Currently you, the principals, do all of the marketing, but you've noticed lately that firms with full-time marketing personnel seem to enjoy a higher success rate in acquiring new work. Your secretary takes care of your accounting and payroll and you would be lost without him.
Located in a loft space in the downtown area, your office is fairly straightforward and functional. Drafting tables are weathered but still work fine. The floor is concrete and the lights are workshop variety fluorescent fixtures. It?s not bad, but your office wouldn?t appear on the cover of Architectural Digest, either. The reception area is functional and simple. You have been considering hiring an interior designer to re-design your office to make a more positive first impression on potential clients.
Your current staff works well together and the office seems to be free of any serious personality conflicts. You would like to keep this group together, but you are not sure you can grant raises to keep them happy.
Currently you own two aging computers. One is a PC (1 GB hard-drive, Pentium 133 chip with 16 MB of RAM) and run AutoCAD on it...slowly, while your secretary uses the other, a low-end Mac you purchased on sale six years ago, mostly for word-processing. Your entry-level landscape architect spends the most time using CAD, but is self-taught and has never received formal training. You have an aging black & white pen-plotter that produces drawings slowly, when it works at all. It seems to you that, at times, the plotter repair-person is a full-time employee of yours! Producing CAD drawings tends to be slow and unprofitable, but you hear that other firms have invested heavily in CAD and produce virtually all of their drawings digitally. You wonder how and why?!?
Your secretary has complained often about the Mac, insisting that he would be more productive with upgraded hardware and software. He has threatened to go elsewhere if you don't buy him a new computer...soon.
Your current assets are $50,000 in a non-interest earning checking account. You have a back-log of $30,000 in accounts receivable for work which will end in the third week of this exercise. Assuming the client approves the finished documents, this fee payment is due at that time. The client has paid all of your previous billings, although some have arrived as much as a month late.
Current Office Status:
You currently have seven people on your payroll, including yourselves.
1. Principal: $80,000/yr
2. Principal: $80,000
3. Principal: $80,000
4. Senior Landscape Architect: $65,000
5. Staff Landscape Architect: $45,000
6. Entry level Landscape Architect: $33,000
7. Secretary: $30,000
X 1.35
Total annual Direct Personnel Expenses (DPE) = $557,550
Weekly DPE = $10,722
Other Costs:
Annual Professional Liability Insurance Premium: Select your option plan from the 'shopping' web-page
Overhead Costs: You currently rent 3,500 s.f. of office space @ $15.00/sf/yr
Your rent includes all utilities and maintenance on your space and equipment.
You pay your employees on a weekly payroll schedule.