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OPINION
The struggle with subscale
These firms often rely on few clients, multitasking staff, and undocumented processes, creating volatility, inefficiency, and growth challenges.
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A ccording to U.S. census data, 80% of engineering firms and 90% of architecture firms have fewer than 20 employees. Those figures rise to 97% and 99%, respectively, for firms with fewer than 100 employees.
Most architecture and engineering firms are subscale. But what do we mean by subscale? There’s no formal definition and no precise size of firm that signals “scale.” However, here are some of the signs of a subscale business (in any industry):
lack of scale and allow smaller firms to operate like and compete with larger ones. 1. Volatility: The problem: Lower volume naturally means higher volatility. At a small firm, losing that big client could mean 20% of revenue walks out the door at once. At a larger firm, that might only be 2% of total revenue. This is especially challenging in an industry that prides itself on working with current clients; the downside is client concentration. Even if clients aren’t
Matt Cooper
Difficulty absorbing a loss of one client
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Employees wear two or three (or 10) hats
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■ Certain functions are single-threaded (e.g. only one finance employee) Processes are “in someone’s head” The same endemic problems for these subscale firms tend to crop up over and over again. This article outlines the top five we see when talking with firms, plus spells out how technology can help support a ■
churning, lower volume naturally means higher sensitivity to project delays or slow- paying clients.
Tech support: While technology isn’t a
panacea for volatility, business technology
See MATT COOPER, page 10
THE ZWEIG LETTER SEPTEMBER 29, 2025, ISSUE 1603
ELEVATE THE INDUSTRY®
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