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HR | FINANCE S U P P L E M E N T S Pages 9 - 12

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E D I T O R I A L

T R E N D L I N E S Group insurance stable

Growth AND profitability in the coming year Mark Zweig offers three strategies to attain both. I t seems to me that many – if not most – companies in our business today have given up on the idea that they can grow in this economy. Instead, they are all focusing on making a profit and maintaining their cash position – even if that means no growth. On one hand, this strategy makes perfect sense. Growth WITHOUT profitability and good cash flow can ruin your business. It is a fundamentally unsustainable position unless you are in a business like Pandora Radio or some other Internet-related entertainment or social media enterprise. For the rest of us, we have to make a profit and we have to maintain a decent cash flow. We don’t want to run out of money or jeopardize our credit facilities. Profits are essential. On the other hand, growth is essential, too. Employees expect –

in fact, they DEMAND opportunity (at least the best of ‘em do). Just try providing that opportunity in a stagnant or declining revenue scenario, not to mention management and ownership. We need to keep them motivated and

$5,500 $6,000

$3,000 $3,500 $4,000 $4,500 $5,000

Mark Zweig

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2011

F I R M I N D E X ADD Inc.................................................................. 5 Baskervill............................................................... 5 Bernardin, Lochmueller and Associates, Inc......... 3 Buck Engineering................................................. 11 Degenkolb Engineers............................................. 2 GATE LLC................................................................ 9 JMA Architecture Studios................................... 11 JQ Dallas LLP......................................................... 8 Michael Baker Corporation. ................................ 11 Perkins+Will. ..................................................... 2, 5 RBF Consulting. ................................................... 11 The LPA Group..................................................... 11 TLC Engineering for Architecture.......................... 5 It should be no surprise that with the rising costs of healthcare, A/E firm spending on group insurance has been on a steady increase during the last few years. According to ZweigWhite’s 2011-12 Operating Expenses Survey, monthly group insurance costs per employee have climbed from a low of $4,340 in 2007 to a four-year high of $5,630 in 2010. This year, however, saw a slight decrease to $5,613. – Margot Suydam, Survey Manager 2011 AEC Mergers and Acquisitions Summit Date: Dec. 1 - 2 Where: Palm Beach, Fla. www.zweigwhite.com/events/ mergers/index.asp

keep them fresh. Growth is the best way I know of to ensure that we are addressing our managers’ needs, too. So let’s get back to now – late 2011. The year was about like 2010 – maybe a little better at the beginning of the year and a little worse now. No one thinks 2012 is going to be a whole lot different. How can you grow and still be profitable? Here are some ideas to consider: 1) Reallocate your marketing dollars. Maybe now is the time to take a fresh look at all of your sectors, marketing activities and budgets. Whenever I recast marketing expenses by market sector in an A/E firm, I usually find that what they sell the most has the lowest marketing costs as a percentage of revenue, and what they sell the least of has the highest. There may be some reasons for this to happen, but by and large, the opposite scenario will make more sense. Throw gas on the fires that are burning and stop wasting it on markets that aren’t buying. And maybe the activities have to be different, too. More e-blasts, more webcasts and webinars, more seminars for clients

See Mark Zweig, page 2

Growth WITHOUT profitability and good cash flow can ruin your business.

The secrets to staying Hot in chilly economy

I N S I D E

xz top player: Former banker leads firm to success. Page 3 xz Best firm: The ‘GATE’-way to education and retention. Page 9 xz M&A Profile: Like having a big brother. Page 11

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