Financial Key Performance Indicators (KPIs) for small to mid-tier architecture practices

Here are some KPIs to be aware of:

Fees per employee (fee income/number of employees).

A useful measure of growth and, if compared year-on-year, it will help you plan ahead.

Operating profit per employee (profit before interest & tax/number of employees).

A measure of the firm’s profitability. The operating profit figure and number of employees are publicly available at Companies House (generally for LLPs and Limited Companies above £6.5m turnover), making it easy to compare yourself with other architecture practices.

Overhead rate (indirect costs/direct staff costs  x 100%)

A measure of the cost of the services you are providing. Indirect costs include rent, rates and other   administrative expenses which can’t be attributed to a particular project. Direct staff costs refer to those that can be attributed to projects. The lower the rate, the more profitable you are and it will help decide how much you should be charging.

Break-even rate (overhead rate + hourly salary)

A measure of the cost of employing people. A more useful measure is to work out the break-even point on  each project. This is the point at which income equals costs, above which profit is made.