5
FROM THE FOUNDER
So many firm owners in our industry could do even better for their people and themselves, and build real value, if they were more entrepreneurial. Selling firm owners on entrepreneurship
W hen you look across our industry at the tens of thousands of AEC firms that make it up, it’s clear that most of these professional services firms are not what one could consider truly entrepreneurial enterprises. Not to say that the majority of these companies don’t provide a very valuable service to their clients, provide solid jobs for their people, and make a decent living for their principals, because they do. But at the same time, so many of these firm owners could do even better for their people and themselves, and build real value that could help their families for generations IF they were more entrepreneurial.
Mark Zweig
As someone who has worked in and around AEC firms for nearly 44 years now, it’s clear to me the reason why more firms in our “industry” don’t act more entrepreneurial than they do is multi-faceted – but ultimately, it really comes down to one thing. Their owners aren’t sold on the benefits of doing so. And if the owners aren’t sold, the employees certainly aren’t going to be able to make it happen. The thought change has to occur at the top. I have stated before on these pages that the primary distinction of an entrepreneurial venture versus a small business lies in value creation. The entrepreneurial firm owner is thinking long-term and
not trying to maximize their annual extractions from the company. Instead they want to build the company such that there is an even bigger pot of gold when they decide to get out. There are several implications of that, including: 1. The firm HAS to be committed to growth because growth rate greatly impacts value. I have written before about the fallacy of historic EBIT multiples when it comes to valuing rapidly growing companies in this industry and others. All you have to do is look at the public markets
See MARK ZWEIG, page 6
THE ZWEIG LETTER MAY 6, 2024, ISSUE 1536
Made with FlippingBook flipbook maker