Your Future and The No Profit Zone

September 15, 2003 · by James P. Cramer

Profit is not an accident; it is an essential ingredient of a high quality professional practice. It is part of what enables you to do your best for your clients.

For many design professionals, the financial aspects of the profession are viewed as a necessary evil, something that gets in the way of producing quality design. It is precisely because of this attitude that some design firms find themselves in chronic financial difficulty, unable to pay competitive salaries and bonuses, provide important staff training, or acquire the most advanced technology to improve their productivity.

Surprisingly, this phenomenon is not so much related to skill as it is to attitude. Now, in 2003, many design firms are finding profitability even more difficult. Profitability, like good engineering, should be designed into a project at the very beginning, and it begins with the basic position that design is a value-added enterprise. The current economy is not a good excuse to sacrifice profits unless in those rare cases that it serves a larger and very short-term business strategy.

Next time you are involved in a fee negotiation with a client, ask yourself the following simple questions:

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When negotiating with the client, remember that asking is the first rule in receiving; there must be enough of a fee on the table to produce the quality results that the client seeks.

Profits are important because they are necessary to support the design mission of the firm. Just breaking even is an inevitable ticket to oblivion; profits are needed to regenerate the future of the firm.

Planning for profit is no different in concept from planning for space or engineering requirements—it needs to be designed into the project at the outset as a clear expectation. Profit is not an accident; it is an essential ingredient of a high quality professional practice. It is part of what enables you to do your best for your clients. During a soft period in your firm’s own economy, don’t get talked into the “no profit zone.”

—James P. Cramer

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