Try It Yourself - Grow Your Own PSF

Run the finished professional services firm model in your browser - set the business development allocation and the hiring, and watch what it does to staff and cash.

Keywords

system dynamics, sd dsl, professional services, business simulation, bptk, bptk-py, python

Try It Yourself: Grow Your Own PSF

Part 2 builds this model over seven steps and explains every equation in it. This page skips the explanation and hands you the finished model, so you can run the firm yourself: the two sliders are the two decisions the model knows, and the two charts underneath redraw whenever you move one.

The base case for comparison is the one from part 2, step 7: a fifth of capacity in business development, nobody hired, and a firm that neither grows nor shrinks.

The model

The whole firm in one cell - stocks, flows, converters, equations. It is the model of part 2 after step 7, so if you want to know why a line reads the way it does, that is where to look. Edit anything here and both charts follow.

Your two decisions

The cell above is what turns two numbers into a scenario the model can run. The two sliders underneath are those numbers.

• The allocation is the share of capacity that wins work rather than delivering it. Raise it and more projects come in - six months later, because that is how long acquisition takes - but the capacity to deliver them is smaller in the meantime.
• The hiring is how many people you take on in month 7. They arrive three months later and cost their salary from the day they start.

The base case runs at 20 % and hires nobody, and the firm holds its ground: a backlog of 320 project months, delivered at 160 a month, won back at 160 a month.

Three things worth trying

Every number below is what the charts show, not a guess - the base case ends the two years with EUR 24.44 million.

• Sell harder and hire nobody. Push the allocation to 45 % and cash ends at 8.6 million instead of 24.44. You win more work than you can deliver: the backlog grows, the delivery capacity you gave up is what would have earned the revenue, and the revenue you do win arrives six months after you paid for winning it.
• Hire without selling more. Leave the allocation at 20 % and hire 200 people. They arrive in month 12 and the staff chart steps from 200 to 400, cash dips while they are paid out of a backlog that is not growing, and recovers to 18.6 million - still short of doing nothing.
• Both together. 40 % and 200 hires ends with 400 people and 15.1 million.

That is the lesson of the page: within two years every growth path costs cash. The firm gets bigger, not richer, and no setting of these two sliders reaches the easy cash target of EUR 30 million. Which is exactly the question part 3 starts from.