I prefer to collect as much information as possible before making plans and decisions. Most engineers are data fiends when it comes to their technical projects. I was surprised then when I started asking around about how to focus my business development efforts. Many offered platitudes and anecdotes but little hard data.
With help from our accountant, I took it upon myself to mine information from the project setup sheets that we fill out at the beginning of every project. This form includes information about the type of project, market sector, client, and how the project was won. All items are self identified, so how or why the project was actually won is a bit of a guess. Importantly, we also include the fee in the setup form; this alerts accounting and collections to the pending revenue. I’ve been filling out these setup forms for years but had never previously revisited the data.
The information was provided to me in the form of a huge spreadsheet. Each project was given a separate row. There was a column for all the data points: fee, market sector, engineering service, client type, and reason for winning. I decided to use pivot tables to re-organize the data in a format that I could draw conclusions from. I typically tried to chart the summation of fees defined by two criteria. For example, I could identify the sum of fees for different types of clients and represent that in a chart with the client type and fee summation side-by-side. Absolute value didn’t mean much, so I computed relative percentages on the basis of my total billings. The data was limited to my projects over the last two years, because prior to that I was working under many other project managers.
First up, market sectors. 95% of my projects occur in four sectors: commercial (27%), cultural/institutional (32%), education (31%), and government (5%). It may be that my boss has been selectively assigning projects in these market sectors. Whether coincidental or planned, this is interesting, because it shows where I’m developing some expertise. I could focus business development with clients who also work in these areas and emphasize my burgeoning experience.
When it comes to engineering services, 86% of my billings are in alteration/rehabilitation (65%) and new design (21%). Feasibility studies and investigation are a distant third and fourth at 4% each. My group focuses on rehab and investigation, so it’s notable that my projects swing to one end of that spectrum. This is by design, because I have expressed my interest in design projects over investigation to my boss. Again this allows me to focus my business development energies in my interest areas.
The most interesting results came from a comparison of reasons for winning projects. Relationships dominated as the reason with 65%. Qualifications (16%), ability to offer multiple services (11%) and fee (2%) rounded out the list. This drives home how important it is to maintain relationships. There’s a good chance that many of these jobs are return business, another reason to always do good work.
I was surprised, however, that the other three listed items came up so short. I typically list qualifications as the reason for winning when we get a cold call and prepare a detailed qualifications package. I’m disappointed that we’re not winning more of those projects. This makes me want to research how to make more convincing qualification submissions. We also need to do a better job advertising the multiple services our company offers; this is a major emphasis of the company. Finally, it is clear that we are not typically low bidders. I’m not very concerned about this outcome, because I want to stake my reputation on providing the best possible service instead of being cheap. Though, perhaps it’s possible to review our fee on some services to see if lower fees could lead to greater volume and revenue, so that’s some more homework.
Though this was just a limited data set, I learned some pretty interesting things about my projects. Hopefully, this will help me prioritize business development activities. To potential clients, if you have a cultural/institutional rehabilitation project and value a strong relationship with your consultants, give me a call. We’re a great match.
Have you done similar studies for your business? What other data points would help me grow my practice? What other conclusions would you draw from this data? Leave your comments below.