New to the Xero Ecosystem
There are 150 architects in the room On the big screen in front of them is a simplified annual income statement and a summary of timesheet data for an imaginary 3 person architectural practice. The room is asked a simple question: “how much does 1 hour of the partner’s time cost?”
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Simon Berry, Founder, Fresh Projects Fresh Projects was started by Simon Berry, who while working as a Commercial Director for a large consulting engineering firm was unable to find a simple software solution that could answer the 3 key questions : 1) Which projects are making money? 2) Which clients should we work for? and 3) Are employees working effectively? Simon is a Chartered Electrical Engineer, holds a Cambridge MBA and has worked in the construction industry for 20 years. His passion has always been using technology to remove inefficiencies in the industry.
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hat should be a 5 minute exercise takes the room, working in teams, over 30 minutes. The event has been organised by Business of Architecture UK. There are expert guest speakers - come to impart their wisdom on running a financially sustainable practice. Even the experts are struggling. Eventually all the answers are submitted. The teams are also asked to provide a level of confidence in their answer. Their answers are plotted on the big screen (see Fig. 1).
Fig. 1
The results are staggering. This is a room full of professionals, who have each spent 7 years at
university and many of whom now run their own practices. They were given exactly the same financial data, yet the answers range from £5 per hour to £90 per hour. Even more worrying is that over 80% of the answers undercost their time,
most by more than half! The exercise has been run by Fresh Projects in collaboration with the Business of Architecture UK. They are on a joint mission to educate architects on the fundamentals of running a business - skills that most architects and engineers will admit they don’t typically have. Creative professionals are typically motivated by creating, designing and problem-solving - and often ignore the financial fundamentals that underpin any business. Architects and engineers are forever bemoaning the fact that their services are undervalued and their fees too low - yet, as the above exercise showed, they are typically unequipped to determine and manage their fees correctly in the first place. The size profile of engineering
50 / Issue 21
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