One of the biggest problems I’m hearing right now from the architects I work with is that they're being forced to massively under-quote to have any chance of winning business.
For example, I spoke to a Partner in a small practice the other day who told me that even though he'd recently quoted just half of what he normally would, he'd still lost out because someone else had quoted even less!
Now, if you’re familiar with our work with CMAP, you’ll know that we continually talk about growing your profits by banishing the Evil Twins, namely under-quoting and over-delivering.
So, the big question is…
What do you do when you’re forced to under-quote?
The answer is to focus on the area you can control. You need to focus your energy on eradicating over-delivery.
The good news is, there’s usually massive potential for improvement in this area alone for most practices.
Why? Because, quite frankly, most architects are guilty of horrendous over-delivering!
Let me give you an example of what I mean…
You ask one of your architects (let’s call him Mike) to work up some sketches for a new scheme. Mike spends 5 days working up some great sketches. Problem is, you only quoted 2 days. Congratulations, you’ve just lost money.
The real problem is that this kind of over-delivery can (and often does) happen on almost every task in a project.
Pretty soon, your £25,000 project has actually cost you £45,000-worth of time and you’ve made zero profit.
Even worse, because no-one is monitoring this it passes by un-noticed and exactly the same thing happens on the next project, and the next one, and the next one…
The reality is, if you can eradicate the rampant over-delivery in your practice, your profits will improve dramatically – even if you are being forced to under-quote.
One of the key elements of the work we do with our clients is to focus and minimising over-delivery as much as possible. In most – if not all – of the companies we work with, this is the #1 area for rapid profit growth, so I strongly suggest you give is serious consideration.
Have a great day!