Want to understand, measure and grow the performance of your Architecture Business?
Below are some of the recommended KPIs (Key Performance Indicators) for the most successful Architecture Businesses. With these KPI’s you should be able to get an overview of your businesses current financial performance.
- Overhead Rate
Your overhead rate takes into account costs like paying rent, software costs, telephones, stationery etc. How much are you charging for your services compared to how much the services are costing you to produce? This is an important thing to understand in your business for it to be successful and sustainable.
- Pending Proposals
Sort out any opportunities for jobs and separate them into prospect jobs (Likely to get the job) and cold jobs (Unlikely to get the job). Add these together and compare them to the budgeted revenue for your business for that year. If your business is on track the number compared to your budget that you should see will be almost 3x higher.
- Backlog Value
Do you have a lot of work on the go that still hasn’t been billed? Frequently monitoring the backlog of work on the go vs work not billed will give you the backlog value which you can use to measure the value of work you are doing right now.
A good target value to keep in mind might be equal to or greater than your annual net operating revenue.
- Net Revenue Per Employee
This is to measure the past performance of your company not a way to single out employees but to judge how your business is growing. You may have a higher number of people in your team and expect this might mean earning a higher profit but does it?
Calculate if your net revenue is up or down using this formula:
Annual Net Income / Number of people in your Team
Want to learn more about KPI’s in your Business? Contact me today for quality, professional advice.
By: Anthony Raykos | Associate Director of Tax and Accounting
T: (08) 6165 4000