Your Business is Only as Solid as Your Financials What Drives Profitability? There’s a number of factors that drive profitability for Architects, Engineers and Design (AED) businesses—particularly in today’s competitive environment. Even so, many businesses have set record profit levels in the past several years. How have they achieved this? Firstly, they have not spread their attention across the many components of the business that may affect performance. And secondly; they have had a clear and concise focus on the Financial Management of their businesses. Though notably, more pragmatic challenges in the existing environment can make this key area of any business difficult to address. The Financial Management Challenge Many AED businesses build their own systems or adapt to what they have been exposed to in the past. It’s rare for the leaders to be exposed to great business and financial management before establishing their own businesses. Not only that, we are in an environment of reducing fees for service. It’s goes without saying that winning work with low fees places significant pressure on profitability, quality, and cash flows—and ultimately on the “brand”. As a consequence, strong and effective financial control and management systems are becoming increasingly important. The ability to understand a company from financial statements is one of the primary differences between small and large businesses. Where and how will you attain this capability?
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