Up and to the right!

UP AND TO THE RIGHT

What we learned to measure and how it focused our attention on our “Productive Capacity”

We are working on a three year operating budget

We know that we could do more volume with our existing staff – but how much more?

We wanted to see where the ceiling of our “Productive Capacity” was and what influenced it

We assembled two years of historic data for each of the categories we track to

determine how we spend our time

Totals for Design

Jamie: DesignJanet: ConstructionKaren: Admin

Totals for Construction

Totals for Administration

BILLABLE

NON-BILLABLE

Including Time Off

Converted to Percentages

That total 100%

These are taken from previous design and construction personell to be used for future budgets

The percentages of our time were translated to categories used to shape our Annual Operating Budgets

(we are developing a three year plan)

This is a map of our “Productive Capacity”

It shows how we distribute our time

We use this data to determine how much Revenue we can expect to generate based on our current or anticipated staff and what their productive capacity is.

This “Staffing Worksheet” is essential to generating data that helps us understand how much revenue we can produce with the staff we employ.

In this worksheet we first record payrates, benefits, hours, labor burden, and time off

This tells us what it costs to employ each person for a year – and shows burdened billing rates with and without time off

We all have health coverage thru our spouses!

We then apply those percentages to see the revenue we are able to generate for billable hours

Hrs. x Bill Rate =Hrs. x Burden $=

Hrs. x Bill Rate =Hrs. x Burden $=

Billing for our time is only a fraction of our Gross ProfitMost is from Construction

We do the same for non-billable time.

This data feeds our annual operating budget categories for Overhead

This is 55% of our Overhead!

All this data feeds our Operating Budget (so we aren’t guessing!)

This part of our Operating Budget is fed from the previous Staffing Worksheet – in this case related to Overhead

The Budget includes narrative descriptions of each of the expense Categories

This is the average of how we spend our time

So… back to our quest to understand Productive Capacity

We studied how our time leverages our Revenue

We studied how our time leverages our Revenue

These are assumptions about the time we spend on fully and partially active projects and associated time. It pretty much aligns with how we actually spend our time.

We studied how our time leverages our Revenue

We use this to determine how much revenue we are producing for each hour we work (understanding this is order of magnitude thinking)

We studied how our time leverages our Revenue

We then asked: If we spent one more hour on billable time each day, how much more might that increase our revenue?

UP AND TO THE RIGHT

One more hour a day?

WE CAN DO THAT!(or at least try to)

Inspired to work at balancing our time in a way that enhances our ability to reach peak “productive capacity” we record our progress and review it every week.

In addition, we created a new metric which we dubbed “DBF” – for “Done by Friday.” These are critical path goals for the week that we identify at a Monday staff meeting, assign with a reminder system, then evaluate the following Monday.

This focus has helped each of us become more deliberate about how we spend our time each day.

We are now using a weekly planner that doubles as a timesheet. Filling this in at the beginning, rather than the end of the week helps us to stay focused on key

priorities and billable hour targets

TARGET IS >20

We applied these methods to our three year planning process.

We anticipate adding an architect (who could become an owner) and a design/production support role.

This is what that looks like.

This focused our attention on the next question:

WHERE WILL THIS WORK COME FROM?

UP AND TO THE RIGHT

… SO NEXT UPLead Generation and Sales tracking to secure the projects we

need and quantitatively know we can produce!