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O P I N I O N
Eliminating waste
B usiness is good but you’re not hitting your profit goals? Look to the expense portion of your income statement. I have always said I can’t find a $10 million AEC firm that I couldn’t cut between $500K and $1 million worth of expenses out of. “How do you stack up in these seven areas? Is money being wasted? If so, take action now!”
go to offices regularly with no reason to be there. I say go when there’s a need to sell a project or do something billable, but otherwise minimize non- billable travel. But there are other examples of un- paid travel. Sometimes I find firms are too willing to make unpaid trips to sell when they should be charg- ing clients for the work they are providing. Being too “easy” in this regard has ruined the finances of more than one architect, and creates an image of despera- tion in the eyes of the clients that can be hard to shake later on when it comes time to negotiate a fee for a real job. “Sometimes I find firms are too willing to make unpaid trips to sell when they should be charging clients for the work they are providing.”
Here are some of the more common expenses that get out of control: 1)Office space. How much space does each person really need? If you have 500 square feet or more per employee, you have way too much. I was in an archi- tecture firm not long ago where the bulk of their em- ployees sat in a carrel that was about 30 inches deep and 50 inches wide. Just think how many employees you could put into your space if you did that? 2)Branch offices. The more you have the higher your overhead will likely be. Duplicating conference rooms, receptionists, non-billable inter-company travel, and additional accounting costs and tax re- turns can all be part of the equation. Plus, the more offices you have the harder it is to maintain your consistent culture and the more management time you need to spend. 3)Unbillable (and unnecessary) travel. This is, of course, a bigger problem when you have a lot of of- fices. I was never one to think the boss should just
Mark Zweig
See MARK ZWEIG, page 4
THE ZWEIG LETTER October 7, 2019, ISSUE 1315
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