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Thirty years ago I was about to complete a BS in Surveying. I was not looking forward to graduation because surveying jobs were scarce due an economic downturn caused by the "Savings and Loan" debacle. I was taking a course in small business management. The course involved the preparation of a business plan and I had elected to do a plan for a surveying business. I was struggling to make the financial model generate a positive cash flow given the financial research I had collected. Surveying publications contained very limited business information. I had interviewed several local owners of survey businesses to gain the information I needed. Most of the owners were reluctant to provide information and a few even discouraged me from considering a surveying business. I explained the situation to my professor and he suggested I should consider another line of business. This is not exactly the advice I had hoped for! As these events unfolded, I was pondering if I should go on to study urban planning or law. The attorneys who I knew said law was a bad career choice. I was tired of a steady diet of Ramen noodles so I graduated and went in search of a job. The company who hired me went bankrupt in 2 years due to cash flow problems. I eventually went to work for a surveyor who was operating a successful business. It did not take long to figure out what was wrong with my business plan and it restored my confidence in a surveying career. The short story…the difference between a poorly run business and a well-run business is sound business practices informed by reliable and timely financial data. Like many endeavors in life, success or failure is a function of competence.
I am sharing this story because it seems timely given the circumstances. Most surveyors are employed in small business. To the extent these businesses do well, the profession will do well. This is easier said than done. Statistics from the Small Business Administration and other organizations show a high percentage of small businesses fail or underperform. It is worth noting larger businesses can suffer some of the same performance problems and the causes of the distress are similar. A short article cannot adequately address this subject. What follows is economic data that I extracted from federal agency websites. These agencies publish the data with various caveats. From time to time the agency modifies the data format, therefore a user must manipulate the data in order to combine data sets as I have done. As a result, please view this data with some caution. The goal is to present some information that will stimulate further research and discussion into matters that are relevant to the future of surveying.
The economic data shown herein is at the national level of the surveying and mapping industry. It is possible to obtain data at state, county and metropolitan levels. This aggregate data is useful when basic business planning starts. It is also possible to purchase relatively inexpensive industry financial metrics from a company such as Bizminer. This information is useful for setting up basic financial models. More detailed information is available from consulting firms such as Zweig-Group or PSMJ Resources. And a few AEC business software vendors publish financial metrics. These are not specific to surveying businesses, so it takes some judgement to apply the information. This type of information is typically used for benchmarking business performance. All these sources of information have limitations and the benefits are for creating an awareness of factors to consider in decisions. Actual business performance rests on good practices, effective decision making and the skillful execution of tasks.
Occupational Employment Statistics–17-1022 Surveyors
The Bureau of Labor Statistics (BLS) provides information on labor economics. The Occupational Outlook Handbook summarizes information related to occupations. The BLS also publishes occupational employment statistics related to levels of employment, wages, concentrations of employees in certain industries, concentrations in geographic locations and the number of jobs in the given occupation per 1,000 jobs in the given area. These are estimates.
Figure 1 shows the composition of the workforce. The occupation classification system changes from time to time. Geodesists are in the Natural Scientists group and not included in this chart. It is worth noting the cartographers and photogrammetrists did not seem to be as adversely impacted by the 2007 Recession. This may have something to do with their services being used in geospatial solutions while surveyors tend to focus on land development and public infrastructure. The technicians appear to have been most impacted. To some extent the technicians are the pool from which future surveyors are developed.
County Business Patterns–541370– Surveying and Mapping (except Geophysical) Services
The following is from the CBP website: "… This industry comprises establishments primarily engaged in performing surveying and mapping services of the surface of the earth, including the sea floor. These services may include surveying and mapping of areas above or below the surface of the earth, such as the creation of view easements or segregating rights in parcels of land by creating underground utility easements." The County Business Pattern (CBP) data for an industry is published annually. The data can be viewed at the national, state, county and metropolitan level. This data set includes the number of establishments, employment during the week of March 12, first quarter payroll, and annual payroll. The data can be accessed in several different ways. The American Fact Finder is an application for parsing out data with certain attributes. The advanced search method provides a relatively simply way to drill down in to the data.
Figure 2 shows national totals for the Surveying and Mapping industry between 1988 and 2014. The red line represents the number of people employed and the green line represents the number of firms in business. Alone this data is a bit unsettling, but some additional information is needed in order to understand what has transpired over time. Behind this data are economic boom/bust cycles, the impacts of technology, demographic shifts, migration across industries, etc. This data suggest there is more to the story than the 2007 Recession.
Figure 3 is another chart developed from CBP data that shows the number of firms that employ a certain number of people. This data reveals about 60% of firms employ 1 to 4 people and the next 20% of the firms employ 5 to 9 people. In other words most surveyors are engaged in small business. This data has all sorts of interesting implications. For example small businesses are often at a disadvantage when it comes to finding vendors for benefit programs or contending with taxation. The owners of small firms often do not have options for an exit strategy. Considering the demographic shift that is underway, new business formation will become a concern. If only 1 out of 7 professional surveyors start small firms, then a constraint on the industry in the future may be business competence. The data also tells another story. In the aftermath of the 2007 Recession there was an increase in the number of firms employing 1 to 4 people and this is likely because larger firms released employees. I suspect some of this was possible because of technology.
Nonemployer Statistics
Figure 4 is developed from Nonemployer data that shows the number of establishments in the Surveying and Mapping industry that operate without paid employees. They may hire contractors. It is worth noting the number of establishments did not decline as much as overall employment did after the 2007 Recession, but the receipts did. The receipts are an average, so this does not show the range of receipts. It is common for companies that have paid employees to complain that they cannot compete on price with these nonemployer firms. While this is a logical conclusion, it is worth pondering what impact these types of firms have on capturing the market’s demand for services. The IRS also publishes tax statistics related to surveying businesses operated as a sole proprietor. This includes aggregate income statements which show typical expense categories and net profit. A few of the proprietors file taxes under Schedule C-EZ which suggests these may be part time businesses.
5 Year Economic Census
Every 5 years there is a detailed census of businesses. The last census was published for 2012. These offer a wealth of information. These show the composition of receipts by services and source and other types of useful information. It is possible to do correlations related to business size and revenue generation. In the past I noticed small firms did not perform as well as larger firms and I attributed this to owners of smaller firms being involve in both the management of operations and delivering service. This tends to limit the amount of time spent on managing. A larger firm has the opportunity to have dedicated management staff. Digital communication and information technology has been addressing this problem, so perhaps the small firms are doing better.
Lee Lovell is a registered land surveyor in Colorado and Nebraska and has accumulated 34 years of professional experience. He resides in Parker, Colorado where he was part of Western States Surveying for 20+ years. In 2013, Lee completed an orderly wind down of WSS business operations, and after taking a year off, returned to the never boring, sometimes frustrating, and usually rewarding practice of surveying.
A 1.382Mb PDF of this article as it appeared in the magazine—complete with images—is available by clicking HERE