When managing conflict on the spot, aim for a solution that improves productivity rather than one that focuses on drawing out the conclusion. In short, stop the problem, and set a time to discuss it thoroughly after the task at hand is complete.

#2: Realize conflict stems from perceived misunderstandings

In nearly all situations, conflict starts and builds from the perceived incompatibilities of individuals. This isn’t necessarily an actual incompatibility but rather one that one or both individuals believe. By communicating this, you, as the project manager or team leader can stop the misunderstanding taking place.

#2: It’s often about feelings

Many people are passionate about the way they feel and what they believe. When someone else has an opposing view, a conflict can easily arise. However, you can often use team building exercises to show that, even if two people don’t seem to have the same view, they can work together.

#3: Acknowledge the conflict

The biggest mistake you can make is in not acknowledging there is a problem. Don’t avoid it, push it to the side, or just “let it alone.” State that you understand a conflict is present.

#4: Watch for the first signs of struggle

It’s easier to fix a problem when you can spot the conflict early on. Address the first bickering or communication undertones right away. If it seems like there’s a problem, or could be one, address it.

#5: Sometimes, people need to talk it out

Bring two parties into the office for a frank discussion. Provide them both with the opportunity to state their opinion and concerns. Don’t favor either. Just listen and let them work through it.

#6: Discuss the impact

Every conflict in any project will have an impact. Discuss what that is with the team. Make it clear that it is the conflict (not the individuals) which is putting the project on the line.

#7: Get people to agree that a solution is necessary

To manage the conflict with your team, you initially do not need them to agree on a solution. First, they need to agree that a resolution is necessary.

#8: Then, agree to communicate

Once they agree that a solution is necessary, everyone involved needs to agree to communicate respectfully to find a solution.

#9: Find some common ground

Discussions start when people let their guard down. To do this, find some common ground for the two or more people to agree on.

#10: Talk about the issue in a formal discussion

Level heads are important here. Talking through conflicts is critical, though rarely easy to do when everyone is angry or frustrated. Those are valid feelings. Recognize the need for a calm conversation.

#11: Make a list

When individuals cannot see eye-to-eye, sometimes it takes making a list. Write down the facts of the situation. Write down assumptions and beliefs as well. Clarify each position with each person.

#12: What can we agree on?

Asking open-ended conversations instead of offering a decision on your own is important. The goal here is to get people to come to an agreement together. Questions like this can help to get people thinking about the solution rather than the problem.

#13: Should we continue this conversation?

It’s a valid question and one that you need all parties to agree to in order to move on. Allowing people to voice all of their thoughts and opinions is important. Only once they do this will they agree to move on.

#14: Determine what each person wants to occur

Conflict management often comes down to you, as the manager, making a decision about the outcome. However, for that to happen, you need to know what everyone involved believes as the best solution – at this point, after having a thorough conversation.

#15: Make key decisions as the leader

Ultimately, the project manager needs to make a decision to resolve the conflict. Everyone at the table needs to agree to your decision. And, you need to document what occurs and what the end result was for later reference.

In many cases, conflict management is all about structuring and overseeing a conversation. Eventually, people can vent, listen, and overcome the communication problem or other areas of concern. Your job is to organize and manage the conflict resolution.

In It for the Long Haul: How to Manage Lengthy (Neverending) Projects

In some architecture and engineering firms, there’s no end date in sight for a project. It may seem to go on for years, with constant upgrades and changes. As long as your company is managing the actual milestones and receiving payment, it may not seem like too much of a struggle. On the other hand, not all clients are easy to work with and you may not want that lengthy project to tie you down too long. What can you do to effectively manage lengthy projects to ensure your time is being spent wisely?

Create Milestones for Achievement

Perhaps your firm has a development project with goals set over the next five or ten years. You’re confident the project will change at each phase. The work you are doing now may not eventually pan out. That’s why milestones are so valuable. Create milestones that clearly define the goals of the project at this point, what your next step of tasks or goals are until the next milestone, and what changes are to be made. Milestones, then, can serve as intermediate deadlines, providing your team with a clear “finish line” for the current tasks at hand.

Managing the Ever-Changing Project

In some cases, architects are faced with clients that don’t necessarily have a long-term need, but seem to be unable to make decisions. This is often the case when city planning teams are a part of the equation. In these lengthy situations, your team still needs to stay on task without over-dedicating too much time to any specific area that hasn’t been agreed upon as of yet. In this case, keep the following in mind:

  • Set specific goals for the project in small, bite-sized pieces. Ensure your contract allows for invoicing more frequently and without project spec approval.
  • Establish specific guidelines by the hour and then track those hours. For example, each time the planning commission requests changes, your team should track hours spent and apply those to the invoice for that milestone.
  • Ensure everyone is aware of your team’s desire to complete the project according to the realistic timeline initially set. However, be specific about what will delay the project. This ensures the ball is in their court.

When projects don’t seem to be heading in a profitable manner, shift the man-hours spent to other tasks and projects. Meet deadlines as needed, but avoid putting extra time into a project that isn’t going anywhere. Investing your talent into profitable clients sometimes means pulling back from other projects until the scope is clearly planned.

Perhaps the most important component to managing a lengthy project of any type effectively is to use project management software. These tools, like the AE-specific BaseBuilders.com cloud solution, allows you to consistently track the amount of time you are investing in any given project. It also allows you to manage invoicing and milestones. This keeps your team on track while allowing you to continuously see the profitability at every stage. Lengthy projects can provide long term cash flow and be very profitable when managed properly.

Employee Compensation Plans

How you compensate your employees can make the difference of whether or not or how well you can whether a down turn in the economy. We all saw it hit us in 2008 when the economy took a turn for the worst here in the United States. We saw countless times that companies:

  1. Waited a long time to lay anyone off even though they couldn’t afford too
  2. They were paying wages that just didn’t fit with the new economy.

So how can you get around this?

One of the things you can look at is how your employees are compensated. If you pay lower base salaries that you make up through a profit sharing plan, then if there is a down turn in the economy and the profits aren’t there, you get automatic cuts to your labor costs.

But if the economy is doing well, you will be sharing the wealth and sharing the profits of the company with the employees. By doing this you can reduce that minimum number of dollars that you need to bill each month just to breakeven. If you can reduce that then when they economy does go south you’ve got some cushion in there to maybe be able to whether the storm a little bit better.

The other place to look carefully is at your principle or owner compensation. This too is a place where there can be less salary and greater profit sharing, taking the money out as a dividend or distribution rather than a salary so that on a month-to-month basis when times are tight, your actual cost is not as high. When you do have the money, then you distribute it out. This is a great way to:

Most employees during this last down turn that we all went through, would’ve been happy to just have a job at the end of the day, even if it did pay a little less. And if they had low salaries with a high bonus or profit sharing, then the firm could have controlled costs without having to ask employees to take pay cuts.

In the interest of building your company to withstand a long-term effects of poor economies and to be around of decades, consider looking at your compensation plans to see if you can reduce the base but increase bonus and profit sharing.

The other thing that the bonus plan or profit sharing does is it outs the overall success of the company in the interests of the employees. If their projects are more profitable they get to share in that profit. So now it gives them the opportunity of an entrepreneurial spirit in working for you. It’s in their best interest to help the company succeed rather than just collect a paycheck.

 

Providing Health Benefits to Your Employees

For small businesses, like most architects and engineers, this is a huge expanse. Over the past few years we have seen these costs skyrocket.

But did you know that nearly 20% of Americans have secondary health coverage. What this means is they are covered by two health insurance plans because there are two working parents in the household. When this is the case, the have one plan be their primary coverage and the other is their secondary insurance. And while that is all fine and well, what is it costing you to provide secondary coverage to your employees?

One way to help limit the number of employees who are doing this is to have them participate in the cost of their health coverage. By the way, if an employee is using your insurance as a secondary coverage plan the benefits paid by the insurance company are much less but the premiums you pay remain usually the same- big price with limited benefits.

We did a change at our office where are employees were required to pay for 20% of their health insurances and we covered the other 80% rather than covering 100%. What we found was about 1 in10 of our employees opted out of our plan and elected to be covered by their spouse insurance. Usually this was because their spouse’s employer (hopefully it is a big company providing great coverage) was giving them good insurance and paying for all it.

Now we did not do this in an attempt to hurt our employees in any way, in fact we gave them each a rise to cover what their 20% share was going to be. We weren’t trying to take money out of their pocket, however, when a number of our employees opted out of our insurance plan, the company got the benefit of saving the remainder of those premiums that we had been paying.

For small architecture and engineering firms this can amount huge dollars.

So take a look at the health benefits you are providing to your staff and see if they are in line with what your company can truly afford to do.

Average net profit for 2015

Scrolling through PSMJ’s website I found an article about A/E Profit Margins and how these margins have been on the rise for the three consecutive years. 2014 saw average profits of 14.3%, the highest they have been in six years. 

While this is good news, I don’t get too excited about a 14.3% net profit and prefer to see profits in the upper teens or low to mid 20’s. Remember that this is the average of firms and the average is simply “the best of the worst and the worst of the best”.

Founder and CEO of PSMJ Resources Frank A. Stasiowski, FAIA, also believes that the 14.3% shouldn’t “…be an acceptable profit margin at all for an A/E firm,” “There are plenty of A/E firms that can and do deliver profit margins far higher than this.” 

So does your firm measure up?  How are you performing compared to the rest of the world? Do you want to reach higher profit margins? Of course you do. 

Now I can’t promise that you will make higher profits, but I can tell let you in on a little secret that will help your business run more efficiently ~ our software.

Our business and project management software offers you everything you need to run a successful AE firm more effectively and efficiently.  With the help of our solution your firm can stay organized and on task with every project that comes through your office.