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Measuring the Success of Your A/E Firm

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We recently stumbled upon Using Four Metrics to Analyze Performance of a Professional Services Firm, an article by June Jewell, President and CEO of Acuity Business Solutions.

An excerpt:

Sometimes the day to day demands of running a professional services business can be overwhelming, especially for creative and technical entrepreneurs and project managers that do not have a financial background. Trying to stay on top of administrative responsibilities, hiring and managing staff, and keeping clients happy can make it difficult to really understand how the firm is performing. Many leaders also struggle to understand and analyze reports and financial statements, and determine where to focus their attention to ensure success.

While there are many important metrics and reports that you can look at each month to gauge your company’s health and profitability, you can get a pretty good understanding of the performance of the business by looking at just four metrics – the Win Rate, Utilization Rate, Project Profit Margin, and the Average Collection Period (or Days Sales Outstanding). By looking at just these four key performance indicators, you can simplify the process of analyzing how projects are being executed and managed, and help your project managers and leaders focus their attention where it will get the most benefit.

Jewell goes into a brief explanation of each of these four metrics, so we invite you to visit her blog and read on. Some of the information might not be new to you, but it’s always good to get a reminder. Jewell is also the author of a new book: Find the Lost Dollars: 6 Steps to Increase Profits in Architectural, Engineering and Environmental Firms. You can download a free chapter on her website.

(Psst! This is anecdotal evidence that Twitter can be excellent resource for design professionals. Have you followed @aeProNet yet?)