Key Financial Metrics: Benchmarking and Performance for firms in the AED industry
At the 2025 Ontario Association of Architects conference, our partners Amir Fathollahzadeh and Purav Patel presented a session on financial benchmarking specifically for Architecture, Engineering, and Design (AED) firms. The core message was that truly effective benchmarking begins with understanding what you're measuring against.
The presentation emphasized the value of internal benchmarks. Given the wide variation in firm structures, overhead costs, and project types across the industry, tracking a firm's own metrics over time often yields more meaningful insights than external comparisons. By observing internal patterns, leaders can gain a deeper understanding of their unique financial landscape.
Participants were introduced to indicators such as the net fee multiplier—a crucial metric that compares revenue to staffing costs. This ratio is particularly vital in today's dynamic climate, allowing firms to proactively assess how shifts in workload or project timing impact profitability and support more informed decision-making.
The session also highlighted the power of a simple financial dashboard. Establishing a regular rhythm (monthly or quarterly) for tracking key metrics enables leaders to respond to changes promptly, fostering proactive management rather than reactive adjustments.
Furthermore, the presenters distinguished between firm-level and project-level data, illustrating how each provides a unique lens on financial health. Understanding how individual projects contribute to the overall business strengthens operational efficiency and strategic planning.
For firms contemplating ownership transitions or long-term sustainability, this level of financial clarity serves as a powerful tool to enhance succession strategies and secure future growth. Ultimately, the session underscored that financial data is not merely a record of the past but a dynamic tool for shaping future success.
Get in touch with Amir or Purav to talk about how your firm could benefit from benchmarking and a financial dashboard.
