Margin of Profit: Teamwork

Abstract

The writer believes that profitability is essential to professional success in consulting engineering, and that professional staff should understand that fundamental. So believing, it follows that management is responsible for communicating the mechanics of profit making in nonaccounting terms, and for defining the staff interrelationships that generate profits. This is expressed in the management of three key ratios: average multiplier (M); utilization rate (U); and expense (R). Much as each member of a basketball team is coached in the duties and responsibilities of his or her position that create winning teamwork, each member of a consulting engineering firm may be coached in the teamwork required for profit‐making success.