Are you ready to run a super profitable project-based firm?
Running a profitable firm is not about leaving things to chance. Those who succeed have implemented certain processes, monitor key metrics, and train their staff to think commercially.
In order to achieve this, you need to get a clear view of your bigger picture. You need to know:
-Which projects are making you money and which ones are costing you money,
-If there is enough work coming in to keep your staff on fee-paying work, and
-Is there enough billing lined up to cover your costs?
In this blog, we will discuss the PETAL Framework in more detail to help your architectural firm start to think critically about how you quote, scope, manage, bill, and review the success of your projects so that you can achieve exceptional profits and consistent business growth.
Why are some firms and projects unprofitable?
Let us introduce you to the evil twins of project management...
Evil Twin #1 goes by the name of “Underquoting”.
Evil Twin #2 goes by the name of “over-delivery”.
Underquoting and over-delivering on projects mean you reduce your profitability, and can ultimately end up making a loss.
For architectural firms, we notice time and time again that a major problem is underquoting. Often leaders and project managers do not always fully think through everything that is going to be included in the service, which leads to low fee quotes and a client expecting more than you have planned for. Because of the uncertainty with what is included in the service, clients request or expect additional requirements which they thought were included in the scope of the work and your staff end up doing additional work for free.
Not defining the brief properly and scoping out all aspects of the project leads to underquoting. Your team then over-delivers in order to complete the job, costing you more money than the project is worth.
Because these projects cost you money, you lose “creative freedom” - i.e the ability to pick up projects that interest you or will make your practice stand out in the industry. Ultimately, you need to be profitable to take on the more creative projects that you’re happy to accept will either only break even or might even cost you more in time and resources.
In order to rid your business of these Evil Twins, you need to quote accurately, be clear about what is included in the price to your clients, and make sure your team knows exactly how long they’ve got to deliver.
So what's the solution?
To afford more creative freedom and pick up projects that excite you and your team, you need to start thinking about how you can make sure your regular projects are profitable in order to pay the bills and grow your business.
This can be accomplished by following CMap’s PETAL Framework – plan, engage, track, adjust and learn.
Download our free guide and we’ll show you how to get your projects (and firm) back on track to exceptional profits and consistent growth!