TZL 1359 (web)



E very entrepreneurial architect, engineer, planner, or land surveyor who is an owner in their own design/consulting business knows they can make one of these companies profitable. But the majority – in my experience – fail to understand how much value they can create in their companies IF they make the right decisions. Many owners fail to understand how much value they can create in their companies if they make the right decisions. The truth about building value in your firm

culture, there is a double-dose of keep the value low. Not to mention the mentality that book value internal valuation methodologies are always preferred by ultra-conservative accountants and financial managers who worry about the firm’s ability to buy back ownership stakes from departing owners as they leave or retire. Over the last 40 years working inside and outside A/E firms as a consultant or board member, I “I have seen many firm owners build incredible wealth in their ownership stakes that they may not have originally thought possible.”

Mark Zweig

Part of the reason for this failure to understand the real opportunity one of these companies represents is the the fact that most firms’ principals have spent their entire careers in one or two firms, and odds are those companies were run in such a way that ownership was viewed as an “income club.” In other words, the only value of the ownership is that you can make more through your share of the profits. The ownership may have been given to them or sold to them with payments tied to bonuses. And then when they move on they basically give it to the next person down the line, selling it for a fraction of its real value and getting paid overtime. Another reason for this failure to understand the real value of their businesses is the accountants they get their advice from. When minimizing tax obligations is combined with the “income club”

See MARK ZWEIG, page 10


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