The problem is that those scribbled words in a yearbook were the last interaction I had with many of those classmates. Let’s face it – without the regular exposure to others that a classroom setting brings, the likelihood that I’m going to pick up the phone and start calling all of my old classmates for the sole purpose of keeping in touch is pretty slim. Enter the Internet and Social Networking.

Facebook, MySpace, LinkedIn, Twitter, email, IM, SMS… so many options these days for keeping in touch. It’s amazing how many old high school and college friends that I’ve reconnected with on Facebook. From a business standpoint, these tools have become a lifeline between me and my professional network. Nowadays, when you get an email from me, you also get a link to my Twitter and LinkedIn profiles. If I were to write in your yearbook today, instead of “K.I.T.” I would probably write “@ajwhitaker” or maybe “FB-Engipreneur.”

What’s remarkable is how many people in business fail to take advantage of these low cost tools that make staying connected with your network so easy. Last week, I heard of a position opening for which a former colleague of mine would be perfect. I knew she was out of work and looking for another job, however, when I went to check out her profile on LinkedIn, it still listed her as working at her old job with no current contact information. I spent the better part of two hours trying to hunt her down!

C’mon people! There is information about you on the Internet, whether you like it or not. Why not be proactive and take control of what impression you’re making with your online presence? Why not use this “modern yearbook” to your advantage? -Stay cool and K.I.T.!

Survival mode is great when your primary goal is, well, survival. But, survival mode is no way to run an organization long term, much less grow that organization into a sustainable, thriving enterprise. A person can only tread water for so long before they eventually sink. Growth and continual improvement is not just a nice goal for a business; in the information age, it is essential!

Building a top notch organization means moving beyond mere survival and spending time developing systems that facilitate smart, strategic growth. What better time to develop these systems than during a down cycle? As people are added to the team over time, they are equipped with the right tools from the start.

This week, I was asked by one of my architectural colleages to provide a budget for a potential new project. I get at least a couple of these requests each week which is, of course, a very good thing. The problem is that I usually spend an unecessary amount of time and effort essentially creating these from scratch – only to produce a budget that could easily be standardized based on some well-defined criteria.

So this time, I resisted the urge to reinvent the wheel yet again and forced myself to spend a couple of hours creating an interactive spreadsheet that automatically generates a budget statement based on some simple user input. It’s pretty slick, if I do say so myself. Turn on the check boxes for the scope items that need to be included. Answer a few basic questions (region, site acreage, building area, etc.). A basic fee is then calculated from the selected scope items and an adjustment factor is applied based on the other user input.

The result of this extra effort to create a useful system is a more consistent product that can be used by the whole team to generate accurate budgets in a fraction of the time.

Imagine the impact of implementing one new system each week for the next year – systems that increase productivity, automate repetitive tasks, and help us produce more consistent results.

Why bother?

It’s not about creating another tedious form, or learning new software, or implementing checklists that never get used. It’s about arming ourselves with the tools that give us a significant strategic advantage in the marketplace.

What systems are you working on to move your team beyond survival?

Photos courtesy Site Design Studio, Inc. All rights reserved.

So, put away your HP48-GX, break out your kid’s solar-powered 16-botton calculator, and let’s do some math.

Don’t worry – we’re only going to deal with three simple numbers. They are as follows:

Without proper financial planning, many firms make the mistake of letting their profits float. In other words, they get the work, they do the work, and they pray that there is money left over after all of the bills have been paid. Profit becomes the unknown variable. To express this approach mathematically,

Profit = Income – Expenses

Those firms that pride themselves at being a bit more financially astute, actually set profit goals. They subsequently focus on negotiating for fees that are sufficiently high to cover expenses and meet those profit goals. Basically, they add profit to expenses in order to determine what their income must be.

Income = Expenses + Profit

Unfortunately, both approaches are misguided. The problem lies in the assumption that expenses are pretty much fixed and that our fees are not dictated by the market that we serve. A better way to look at it would be

Expenses = Income - Profit

This approach has some interesting ramifications when we recognize that we have far less control over our fees than we would like to admit.  As engineers, we pride ourselves in providing a high level of value to our clients and are, therefore, able to justify maintaining a certain price range for our services. However, like it or not, we’re still participants in a free market system. As demand for our services decreases while, coincidentally, the number of competitors increase (what do you think those engineers that you laid off are doing?), the level of fees that we are able to secure will also go down. Of course, the opposite occurs when demand for our services goes up.

Since profit is essentially fixed based on our financial goals and fees are largely dictated by the market, this last approach tells us that we must focus on controlling expenses. We’re not just talking about laying people off and conserving paper clips (although such measures may be in order). Rather, we must look seriously at the time, effort, and expense associated with the technical part of what we do. Perhaps, there is a more efficient, streamlined method of preparing drainage studies that hasn’t been discovered yet because we’ve been too focused on demanding higher fees and doing what we’ve always done. Innovation and creativity are at the core of effective financial planning.

I was in school when our profession made the painful, awkward transition from manual drafting to CAD. It’s never an easy thing to abandon old ways and embrace such a dramatic change in methodology. But, somewhere along the line, I suspect that someone envisioned a better, more efficient way of generating plans on a computer, rather than on a drafting board. I suspect that someone did the math.

“Why aren’t they buying?” I asked.

“They say it’s more than they were expecting to pay and I think they’re talking to other surveyors, shopping around for a better price.”

“Who is they?” I continued to pry.

“It seems like most of them are women in their fifties who own a home, are constructing a fence, and want to know where their property lines are located,” he replied without hesitation.

I was amazed. “Wow! You really know your customers! Now, we just need to figure out what compels them to purchase surveying services.”

Without even realizing it, George had already taken a huge step towards refining his sales approach – he had identified, very specifically, his target customer and what their needs were. I’m going to go out on a limb here and say that the marketing message that causes a female homeowner in her 50’s to want to purchase a boundary survey is different than that of a contractor needing construction staking.

Too often, we make assumptions about our customers that are based on our feelings rather than real data. By looking closely at the statistics that characterize our typical customer or prospect, we can tailor a message that is much more likely to win their business. Age. Sex. Profession. Interests. Hobbies. Nothing is off limits when it comes to figuring out what makes them tick.

As technical professionals with a passion for what we do, it is tempting to assume our customers’ interests and hot buttons are aligned with our own. So, we usually end up marketing our services as if we’re selling to other engineers. Just look at the web sites of your competition (or your own, if you’re brave). How many of them say something about using the latest in design technology or boast about innovative solutions? Does your target customer really give a rip? It’s likely that they are more concerned with how, specifically, you’re going to save them money and time rather than what version of CAD software you’re using.

For George, tailoring a compelling sales message to an audience of women homeowners in their fifties required some serious re-evaluation of his sales approach. This customer was more accustomed to dealing with plumbers and gardeners and really had no appreciation for the value that a good land surveyor could provide. George needed to convince his prospects that they should make an investment in locating their property corners that, in some cases, would cost more than the fence they wanted to build. Not an easy task by any means, but certainly more productive than crafting a vague sales message to a general audience.

Before you waste a lot of brain power guessing at what your future customers need to hear in order to make a purchase decision, spend some time getting to know who your customers are. Talk to them. Ask them questions. The answers may surprise you. Or maybe they’ll tell you that their primary concern in hiring an engineer is whether or not you’re using the latest technology…yeah, right.

For many of those who are fortunate enough to have jobs in this depressed economy, the temptation to moonlight has become a serious consideration in recent months. For some, it has become a matter of economic survival as wages and hours are cut, yet the monthly bills keep piling up. One must be careful, though, not to jeopardize their day job or engage in inappropriate behavior that violates the standards of professional ethics. Here are some guidelines that I share with people who are considering moonlighting:

• Don’t compete with your employer. Unless you plan on quitting your day job and going into business for yourself full-time, do not offer the same services to the same target market as your primary employer. This represents a clear conflict of interest and can only lead to trouble. The safest bet is to pursue something totally different.
• Don’t let moonlighting interfere with your day job. If you’re falling asleep at your desk because your second job is depriving you of sleep, it’s time to cut back. Your employer should not be put in the position of financing your after-hours activities via your lower level of on-the-job productivity.
• Be honest with your employer. Granted, not all bosses will react favorably to their employees doing work on the side; Concerns about the two items previously discussed are to be expected. However, I generally find that it’s better to be open about it rather than sneaking around as if you have something to hide. A reasonable employer should be understanding, provided you can demonstrate that it will not have an adverse effect on your work. If an employee’s hours are cut, it is natural to expect that one would seek to replace that lost income. I have found that those who have experience running their own small business on the side can actually make better employees. They tend to be more resourceful, creative, and entrepreneurial – all good things for a progressive organization! On the other hand, I once let an employee go when I found out that he was pursuing another career path at night – his position required a significant amount of on-the-job training and I wasn’t willing to make that investment if he wasn’t committed to it.

The key to remember when considering a moonlighting gig is that your primary employer is still your primary employer. As long as you have a job, be respectful of that relationship and avoid practices that put you at odds with the company for which you work…or be prepared to part ways.

In the case of my friend, I advised him that it was not good form to take on side work from an existing client of his employer, even if that client was not happy with the service received. The best scenario would be to work on addressing the problem that’s making the client unhappy in the first place. This way, everyone wins. If, however, the circumstances are the function of a poorly run operation, it may be time to punt and move on. In any case, avoid burning bridges with current and ex-employers; It’s amazing how those relationships have a tendency to weave their way back into your career path time and time again.

When someone goes into business, choosing the right business structure is an important decision that impacts one’s exposure to liability and how taxes are paid, among other things. Therefore, it’s good to at least have a general understanding of the options available. The following are the most common types of business structures:

• Sole Proprietor. When you start a business, you’re a sole proprietor by default. In such a scenario, there is really no distinction between you and your business. Business income is taxed on your personal tax return. If a lawsuit is filed against the business, your personal assets are at risk. A sole proprietorship may be an acceptable option if your business stays small, engages in zero risk activities, and you have no significant personal assets to lose (house, car, savings, etc.). Hopefully, this is not you. 
• Partnership. A partnership is just like a sole proprietorship, only now the personal assets of two or more people are on the line. Yikes!
• Limited Liability Company.LLC’s are a terrific option for most businesses. They’re easy to setup and they protect the business owner’s personal assets from claims brought against the business. Like a sole proprietorship, taxes are paid through the owner’s personal tax return. Only problem is that professional service businesses, such as consulting engineering, cannot file as an LLC (at least in my home state of California). 
• Limited Liability Partnership. Same as an LLC, except ownership is shared by two or more people.
• C Corporation.Also known as a regular corporation, this is generally the realm of big business. A clear distinction is made between business assets and the personal assets of shareholders from a liability standpoint. Corporate taxes must be paid for the business as an independent entity on any earned profits, usually at a high tax rate. This corporate structure accommodates ownership transfer through the issuance of shares in the business. Corporations are a bit more complicated than LLC’s and LLP’s in that they require a greater amount of documentation, procedures, and record keeping.
• S Corporation. I generally recommend that smaller businesses file as an S Corporation. While similar to a regular corporation, a main distinction is that the corporation is treated like a partnership or LLC for tax purposes. Articles of incorporation must still be filed with the State and other restrictions apply when it comes to the distribution of profit amongst shareholders. In general, though, incorporating is fairly simple and involves a few easy steps. You can hire a lawyer or other professional to help you through the process but plan on dishing out $1,000 or more for their time. As an alternative, there are some great online sites that can help you through the process for less than $300 – check out bizfilings.com or legalzoom.com.

There is certainly a lot more information that one needs to know before taking the steps to incorporate their business. Nolo.com is a great resource for educating yourself on this topic.  Remaining selectively ignorant on the subject is generally not the best course of action and can leave your business exposed to some serious liability. The good news is that there are options available that are fairly easy to pursue. As we have learned in the engineering business during this downturn, technical expertise and effective project management are not enough to prevent legal claims from being brought against us. Having the right business structure in place is a smart way to help you sleep better at night.

I once told a young engineer (while handing him a technical report bleeding in red ink), “They say that, given enough time, a room full of monkeys with typewriters will eventually reproduce the entire written works of Shakespeare. This paper: 2 monkeys, 10 minutes.” This guy had just graduated from one of the premier technical colleges in the nation, yet somehow basic grammar had failed to register as a prerequisite to entering the real world. It’s bad enough when our interoffice correspondence and technical writing lapses into caveman-speak, but allowing such gibberish to find its way into our business development communications is a sin of the highest magnitude. The following is an actual message that I received this week from a surveyor trying to win my business:

Dear Mr. Whitaker,

We would like to THANK YOU for all your hard work and dedication,

Every company would be glad to have a person like you in their Staff,

Your friends and relatives should be proud of your performance.

WARE MALCOMB could not be at this level of success without your great contribution to the company.

We hope that you and your company will continue in the same direction.

We at Smart Land Surveying would like to use this opportunity to offer our Land Survey Services again

In any way to help you to reach your goals and targets,

All our experienced Staff is ready at your command when you need it–and at a very competitive rate.

We do not give up resources to give you a great quality.

Thank you so much in advance.

First of all, just so you don’t think I’m being facetiously cruel, that’s the actual name of the company – Smart Land Surveying – I didn’t make it up. I’ve never spoken with this guy; but to be fair, I suspect that there is a language barrier here and that his message is the victim of a poor translation. I understand that some things simply don’t translate into English very well – Business names like “Happy Joy Sushi” come to mind. HOWEVER, there is no acceptable excuse for poor grammar within the context of professional written business correspondence. Run a grammar-check. Use a dictionary or a thesaurus. Pay someone else to write it for you. Just don’t tell me how great your services are until you’ve learned the correct use of paragraphs and periods!

Does anyone else out there in the blogosphere find this trend disturbing? Send me your examples of bad professional writing. I’ll post the worst ones on the Wall of Shame.

Lesson learned: Buy jewelry.

We all make mistakes. Fortunately, we as intelligent thinking humans have the ability to learn from our mistakes and use the lessons learned to propel us to future success. While it is always painful to go through the process of dealing with our mistakes, it is that pain that makes the strongest impression on our subconscious and ultimately helps us make better decisions.

Some people equate making mistakes with failure. As a result, they play it safe, avoiding risk and rarely moving outside their comfort zone. Their fear of failure limits their growth potential and prevents them from learning many of life’s lessons that only come through making plenty of mistakes. While they may avoid some of the pain that mistakes inevitably bring, they tend to lead boring, unfulfilled lives and fall miserably short of their full potential.

So making mistakes is actually a good thing – as long as we see them as opportunities to learn and grow. I made a big one last week when I inadvertently hit ‘Reply All’ on an email response to a client that I intended to be private. I’ll admit that it was difficult to see the benefit of this mistake as I endured the awkwardness of explaining myself to the list of unintended recipients. In hindsight, however, I have learned a valuable lesson in email etiquette and thinking twice before hitting the send button.

So what are you waiting for? Get out there and make more mistakes!

As I sit in my garage writing this, the thousand-dollar cat is doing her best to get my attention. Which reminds me – I have an anniversary coming up. Better head to the jewelry store soon.

Despite how it sounds, this is not a gripe session about how engineers need to start demanding higher salaries from their employers and higher fees from their clients. On the contrary, I believe that the market dictates such things based on the value that we bring to the table. In fact, many engineers are probably overpaid relative to the value of their contributions. What does concern me is the complacency that seems to permeate our practice. As a field grounded in the practical application of scientific principles, we have lost focus on the important role that creativity and innovation can play in our advancement, both personally and as a profession.

As innovative contributions wane, so does the value of our services. Think about it: when the product or service that I offer is no better or worse than the guy down the street, what compelling reason would you have to buy from me apart from price? So naturally, I cut my fees, freeze or reduce the salaries of my staff, and then read about the lousy pay of my peers in next month’s trade magazine. The best way to break free of this cycle is to step back and take a fresh view of how I do what I do. “The way we’ve always done it” doesn’t cut it anymore. It’s time to get out of the rut and start thinking creatively.

This is the part where I give you a 5-step plan on how to “think outside the box,” right? Well, that would sort of defeat the purpose. You will need to figure this out on your own – to get creative about getting creative and do what works best for you.

I will leave you with one piece of advice: keep an open mind and stop shutting out new ideas simply because they don’t conform with your traditional notions of how things should work. Several months ago, I was presented with a new design software application that I felt posed a serious threat to the integrity of an engineer’s independent judgement. Though my inclination was to reject this new technology outright, I spent the next several months looking at it from every angle, intrigued by the potential it had to add tremendous value to the design process. This week, my firm made a sizable investment in this revolutionary technology that the vast majority of my competitors have run away from. Already, the opportunities are lining up.

Let’s restore some dignity to this noble profession and start seeking innovative ways to offer more creative and value-driven services to our clients. And while you’re at it, toss the salary survey in the trash.