Are you struggling to make a profit in your business? Are your expenses devouring your revenues? Most companies, including professional service firms, like engineering, are always struggling to make a profit. The majority of a professional service company's expenses are labor related. Many companies choose to focus on a few things to increase profits, increase work load or decrease staff. There are many other strategies you can use to achieve the same result.

A typical engineering company strives for a profit of between 10 and 15% after expenses include salaries. These margins can drop if the market is very competitive or there is a substantial drop in engineering services demand.

Many companies are looking to cut their fees, but this may not be the answer. Ever engineering firm knows that there are certain expenses that they can not escape. There are many expenses that must be paid, including staff salaries, business licenses and professional licenses, insurance for business, professional and office expenses, as well professional licensing and business insurance. You can make adjustments to the company budget to keep a certain percentage of the revenue.

Below is a list of the top 5 key strategies to increase your company's profits without cutting staff.

Key 1: Increase Service Fees - This may sound a little counter intuitive right now during a recession, but a small increase can have a significant impact on your profits. Your firm offers a $1000 service with a 10% profit margin ($100). Your profit would rise by 50% if you increased the fee by 5% ($50). The fee increase will not be noticed by your clients but can be very noticeable in your company's Profit And Loss Statement.

Key2: The workload determines company size. - An engineering firm should have both permanent staff as well as independent contractors. Dependent on the amount of work, the number and type of independent contractors needed can vary. Out-sourcing, also known as independent contractors or subconsultants, is also possible. Only those employees who are absolutely essential are permanent. Outsourcing allows the company flexibility to manage a large number new contracts, and reduce the number when it is difficult to find contractors. An example is to have one or two CAD Designers as permanent employees and then a pool of CAD Operators that are independent contractors.

In recent years the federal government has really cracking down on who is an independent contractor. Independent contractors are in business for themselves and are able to obtain work from numerous sources. This arrangement is not considered independent contractor and will be frowned upon by the government. Talk to your tax advisor about any questions.

No Focus on Sektors with Very Low Profit Margins. While it is possible for companies to take on more work in times of economic hardship, your marketing efforts should not be focused on those industries that contract with the most expensive firm. The price is not the only thing that should be considered by professional service companies such as engineering firms. A skilled engineer can help developers save thousands, if perhaps millions of dollars. The engineer's fees will almost always be more than the engineer's. The cost of services that are negotiated is often not worth it. Don't pay the service fees. There are those clients that will expect that since times are rough you should provide even more concessions; free or drastically reduced fees to keep them as a client. It is almost never a good decision to purchase a project for the sake of getting work. You should know what your breakeven point is for your company and which sectors or services generate the highest profit. Anything less can force your company to shut down.

Key 4 - Contact engineering company in Malaysia Previous and Existing Clients for New Contracts. This is the best way to find new work. If you have done a great job for them in the previous, they are more likely to return your services. Even if their previous engineer was less than satisfactory, they may choose to contract with your services again. It is possible that the new engineer has not treated them as well. Clients may have lost their contact information in some cases. Clients may lose your contact information in these cases.

Client satisfaction is the best marketing tool in business. This is the best marketing tool for engineers. The loss of clients to other engineering companies results in a immediate decrease in revenue. This can only be recovered by finding new clients. In order to find new clients you will have to sit aside additional funds to market them, which will further reduce your bottom line. Your existing clients can either help you to find new clients or give you new projects.

You may think they are so happy with your performance, that they don't realize you need more work. They may know people in the industry who are unhappy with their professional designers. Your best marketer will be your clients. Referring clients to you will already be convinced of your company's capabilities and services. Sometimes, clients are so large that they need multiple engineering firms. If they really like your performance, they might just give you a larger share of their available jobs. Your existing clients are always the best source of new work.

5: Keep Your Promises- Clients expect that an engineer will perform all services described in the contract. This is why the proposal has such importance. It is important to clearly state the services being provided and to clarify any ambiguities. The proposal should contain what the client is to expect. Before signing an Agreement, ensure that you and the client fully understand each other's expectations. You may be accused of providing a service the customer does not agree to. This may lead to problems later on and can make the client unhappy and unwilling to do more work. It doesn't matter whether the economy has been in good times or not.