One of the most compassionate things that we can do for our people is to run a successful and financially profitable business.
Hello architect nation, and welcome back. Enoch Sears here, founding principal at Business of Architecture. If you're running a practice, you know the creative work is the fun part, but managing cash flow, forecasting revenue and understanding profitability, Well that certainly can feel soul sucking here at Business of Architecture and here on the show, our goal is to make architecture enjoyable again. And I was quite pleased when I had the reach out from a potential podcast guest, Mr. Ryan Mayhew, who happens to be a senior project accountant at H Okay, he wanted to come on the show because he'd had the opportunity to help scale a small architectural practice to over 40 people that was later acquired. He also had the opportunity to have worked in some of the largest architectural practices, including Gensler and H Okay, where he now works. So excited to have him here on the show to get a non architects view of the financial side of practice management. So if you've ever been frustrated by project finances that just don't add up, maybe you're wondering if growing your firm will actually make you more money, or just tie a ball and chain around your foot. Or maybe you feel totally in the dark about how big firms seem to run like clockwork. Well, it seems like your life is a life of never ending chaos on today's episode, you'll discover how this insider says and why he says, most architects are flying blind, and the critical financial that you're probably missing the data, the counter intuitive budgeting approach that helped the scrappy startup grow to 40 people and later get acquired by multi billion dollar firm and what small firm owners can steal from the genslers and the H okays of the world without selling your soul or your design integrity. In today's episode, I sit down with Ryan Mayhew, a seasoned architecture finance veteran who helped grow the Lamar Johnson collaborative from a scrappy startup to a 40 person firm that was later acquired all after nearly a decade at Gensler, now serving as a senior project accountant at H Okay, Ryan joins us to bring sharp insight into what small firms can learn from the financial playbook of the giants. Now, before we get into that, let me remind you, if you're building everyone else's dreams while yours collect dust, it's time for the smart practice method master class. This free video master class is yours as a podcast listener. It's your blueprint for eliminating overwhelm and slaying chaos as a small firm owner, it's time to stop drawing up excuses. Start designing your ideal practice today. Go to smart practice method.com to get access to this free video Now stay tuned for today's episode. This one is packed with gold. Ryan, welcome to the Business of Architecture.
Thank you for having me,
Ryan. You've seen architecture firms at every stage, from global giants like Gensler and H Okay, where you're at currently, to a scrappy startup. Shall we say, What's one thing that you find that small firm owners consistently underestimate about managing the financial side of projects?
I think on the smaller side, you know, firms, firm owners, I don't know if it's necessarily underestimating. I think it's a lot of times it can be a matter of where the focus you know, lies, you know. And a lot of times, you know, the focus is on winning projects, cool projects I want to do the work, and in not prioritizing the, you know, financial, you know, infrastructure, backbone, you know, those kind of things. So to really put good financial intelligence together. And and what I've, what I've kind of found, you know, at least among some of this, you know, the smaller firms, it can be really hard for them to even prepare, you know, good financial data on some of these things, just because it's just a matter of prioritization a lot of times. And of course, that's not speaking for all smaller firms, but I think that definitely the priority, you know, tends to be, you know, I want to win this, this cool work and, and, and work on really cool projects and, and so I think, I think, I think one of the things that can really help out. You know, small firm owners is, a lot of times what I've seen at some of the small firms. I think they could really, it would really help if they, they had somebody in house at least, kind of had a good financial accounting background, to the extent that they have that luxury. I mean, some folks are a sole proprietor, but I think a lot of times there's an overly Reliance or or lot of times they'll take a focus on, we can't afford this overhead right now. And my attitude about it is, I don't think you can afford not to have that overhead, you know. And so yes, we need the key. We need to make the key. Strategic hire of you're trying to get into a particular market, or some senior leadership at, you know, architecture, but I think that having some senior leadership on the financial end of it should be a priority as well. And I lot of times, I just don't think that is a priority for some of the smaller firms. And so it's
definitely a very tenuous poll. The desire to do the challenging, fulfilling design work, and then also making sure the numbers work, making sure that the profits coming and employees can be paid for, investments can be made. Yeah, Brian, you had a very interesting pedigree, and I'm just so glad to have you here today, because you went from a middle management position at Gensler, where you had a very stable, solid career there jumped over with someone who left Gensler to help start up a startup practice, Lamar Johnson collaborative. So you got to see being part of one the largest architectural practice in the world to being part of a startup. And I would love to hear your insights about what are some surprises that that surprised you as you because it's a very different thing, starting up a startup practice, small firm, versus being part of a large organization.
One of the biggest things that shocked me was the barrier to entry when it comes to technology and licensing cost. Yeah, I had no insight into that, given my position that I had, you know, at Gensler. And so you know, when you're when you're starting a firm, and you're building out your technology infrastructure, your Revit license, you know, Blue Beam, all these different things. I mean, it was really shocking to to see how much those things cost. And then, plus, you know, when you're a smaller firm, you don't have the leverage of certain economies of scale. So it's, it's kind of, you pay, what you pay, you know, kind of thing. And so that was, that was really a a shock. And I think another surprise, you know, for me, you know, is when you, when you work for a very large firm, you tend to, you know, sometimes you can get kind of specialized in and and just be a little humble about it, you know, I did not know a lot that I had to learn, you know, a lot of times late nights, weekends where I, you know, I started, I'm coming from, you know, Gensler and, you know, and I know this and this and this and this, But, and I did know a lot about a particular area of the business, and when you work for a startup, it's, it was just me in the accounting department from until we grew a little bit and I was able to hire somebody so you're building everything from scratch and and that can be, I mean, that can be really, You know, challenging to do, because in addition to getting your day to day job done, as you know, you're you're having to plan for the future, you know, what kind of metrics do I want to be able to see you're just basically building everything. But I do think one of the advantages that our group, we did have, was that we knew what good looked like coming from, where we we came from, so we at least kind of knew we weren't just kind of shooting blind, you know, we we we had to build it, and we were necessarily not sure how to build it. We were kind of learning along the way, but we at least knew what we were going to get, trying to get to and so, and I think that the big surprise, you know, for me, it was just, yeah, there's, there's a lot, there's a lot of hours, you know, a lot of certain challenges that come along with starting a business that I think sometimes when you work for a very large company, you just really have no idea until you experience it for yourself. And so it was quite the learning lesson.
Yeah, I can imagine the challenges of a large firm are so different from a small firm. So it's amazing that you have that incredible experience of both of them. Ryan, when you started off the interview here, you kind of mentioned that one of your recommendations is that a small firm needs to have someone a financial acumen. You mentioned that that is an essential criteria. And I'd like to ask you, why explain to us, like layman's terms, why that comes Why is that such an important recommendation from your perspective, when
you're starting from, let's say, the very beginning, you're starting you know business, you have a small business, you know that hire, or at least if you don't have the luxury of making that hire, but the willingness to learn those aspects setting up good practices at the very beginning lays the success for the future. You know, for example, if, if a smaller firm makes the wrong decision on what accounting software to use, ERP platform to use, and then you win a project in Europe, but your software doesn't have multi currency, you know, it's so much harder to make that change later, you know. But then also, while you're, you're building a new firm, you have no, there's no history of financial metrics or those kind of things. So you, you need somebody that can kind of rationalize that financial information. And to kind of, you know, measure certain progress in really, and plus just the bad, the day to day, you know, nuts and bolts of, you know, managing, you know, good books. I mean, I can say that we were able to, you know, we we produce, we were able to produce quality books from, you know, day one, when I was at the startup, the numbers didn't, admittedly, did not look pretty at first, you know, when, when we just got started, but I was one of the early employees, and they made that a priority to to understand the numbers, understanding the business side and and I think that it's and also, I think, as a firm owner, you know, I understand that that can be kind of an expensive hire. But at the same time, I think there's, there's a lot of value in, say, the firm owners, you know, time as well. You know, you need to be able to spend a lot of your time marketing projects, winning work, and everything else and and, you know, if you're managing the day to day administrative burden of the finances as well, it can be, you know, really hard to do, and, and so. And I think that having having good key financial metrics to to be able to look at and also have good historical data as you're building a firm, so you can know how to price certain projects moving forward. You can actually measure your success over time. I think it's just vital if you want to build a successful and in my opinion, a sustainable architectural practice, because without profitability, the architectural practice is not going to be sustainable and and so I think, I think that's, that's really, you know, some of the reasons why it's just, you know, vital. And then plus, I think when you're when you're also hiring new staff, you know, certain project managers, architects, those kind of things, I think it, I think it is helpful having somebody that can help educate the rest of staff as well on some of the business criteria, some of the business metrics. I know, you know, different firms have different philosophies on financial transparency. I'm a firm believer in financial transparency. I think it's key to get buy in from your employee, you know, from our employees, if we're financially transparent about the results of the company and so and I think that it is important to have somebody that can, you know, also help teach the rest of the staff, I mean, the people that are making the day to day decisions on projects, so they can kind of understand the decisions that they make, how they may affect the overall financial performance of the project.
Tell me about financial transparency. What do you mean? What would it look like to be fully financially transparent, the way that you see it's beneficial,
yeah, which, again, there's one of the great that, you know, one of the great things when you're you, when you're one of the early employees at a startup, where you can just build something. And, you know, we want to do this, and have the power to do exactly what you want to do. I mean, really financial transparency. For me, it's, it's being transparent about the overall firm's financial performance, and also on a project by project basis, and and again, you know, except every firm has, you know, a lot of firms have different philosophies around this. And I can't speak for every small firms, but I have seen, you know, some, some small firms that are just very closed off on the financial aspect of it. And I don't, I don't think that is, that is a good approach, you know, simply, if you have a project manager, and they don't have an understanding of the financial performance of the actual projects. You know, how can they actually be a sufficient project manager and so, but I also think it's important to understand, on a day to day level, how, how their work can impact the financial performance, and it also, you know, if it's trans, if the company is transparent with everybody in the company, they can understand, okay, maybe here's why my bonus wasn't what I wanted it to be. Or, you know, or we had a great year. Thank you so much. This is much better than I thought it was going to be and, and I think that, you know, one of the things that I think, you know, Gensler, you know, that's where I started my career. They're, it's not confidential. They're very open, you know, with their financials and, you know, on employees. And I think part of, part of that, you know, helps get buy in from their employees, because they can see how the financial performance impacts their own compensation and and I think that that is something that I. Don't know why a lot of firms are so hesitant to share that information. I have heard certain things that you know, where sometimes firm owners are, oh, our people don't want to be we want to people focus on design and not the numbers. You know, those kind of things. But I think sometimes that they under underestimate their staff on what they they want to know and want to learn about things and and I think it's, I just think it's very important, you know, also, because those, those folks are going to be the future leaders of the firm as well, and they're going to have to have an understanding of how to manage a profitable business, and I don't think the industry does ourselves any favors if we don't share that information.
Ryan, tell me about your current job duties. What does it entail? Give me a picture of what data do you get. What do you do with it, and where does it go to
Yeah. So, yeah, day to day. Currently, you know, I manage the earnings on a portfolio of projects, you know, certain amount of invoicing. So of course, help with cash flow. Help the project managers, you know, report accurate financial earnings, ensuring that we're not over earning or under earning. Of course, I look at a variety of financial metrics, project profitability metrics, multipliers, those kind of things. Project plans try to help identify certain trends. You know, to see okay, is, Did we do something that's out of scope? Do we need an ad service? You know, what's going on here? And so really, my current job, it's, it's, I view my current role as a customer service role to our project managers. And so, you know, I try to help them out with the administrative and financial burdens of their projects. And then, of course, also a lot of day to day interactions with clients, and, you know, ensuring that we get paid timely, and those kind of things and and
so when there is a red flag on a project, is it you that first notices it? Or what's the process for identifying that? Well, this project's going downhill. We need to step in here to avoid a major financial loss.
Yeah, I think, you know, I think my my approach, I mean, it's really a combination, you know, of several, you know, factors. I think, I think larger firms, you know, they're, they're, there's definitely more of a focus on financial performance than some of the smaller ones. So we have a variety of tools to help catch, you know, certain things. So a lot of times it's the project manager bringing something to my attention. But a lot, you know, also a lot of times accounting, you know, finance, we're bringing it to their attention as well, because we, we have access to a lot of cases, you know, real, real time financial data. And so one of the areas that I particularly like to look at is one thing the architects probably will will they'll get tired of hearing me say this, but one thing I tell our folks here a lot, it's it's easy for for me to tell you how we're currently doing, but it's much more difficult to understand where we're heading. And so one of the big focuses on project planning, and so we can kind of see, and that's, I mean, that is so helpful to have, you know, to have good financial planning on the project as well. So we can understand it's like, okay, we're doing well right now, but when we get to construction administration, we're going to have a problem based on this, you know, financial plan. So maybe we need to staff the project differently. Do we do? What's driving that? Is there a schedule extension that we need to ask for additional money for and and really that's the value of having the good business intelligence. Because a lot of times we can see those risks into the future before there are problems. You know, instead of trying to address them after the fact and and that's, that's one thing I definitely see. Can see it, you know, some of the smaller folks, I think that smaller firms that can struggle with is being reactive to problems that are proactive, you know, to them, you know, it's like, oh, we've got a problem. How are we going to well, you know, the problem happened six months ago, and, you know, and that's really another reason, you know, go back to hiring, you know, good finance person that also understands the importance of the financial tools that are available to architecture and engineering firms, and understanding the importance of project planning, and project planning is something that just constantly has to be reinforced the importance of it. And, you know, and so anything, and it's kind of hit or miss, you know, like I said, I can't speak for every single firm at the larger firms, including, you know, my current firm, you. So we do a pretty good job of those, but I know that there's some smaller ones that there's no focus on it at all. And so yeah, and I think that if you're not focusing on the planning aspect, you have no way of knowing where you're going to be at in six months.
That is such an important critical point there, Ryan, is the ability to forecast, to be able to see and Zig or zag adjust based upon the data, because we do see that so many firms, especially the small firms, are completely reactive, because they're hitting those tidal waves instead of actually seeing them six months in advance and being able to plan. So there's a couple things there that happen. Number one, they don't have the forecasting in place. They can't even see the tidal wave coming. And number two, even if they did, they don't, they lack the strategy. They don't even know what to do. So a lot of times they it's easier to put our heads in the sand than actually face the unhappy or unpleasant financial picture, because that just feels better in the moment when you were with Lamar Johnson collaborative at the beginning, what were some of the challenges that you felt yourself facing in the finance role? You mentioned high costs for tools and licensing Other than that,
cash flow. I mean the big priority, you know, day one. I mean cash flow. Admittedly, you know, we had to focus on cash flow over profitability at the very beginning. You know, of course, especially as you're trying to build a brand and a name in the marketplace there, you know, admittedly, some of the earlier projects that we had, you know, were not the big financial money makers, you know, those kind of things. So it was cash flow, cash flow, cash flow. You know, I mean eyes on the phone all the time, you know, with clients where, yes, large the larger firms, of course, cash flow, Day of sales outstanding. Those are very important metrics. We track those too, but it's a completely different ball game when you're at a startup firm. And it is the difference between maybe you making payroll or not, and and I think that I remember one of the big challenges that, you know, I had it and so because, of course, you know, I come from, you know, I came from the large firm, and I remember, you know, my first week or so, and I'm getting access to the checking account, you know, the startup firm. And I look in there, and I'm like, Oh my gosh, how do I make this work, you know. And I was like, I'm, hope I'm as smart as they think I am, you know. And, and I think that that those are obviously some of the biggest challenges. There are real, considerable financial challenges that smaller firms face, you know. However I, you know, I will go back to the to the whole thing of being like, you know, you're always going to have those challenges if you don't put in the successful steps at the very beginning. It's much easier to to put those things in place while you're small, make it part of your culture, and then as you you grow. And I think, you know, another huge challenge here was just the sheer amount of things that have to be done, and especially when your bar is a firm that's been around for decades, and the technology and everything like that. So we're, you know, we're looking at like, this is what I need, and this is, you know, this is what I have. And that stress can, you know, can be kind of overwhelming, because day to day, you may think you're failing in a reality, I think, you know, one of the steps, you know, the tools that just kind of get around that that stress is really just putting together, you know, a longer term plan and just, you know, checking in, you know, weekly on here are three things I can get done this week, and then six months from now, you look back and you're like, oh my gosh, we got a ton accomplished. Instead of focusing on, how are we going to get all this done? And when we were hiring people early on, on the project, these are folks that I these are people that I had prior professional relationships with. These were friends folks with families. They were taking a big risk leaving a very large, profitable, established firm leadership positions there. And when you're in, when you're in a leadership position, I'm sure, as you know, there's a lot of benefits to that, but one of the things that I can that can weigh on you is the you feel a responsibility to take care of your people, and that really is a stress. And so, you know, my role was helping the firm owners understand, you know, get profitability. You know, get to profitability as quickly as possible. And that's also, you know, a big it was a big motivator, but also a huge stress. You know, when you're when you feel individually responsible for the livelihoods of that those of people you care about,
yeah, that that concern is real. It's authentic. Think it's something that every business owner, I'm sure is familiar with. We don't want to lay people off. You understand that your decisions really impact people's ability to maybe get Christmas presents that year or send their kid to a private school or something like that. That really has an impact. Ryan, you mentioned a couple things that small firm owners should get into place. And I wanted to ask you, what would you you've already kind of hinted at this, and you've talked a little bit about it, but what things would you think would be essential for a small startup firm that they absolutely need to have in place if they want to be sustainable?
I think spending a lot of time putting together a good business plan, you know, so, so a lot of firms, you know, as you as you know, you know when we're doing, let's say, financial forecasting, right? You may look like, hey, what's what's in the marketing pipeline? Okay, we expect to win this amount of work. Here's the car, what our contracts are, and then from there, you're developing a forecast over time. And you know, here's what you can afford based on this forecast. You know, essentially from the top down. One of the things we did when we started, you know, the startup firm, was, yes, we did that too, because you have to, but we also kind of did a bottom up kind of forecast where we were deciding, here's what we want to be able to pay people. You know, our priority was taking good care of our people, providing good benefits, providing good bonuses. Some things that we did that not a lot of architecture firms do. We paid overtime for architects that made under a certain threshold on the salary, right? So these are benefits that cost a considerable amount of money. So from there, we would have our cost, we would know what our cost is going to be over time. And then we were like, Okay, we have to make this amount of money in order to have this baseline of benefits pay and everything else for our people. And the reason I say that that's kind of a it is different than, I think, what a lot of firms will do and but one thing I think is important is because, as you're making business decisions, okay, let's go after this project. Are we going to undercut this firm, you know, lower our fees, or whatever, you know, the the reality is like, if you know what the consequences of some of the maybe not so great business decisions that are made, you kind of think twice about making them. And I think that's that was one of the difference, you know, you know, it's like so understanding what kind of firm that you want to be and then putting together a plan of how you get there. I mean, one thing that, you know, I tell folks, you know, in the industry is one of the most compassionate things that we can do for our people, is to run a successful and financially profitable business, because that's ultimately how we take care of our people. And and I think a lot of architecture firms, you know, may may talk a good game you know about, you know, some of this stuff, but the route is, it comes down. It really does come down to the numbers. That's how we pay for everything. And I think that when you have the flexibility to build a budget like that, where you say, here's our goals, here's how I want to treat our people. I want us to be best in class on how we compensate our people. I want I don't. I don't want to worry about turnover. I want to be able to pay folks, well, maybe I want to give, you know, an employee ownership stake. And, and then, yes, and then from there, you decide, okay, here's what we have to make profitability. Here's how much revenue we have to bring in. Here's the, you know, here's the amount of projects we have to win, and, and that sets, that sets the goal, and and then you also have a clear understanding of what the consequences are if either you don't hit that goal or maybe you decide to pivot and, you know, to a different direction. You know, it's like, okay, if we bid after this job that we're going to spend a quarter of million dollars marketing, and we have 10% chance of winning it if we don't win it, the consequences we can't pay out our profit, profit sharing this year, and really understanding what that is, I just think it really does help to make good, better business decisions.
Ryan, what have you seen put into place to where people don't feel like the attention of finances is the stern father mother, it's the tyrannical top down. You got to make these numbers. How do you get around that feeling that people may experience of resistance or feeling like they're not measuring up when there is such a strong structure in place? What have you seen effective to encourage high morale while at the same time high accountability?
Yeah. Well, I think it's at some firms, there seems to be an attitude and, and I don't know why that is obviously, because I'm an accounting and finance person, but there seems to be an attitude in the architect architecture industry as a whole, that they equate, you know, the. Good design is being less profitable, right? It's like, if you want to achieve the highest levels of design, you know, you can't focus on, you know, profitability. And admittedly, sometimes at the smaller firms, the larger firms can be a little demonized, a little bit because of that. And I've never bought that. I have never agreed with that at all, you know. And, and I think that so, so, to your point, there is a natural resistance that, you know, a little bit there. But I also think that this is where I think the the financial transparency Does, does help and play a role, like where you know if, if we make financial performance part of the firm's culture then and we're transparent about the results, then folks on an individual level can see how their compensation, you know, comes accordingly. And it doesn't mean that you're producing bad work, you know, I mean different project types are naturally going to have different profit margins, but, and I think that, but I also think, you know, some of that resistance, you know, can just, can come from a place like where, you know, see this law when it comes to, you know, finance, you know, people, maybe a Little bit of antagonistic role between architects and finance executive executives at time. But I think that my approach was that is that's always been my entire motivation, because I love this industry, but my entire motivation is, at the end of the year, I want to be able to pay our folks as much money as we can provide a good bonuses and continue paying good benefits. That's why I drive home, you know, these things. And I think that if you're employed, if the, if you're the people that that that work at the firm, they believe that about you, I think there's going to, there's definitely going to be more, more buy in. And it's also also like, you know, an education, you know, aspect, because I think, as a finance person, part of the job should also be to help architects understand that there's a real financial value to the services that you provide. You know, sometimes there's a hesitation talking about money or different things like this and so and and ultimately, I spent a lot of time educating, you know, the architects, you know, on these particular things. And I think if folks understand that how this ultimately impacts the financial performance, and then also helps benefit them in their careers, I think that also helps get some buy in, but a lot of it just also has to do with trust as well. Do Do they trust the leadership and and because it doesn't have to be an antagonistic relationship, I think, I think finance and the architects, it can be more of a partnership kind of thing. Ryan,
in your opinion, what are the top three strategies or things that small firm owners should adopt based upon the practices of large firms,
that's a good question. Making financial performance part of the culture of the firm, you know, at least an understanding of what the numbers are. Also, I think it's important for this, you know, a small firm, especially when you're starting out to to to identify what your brand is and be, you know, have a consistent, you know, brand. I mean, the larger firms are very consistent about, you know, managing their brand and and I think that especially early on in the process, it can be difficult to identify what that ultimate brand is going to be for your firm, or what your area of specialty is going to be, and, and I know it's going to, you know, send cheesy, but it's also also, you know, when you work for a smaller company, you know, especially a startup architecture firm, the reality is, there's likely going to be a lot of hours involved. So if you tend to hire people, of course, you're hiring them for their areas of expertise, but you also kind of have to hire for certain, you know, culture fit, because you're going to be spending so much time, you know, like with them. You know, one of the things that I really one of the things that I really think that made Lamar Johnson collaborative successful, as successful, as quickly as we were. I mean, we hired good people, but we all just we genuinely liked each other, you know, we were all kind of like rowing in the direction. You know, we definitely didn't make that leap for money and and I think that you especially when you're in a startup space, trying to cramped little space, and you're spending that much time, you know, I mean, you really have to, like the people that you work with and, and have, you know, a lot of the same, you know, goals and, and I think that's, I mean, that really is, you know, key. I you know, when you're spending that much time, you know, with people and and I think that, you know, but, but really, I mean, some of the other practices, you know, of large, of large architecture firms, like a focus on the forecasting piece of it, it's so it's so important, and it's, admittedly, it's not an exact science. It can be kind of hard, but, but one piece of advice I will give smaller firms, you know, little bit when it comes to the forecasting piece is, you know, you have to, you know, like larger firms, for example, if you're forecasting, we may discount fees a little bit. Okay, we think that we're going to win this. So maybe we discount A probably by a probability of like, 50% Well, when you're a small firm, I don't necessarily agree with the discounting method, because if you've got, if you put in a proposal for a million dollar project, it's either 100% or zero. You know, it's like when you have it, when you're a small firm, you know that can be the difference between you staying in business or not, right and and I think that, you know, the forecasting piece is, it's so important, and I think that's also, I think it kind of helps to have a good a person with a good financial, financially minded person to be kind of a check and balance when it comes To that forecasting piece. Because I think, admittedly, sometimes the design directors and architects, you know, can be overly optimistic about a forecast. And in fairness, finance people like me are overly pessimistic about forecast. And inevitably, some what ended up happening is somewhere in the middle and so, and I think the forecasting piece is just, it's vital, I think, to a successful practice. And it's, I think, the hardest part to really ingrain in part of the culture of a company, and part of it, you know, you have to have good tools, but you also just have to understand the data
that you're looking at, very, very solid advice. And Ryan, I do have a follow up question. You mentioned branding was your number two? I got asked this question because our listeners probably are too a lot of times small firm practitioners. What we find is a lot of times people think about branding is logo the way your business cards look, the way your website looks, but branding is so much more expansive than that. I like to understand from your perspective, why you chose that as number two. And for you, what does brand actually mean for a firm? And then we'll wrap there. Well,
you know, obviously I'm speaking, you know, you know, as a finance person, but you know, another one of the great things about working for, you know, for a small company, when you was building things, you're involved in all kinds of different aspects. And I think you know to be to your point, yes, part of it is, what, what is your logo going to be? What's, what's your your color, it's going to be, your font, going to be those kind of things. But I think your, your your ultimate brand is, is going to be, what? What is, what is your firm known for? Like, what? What is your special sauce? Essentially, I know that that word is kind of overused a little bit, and in being consistent, you know, you know with that, it's like, okay, where, what is your firm going to be known for? Are you going to be, you know, experts in this particular marketplace where, you know, where clients will just continue to come, come back to you for that particular work. And there's nothing wrong with being the absolute best in a particular small area, or, just like there's nothing wrong with doing it all. But I think it's, it's, you really have to understand what your core competencies are and double down on it. You know, I really think that it's, it's better to be experts in a handful of areas than average in a bunch of them. And I think, you know, being able to market yourself as those subject matter experts really can help your your business, because lots of times you're not spending time marketing, you know, and and just being consistent with that, that message. And also, you know, having leadership that goes out and gets out in the public. You know, various conferences, you know, speaking, you know, events that helps, you know, get your firm's name out there, and your employees and partners as these are the subject matter experts. You know, I know that there's, there's a variety of firms out there, you know, depending on the project type that, you know, if it's a hospital project, for example, there's a high likelihood it's going to go to one of five firms because and they've earned that kind of reputation and so, and I think that that's that's a big, big part of
it. Thank you, Ryan. Ryan, today we've been joined by Ryan Mayhew. He's currently working as a senior project account at HOK. K out of the Washington DC office. Ryan, thank you for deciding to come back and give back to the podcast.
All right, no problem. Thank you for having me appreciate it. And
here is today's Smart practice, tool tip. Architect nation. Here's a financial truth bomb. Most architecture firms are collecting just 60 to 70% of what they could be earning on every project. Now I know you may not care about money, but if you do, I can guarantee you're doing the work, you're bearing the stress, you're carrying the liability, but possibly leaving a quarter million dollars or more on the table annually without even knowing it. Would that be important to find out. That's why we developed the smart practice, revenue capacity planner tool. It's a 30 minute financial checkup that shows you exactly how much money your firm could be earning right now, so you can compare it with what your current performance is. Get this smart practice tool 100% free by going to business of architecture.com forward slash capacity and thank you to our recent listeners who left reviews for the podcast on iTunes. Your reviews help others find this podcast so that the rising tide raises all boats to be acknowledged on the show. Open up the app on your iPhone, search for Business of Architecture, and after clicking on the show, scroll all the way to the bottom to leave a review. Today's episode of The Business of Architecture show is sponsored by Smart practice, the world's leading step by step solution for small firm owners that want to structure their existing practice so the complexity of business doesn't get in the way of the architecture. Quit doing it the old way. Because you see, it likely isn't your architecture skills that are holding you back. It may be all those business aspects of running a practice, managing projects and people, creating invoices, chasing late payments, dealing with clients, contractors and money. So if you're ready to stop being a glorified administrator and get back to the architecture you love again, go to smart practice method.com and discover the proven simple and easy to implement smart practice method that is revolutionizing firm management for owners and teams. And as always, I would like to thank you for joining us today and remind you that the views expressed on this show by our guests do not represent those of the host, and we make no representation, promise, guarantee, pledge, warranty, contract, bond or commitment, except to help you conquer the world. Carpe Diem, you.
