Turning things around in 2018
As great as business is right now for most AEC firms, believe it or not, there are still some out there struggling. Struggling to grow, struggling to make a profit, struggling to be successful.
If this strikes a chord with you, then consider the following:
- The first order for any business to achieve its ultimate success is to survive the present. Nothing will happen if you can’t do that. And that usually means some costs will have to be cut. Look at every single non-essential thing you can cut and cut it. Sell off assets that don’t make you any money and instead simply increase your overhead.
- My experience is that most small businesses aren’t profitable when the owners are taking too much money out of the company for what it generates, when the marketing budget is being shortchanged, and/or when the accounting information isn’t there to keep everyone informed on what’s really happening. These three conditions are nearly always present. If this describes your firm, fix it!
- You may need some new team members. Rarely can the situation be resolved with the exact same people. This team got into trouble. It may take a different team to get you out of trouble. That doesn’t mean the people who need to be reassigned or cut are bad people. They just aren’t the right people for you right now. If this is your situation, deal with it.
- Negativity and “devil’s advocate-ism” cannot be tolerated. There will always be those people who say the situation is hopeless or things will never get better. They are a cancer, plain and simple, and will pollute the minds and mental attitudes of all around them. You can try to turn these people around but most of the time that doesn’t work out. If you have these people, they need to go.
- You have to have a clear sense of what the priorities are. Not everything is equally important. You can’t do everything at once – there’s only so much time and money to go around. Cash flow is usually at the top of the list when it comes to survival and turning things around. Collect your money – slow up on disbursements – and get the right system in place to predict where things are heading before it is too late.
- Communicate with your staff! They need to know what is happening and what you will be asking of them as soon as possible. To get their understanding and support you need to do some selling of your plan. Don’t minimize the importance of this step. If this sounds like you, do something about it.
- You can’t cut your way to growth and profitability. You have to invest in the right things that will help you bring in new clients and projects and do a great job on them when you do. This is one of the most difficult aspects of a turnaround – knowing what to cut and knowing what to spend money on.
One last thought: If you are serious about effecting change, the firm will have to seem different to everyone who works there or interacts with it. Do you need a new name? Changes to the office layout or décor? New reports tracking the right numbers that everyone sees? How about other changes? Stop talking and start doing!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at email@example.com.