Service-based businesses often find that they simply don’t make enough profit no matter how many clients they have or how amazing their staff members are.
Let’s take small architecture firms as an example. You, as the firm’s owner, may look around and feel that everything is running well. You have a great staff; the clients you have currently are happy with the work you’re providing. Your reputation is sterling. So, what’s happening with your profit margins?
Of course, you’re scraping in profits to pay your staff and sustain the business but at what point will the company actually, begin to grow? If you bring on more clients, more money will trickle in with your current staffing situation. However, eventually, you will have to hire more architects, especially if you’ve already reached the capacity at which your present staff can operate, and continue your exemplary work. You’ll be back to square one; therefore, bringing on more clients may not be the answer you’re seeking at this moment.
You may feel as if you have explored all of your options and you only have to hope for the best. We don’t agree, and we have a few ideas that may make a big difference in how you might grow your small firm and increase your profitability.
Architecture Firms Often Experience Different Types of Monetary Leaks Than Most Other Industries:
- Failure to track the time spent per project– if you look at the time spent on your projects, it’s possible that you’re giving away services and time for which you could be charging.
- Product Sales– If you’re not stocking a line of fittings and fixtures that you could sell to clients, then you’re leaking money.
- Additional Services– If you’re giving away services that you could be charging for, you’re leaking money here too.
When you begin the process of providing a quote to your potential clients, consider creating an ‘additional services’ section. It doesn’t have to be extensive, but you know very well that you have talent and expertise that your clients may well need to receive. They will also desire the quality of service you have a reputation for providing. If there is an opportunity for clients to select additional services they will know that they have more control over their needs and you will no longer have to provide ‘all-inclusive’ services every time. This quality added feature alone will allow you the opportunity to improve the services that your clients will select.
You will always have the original tier quality of services that you typically provide. However, pulling back some of the higher end services that you may have been giving away, but should have been considered extra; you will gain the potential to “upsell” them to your clients. At the same time, you will provide your company more income per project.
Consider Rebranding and Marketing to High-Value Clientele ”
- Should you eventually deduce that the best plan of action would be to find higher paying clientele– You may quickly realize that this is not always easily accomplished. Unless you already have a talented marketing team on staff, you will find that you may need to hire experts in various fields to assist you in the process of moving your firm to the next level.
- Firm Reestablishment– will most likely require rebranding the firm so that you’ll have the ability to appeal to clients who need to spend a lot more than $10K to receive the competence and services they require to accomplish much larger and more intricate projects. You may realize that (as you submerge yourself in these changes) up until now; you’ve been providing $50,000 worth of services for as little as half their value!
While you’re repositioning the direction of your firm, by all means, be aware of the value of working with branding experts. Developing a branding strategy is of utmost importance, and can be a daunting task. You must decide whether or not to reintroduce yourself into a new and much higher paying market, with finesse and success.
Rethink Your Marketing Strategies – The architecture and design industry has changed significantly. Winning design work on the integrity of a portfolio is in the past. Firms rarely market their services to acquire clientele. With the rise in competition, clients are becoming far more sophisticated in the procurement of architectural services through social media and digital marketing options.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
