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modo, that is essentially what I did: joined a friend who asked me to come in as a partner to his existing firm.
First off: think hard about how much you value your friendship with this person. Going into business together will kill the friendship. And I don't necessarily mean that in a dramatic, combative way: it's not that you won't stay friends, and even grow closer, but you won't ever interact as "just friends" any longer. You can't because, as has been said by others above, running your own business is so invasive in your personal life that you will think about it constantly, and being with your friend will only remind you of it. It's like what has been said about being pregnant: after the havoc that pregnancy wreaks on your body, you might have a nice body again, you might even exercise and get a better body than you had before, but no way will you not have a different body after giving birth: your body is fundamentally changed by the experience and you can't go backwards to how it used to be. Thus is going into business with your friends.
There will also be issues with brand identity. I will address this as if your friend is a sole practitioner: s/he has a recognized identity. S/he needs this identity to remain in business, as reputation is so important in this field. If you are a partner who will feel the need to have your name on the firm's door, then the existing firm's identity will change. Is there the potential for this to adversely affect business, and how can you make sure it doesn't? Is your friend ready to give up his/her position as sole identity provider? Are you ready to commit your personal reputation and identity to the firm? Because all your actions now will reflect on the firm's reputation, and that can be hard.
If you are high up in a corporate firm then you are probably well-rewarded in benefits and salary. Make absolutely certain that you spell out your terms precisely in your new contract. (It goes without saying that you need to have a written agreement with this firm before you join: how much ownership you will have, the mechanics of how you will gain more ownership over time, etc. The friendship changes the moment you agree to join and you have to treat it like a business: as my accountant says, you have to act like a corporation if you want to be one. Don't say "I trust my friend not to screw me". Make a formal arrangement that will make the both of you secure in what is expected - and absolutely make it on paper.)
Things I have lost since going into my own business: annual salary increases, big (any) holiday bonuses, decent health insurance, matching (any) 401k plans, security that if things slow down I'll still have at least a partial income, the safety net of knowing ultimate responsibility for problems falls on the shoulders of my employers, an absolute impossibility to spread the work around: if something needs to get done, you're the one doing it no matter if you are sick or your kid is sick or your car breaks down or whatever.
If your friend already has a reliable business plan and name brand, you may find resistance to change. So will you really be able to practice the way you want to within that framework?
I'm not trying to scare you away from taking the leap to partnership in a small firm: I'm glad I took the leap, have learned a ton, and am very proud of myself for taking a risk. But there are a lot of pitfalls, both mundane and personal, in doing so.
Where to begin - lots of good advice and thoughts, so nice to hear what other people are experiencing.
We've got a very small (3 people total, and two of us are my husband and myself) design-build firm, officially I'd say it's been about 3 years - we did some side design only projects for a few years before that, and I've not been quite fully self-employed for 3 years yet. We also have a 10 month old daughter, and are almost done with an addition on our house (argggggghhhh!). And with very little financial support from our families.
So many positive sides, so many negative sides. Learning lots of things about ourselves, clients, design, business, politics and all the rest. Stress, stress, stress, work work work. Right now we don't have week-ends or even evenings, explained by LB up there in large part because of the baby. Although we're probably prone to stress anyway and not very good employees, I do find myself wondering almost daily if we'd be better off with regular jobs. Mostly for the stability and less working hours.
Financially, it's been a mixed bag. The first year we made very little money, last year we did very well and saved up, this year it's gone back down considerably and next year who knows... We've finally made some headway on the marketing (got a website up and are sending out a mailer soon as well as listing ourselves on a local referral website), but it's anyone's guess as to whether that will help. As I believe whistler said, its really all about word of mouth and doing a good job for your clients. You need to build up a network and client base, and that's why I think the 5 year mark probably makes sense for most people - I imagine that's the amount of time it takes to have a big enough network to support things.
All of our work to date has been residential - we'd love to do something else, even school modernizations (which we did while working at a larger firm and while boring is very lucrative), but we haven't had the time to try and make those connections. The plan is to really push and try and stay in business one more year - the reality is that we may have to spend a good chunk of our savings to do it. It's frightening, but we figure life is short, why not try, and we also know that if we do both end up going back to work for other people together we'd make a lot more than we're likely to make on a regular basis on our own, and we could earn back the lost savings (probably a bad plan, but we've already figured out we're not financial geniuses).
We've actually had good luck with employees, though we haven't had anyone really full time until a few months ago. We did have a third partner who decided to jump ship last January - that was a big strain and we've had to restructure but the main issue is always where is the work coming from, and how to we manage all the work we need to do with limited resources. It really is challenging - at this point I do all the business development, accounting (for both the design company & the construction company), design work, a good chunk of the CAD work & permitting, as well as prchase orders for the construction company. Also taught design studio this semester...no wonder I'm buried under a pile of paper, checkbooks and tile samples right at the moment.
I actually like doing it all, but I recognize clearly that if we are successful and build up the practice I'll have to choose which things are really important to me and figure out how to delegate. I'd love to let someone else deal with the financials, but its quite a lot to keep on top of and I'm not very good at quickbooks. I have an extremely archane system where everything is handwriten in several different places and gets transferred back and forth (speaking of which I'm about 9 months behind on the books and taxes are due the 15th for the construction company, joy). But we do generally get paid, and though I try to keep up with the billing occasionally I slip.
So the jury is still out, but I've decided I really need to be more positive and optimistic about it (I've been on a downer kick for a while, saying we were running out of money fast and we'd have to give up). I feel we provide excellent services for a very reasonable price (if not downright cheap), and we do enjoy it enough to keep on as long as we have enough work to pay the bills. I'm not sure how I'll feel about it when baby #2 comes along (nothing yet, but we do hope to expand the family).
A few other things (sorry for the ramble).
The absolute best things about having our own company are working with my husband and seeing my designs built (and participating very closely in the building process). It's also been great for me to work at home part time and be able to be with our daughter (we have a baby-sitter that comes to the house and an office in the backyard). Even if it doesn't pan out in the end, it's been a very nice time and a great experience, and I wouldn't have done otherwise.
Also, our third partner was my husband's best friend, and they don't really talk anymore. No huge falling out, that's just the way it evolved, so yes, think very carefully about entering into a partnership with a friend.
A question to all of you who have answered so brilliantly (yes, this is an excellent thread):
Did you ever consider working to the top of the large(r) firms for which you previously worked? To me, right now, the option of running an established firm seems somewhat more attainable - I cannot fathom the new-firm struggles that all of you described and the uncertainty that is likely to last for at least five years.
Of course, they key to working to the top of a large organization is initally selecting the right firm - one that you can envision running someday.
Hey all, thanks so much for all of your input.
From my perspective, all this is invaluable: this forum to discuss ideas and experiences, digital technology that brings us all together, allows small firms to have many of the ammenities formerly only big firms could have (softwear, plotters, etc..) and the growing collective sentiment that if we all sketch furiously enough, architects can take over the world in an autocratic, but benevolent sort of way...
Maybe the last part is gibberish, but again thanks for all your experiences.
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DCA. When I decided to quit my job to head out on my own, my employers thought I was nuts. They explained that I was on my way to being in a leadership position. I liked my co-workers and the work I was doing. So why leave? I really don't know why I left, just that I felt antsy and I wanted to try something new. I think that moving into a leadership position within a larger firm is definitely an option. But in no way is this related to starting a firm. While both require a huge time commitment and a certain amount of talent, starting a firm has very different requirements and rewards. There is no support system for one (marketing staff, accounting dept, technical staff), and it feels like you have to learn how to do everything all over again. It is difficult to articulate why it is so different, because I think the differences are more emotional than practical.
On the practical side, my experience had been designing very large (200,00sf+) projects, so I sometimes feel a bit out of my element with smaller projects. Designing a portion of a large project is very different than designing the entirety of a small project. Maybe it would be useful to work for a firm that does single family residential project or small fit outs to have a better understanding on how to manage a complete project.
I completely agree with jbird that access to new technology is one of the things that allow smaller firms to compete. Not only is it possible to work on projects that use to require expensive equipment and many additional hands (films for example), but also it makes it much easier to collaborate with other practices. It has allowed us to work on a number of projects located in other countries for example.
While I believe that I could have continued on the path that I was on before, and would have been fulfilled with the work I was doing. There is absolutely no way that I would go back to work for a large firm today. I tried going back on a temporary basis about a year after I had left that world, and it felt like the walls were closing in on me. That job did not last long, and I have no plans to try that again.
I was particularly engaged by what R.A. Rudolph wrote, so much of what she described has either happened or is about to happen to us. It was useful to talk about many of these issues with my partner, especially possible problems with adding partners or merging with another firm. Made me laugh too. Best of luck to those of you heading out on your own, and may the economy stay relatively strong.
DCA, just briefly as I've gotta get busy with work, I was moving up at my old firm, and they offered me a plum new position when I announced I was leaving. But only in the last month or so have I realized that leaving the nest was, for me, a necessary part of my professional and personal development. I started there straight out of school, and in a way would never have escaped the image of a young green intern in that firm. Some days I picture myself going back to that firm and being a completely different employee/force than I was before I left. Just my own experience after being in one place for ten years.
Good comments, Sarah, re: the differences between working on parts of large and then an entire small project - I have experienced the same thing. It is in a way starting all over again on an entirely new learning path - but isn't that one of the things we all love about architecture, it's constantly new?
"isn't that one of the things we all love about architecture, it's constantly new?" Very true. This may also be why architects make less money on average than other professionals. There are significant costs associated with this perpetual learning curve.
LB said: "I started there straight out of school, and in a way would never have escaped the image of a young green intern in that firm." I think it's difficult to overcome the image set out by the circumstances of one's hiring at *any* level at a large firm, requiring a bit of effort to secure new and varied opportunities from then on. As opposed to the smaller firm situation where everyone has access to a wider spread of responsibilities and experiences related strictly to getting the work done, the large firm experience is about slowly acquiring mentorship and opportunity over time through interpersonal relationship builidng, which takes usually much longer than one would like for it to. This kind of world is almost impossible for someone to live within after having experienced the insane collage of circumstances and experiences that is small-firm ownership, IMHO, unless you're hired into the large firm under very special circumstances.
So for all those rockin founding principals out there - when did you start dreaming about running your own practice?
When did you start networking to cultivate potential clients?
I learned something outright shocking today, and apparently this is true for most states, not just Indiana: the professional that stamps a set of drawings, even as a member of a corporation with several licensed architects, is personally liable for defects in the building design. Personally liable! Which means no corporate structure, llc, s-corp, whatever, can protect you from losing your personal assets in a claim made against your project resulting from defective design!
You most likely won't lose any assets held jointly between you and a spouse, but anything with only your name on it is open game.
This is because as a professional you are licensed as an individual, so no corporate entity can protect you.
This freaks me out. And this is why ANYONE who is an employee SHOULD NOT BE STAMPING DRAWINGS! Never, ever, ever. If your boss tries to make it seem like it is cool or a sign of your level of responsibility to stamp drawings, just say no.
I'm freaked out by this.
mine was accidental and unplanned. there was no infra structure to it and still not after nearly all those years. even though i worked for other people 3 times, i've always had my own projects on the side. one time i was published in new york times magazine to the amazement of my then boss, who would be very happy to be in the same issue. it was my first week at his office and i was treated like a design partner after that.
i would like to be a designer for a firm...but since i've been out of the firms since 2000, i'm looked down upon......but i have my freedom to do things...... even though i have to work hard today to eat tomorrow, i like what i have been doing over the years..... just need to find another market to tap into
LB - surprised you didn't know this, but maybe I learned the extent of the liability in researching the benefits of incorporation. In short, as a licensed professional you always remain personally liable, no matter what business structure you have. Hence the necessity for errors & omissions insurance (or malpractice insurance for doctors, and I'm sure there's something for attorneys & accountants as well). Not that I have it - I have also learned through experience that the chance of being sued for working on a single family residential project is very slim...
What you gain from incorporation is supposed protection from creditors - bank loans, credit cards etc. in the name of the company, should the business fail.
But I would never stamp drawings as an employee, or for money when I wasn't actually in control of the project (which we have been asked to do a few times). However, the law in California also says that the person submitting/responsible for the drawings MUST stamp them if they are a licensed architect. I find it a bit strange, but if you are submitting for a project which doesn't require an architect (most single family residences & up to 4 units here), you still have to stamp the drawings.
alright rim joist, here is your foreshadowing my friend. it comes on the heels of a nice long two week trip basking in the warmth of the sun and people of chile. more on that later though.
as i mentioned above, i have been on my own for five years. things have been good. i've built a good client base. i have done some interesting work that has left my clients pleased and left me profitable. as anyone how has their own gig knows, doing it by yourself can be tough no matter how much you love it. you are always on. always working. always thinking about it, and there is never enough time for anything. no job is perfect, and these are the imperfections of running your own business. turning off is tough.
with that said, i'm finally getting some help. not just any ol' help either. it's my best friend. it's my wife.
she is a creative director for a large design firm in town, and she gave notice the other day. she will bring skills and assets to the studio that will well complement, and in many cases, exceed mine. we have worked with each other in the past. she has been a part of every important design and business decision that has effected my studio in the last five years. hell, once we've even got fired together. how many of you can say that you got fired with your wife/husband/SI. we actually met working together. granted is was only doing a group project together in college, um, 18 years ago.
we will be finally moving the business out of the house. some separation between personal and professional lives are needed. we are lucky enough to have a friend who owns a small building two blocks from our house. the space is about 1000sqft with views of the shipyards, lake, and city.
with all this excitement, i'd be lying if i said i were not nervous. i'm nervous as hell. all of our eggs are in one basket now. everything is on the line. no more paycheck coming from someone else every two weeks. no more health insurance being mainly paid by someone else. no more getting paid for vacation, holidays, and being sick.
if turning off was tough before, it certainly will be now, but i am so looking forward to it.
congrats, e. sounds like a great all-around situation, despite the anxiety it might bring for a while.
thx, mr. ward.
that separation between personal and professional life is MUCH needed to make things balance out, i had a bad experience down the road of love/association
but your setup sounds fantastic, good luck and have a great 07
Wow, fascinating thread. Thanks for the insight.
My biggest question is how did you bring in that first paying client?
I know of several small firms around town that were basically started by an architect leaving an established firm with a client or two in-tow. Great for keeping that cash flow but not so great for your personal reputation in the local community.
Personally I love project management, contracts, billing, etc. Would I be better off starting my own firm with a good partner as a designer? Or should I just work up to principal where I'm at and take my big paycheck, company car and 5 weeks vacation?
my first paying client came from craigslist.
it worked, but not recommended...
if it makes you happy...go for it
silverlake? What? Do tell...did you put an ad out?
No, I just regularly scoured the adds where people where looking for a 'freelance architect'. I was miserable at the firm I was at so I desperately wanted a side gig, and figured this was the only route at the time.
Needless to say, the people who look for an architect on craigslist are not looking to spend a lot of money. Its fucking ridiculous what they're willing to spend. To make matters worse, you have hacks offering up drafting services for pennys on the dollar.
To finally land a job I had to undercut other people and work for a fraction of what I wanted. Its embarrassing what I worked at first... But it lead to real work.
Thank God I'm not bottom-feeding off of craigslist anymore!
RA, I just learned that Arizona is the same way - apparently if you are a registered architect and you prepare essentially anything for a project, you HAVE to stamp the drawings, whether one is required or not.
That's stringent. but I do see the point - if only it wasn't undercut by letting people build houses and small commercial without a stamp. That sort of legislation really could lead to people not wanting to get licensed!
Ridiculous. I'm starting to think anything that requires a building permit should require an architect's stamp.
Oh and aquapura, to your question: my first paying job was handed to me by my boss, who didn't want to deal with interior furnishings for the hosue of one of our consultant engineers because he was nervous about how it would affect his their relationahip (boss and engineer). And it was too small a job for the office to take on anyway. I guess my second paying job was a client who we had done public work for who called me privately and asked me to handle her kitchen renovation, which I did under the radar of the office.
Remember, everyone you meet is part of your network!
My first paying job came via the telephone whilst I was in the school's office someone called looking for an architect (or something like that) and I was the only on there at the time that fit the bill. Sat and had lunch with her, turned out to be the daughter of a famous musician (also a musician in her own right). The project was never built because i had to take up another job offer in another country and she wasn't willing to work with someone to finish it. Nice lady.
bump, because i am a dumbass.
I return to this thread time and again because it is so brilliant.
Here's another question that I haven't seen in other threads: What is the ideal amount of seed money that you had or wish you had prior to starting your own firm? $100,000 seems like a nice, round number, but I'm not sure if it's way too much or not enough.
When you break it down, it seems almost feasible to save $10,000 a year for the next 10 years.
And is it more or less expensive to buy-into an existing firm or to start your own firm?
dca, i've heard that at least a year's salary should be banked? although, like buying a home - and needing 10% - 20% down - i think it's a myth perpetuated by those not wanting competition. i mean how many of us are going to continue with the day job, and still take on work - hand raised?
the thing i am wondering is there something in my day job that i can transition to so that i am not at production mode, and still not be spent when i get home?
hrm... It sounds reasonable to bank one year's salary as a fall-back for the first year, as you'll probably not be profitable.
But what about other business expenses? (office space lease, computers, employees, insurance - everything that's been mentioned above.) I guess this is where the business plan comes in. liberty bell: how is yours coming? :)
my plan is to have that one years salary saved up. ok, what year will that be based on? this year or one in five years???? since I should be doubling my income between now and then- I'll aspire to the larger amount. half that dough will go towards keeping me afloat, the rest will be operating capital for rent, computers, marketing and paying the accountant.
I'd rather not try double dipping once I get a client- rather would spend 100% of my time on my own project then working for the man at that point.
Still, it will take a year or two after hours to get the full business plan worked up, website ready to go, and to start hunting for the first commission...
Why have a bank role saved up ????? Just start out of a bedroom with a couple clients and go, unless of course you plan to go out and spend a ton of money on a fancy smancy office space high priced equipment, staff and then marketing and wait for the work to come...... it doesn't happen like that.
First rule of business keep the overhaed costs low and pay yourself. But it helps to have at least six months work lined up to keep things afloat
for awhile and any time you think you're too busy to market and get the next job is exactly when you need to.
i'm sort of out of work....wtf..... sorta got hit hard..... so, i'm looking for ANYTHING design/dwg related right now......
but it's part of the game i guess.....
but i have about 150 t-shirts in stock.....haha
Bump because this was a great thread and I want to hear about how things may have changed since 2008. I'm sitting in a cafe studying for the AREs pretending that reading this counts as studying. Work is slow at my firm right now so this seemed like a good time to start testing, but the main thing driving me is the idea of starting a firm in a couple of years.
On a side note, any of you all doing small development on the side as well? It seems Luke a scary thing to start, but the control of your work and chance to make money are pretty big incentives.
You need large capital for development, otherwise you will just be doing it for the bank if you are hoping to take out a large loan. Having said that, this is my goal as well, to one day do my own development.
wow - it's great to re-read these. i must have still had my old nom de-plume back then...
we've been up and running for 8 years now. and, finally (finally) it feels like we're starting to turn a corner. we've finally learned which projects to chase, which to leave alone, what kinds of people will work best in the studio, how to talk to potential clients, network, etc.
so, we're... poised. and, i'll say for myself, i'm as equally excited/intrigued/entrenched in the design of our practice, as i am about the projects we're doing and the clients we're working with. just focusing on providing that framework and team chemistry...
would love to hear how some of the others are doing as well...
we are doing larger work than when i first posted here which is nice. W are also working out the kind of office we want to be, which is probably more important than the work we do in some ways. still not settled by any means and that is frustrating at times. in this economy though, i am glad to still be around.
could those who replied state what type of work their firm takes on please? interiors, custom houses, renos, etc etc thanks
I believe two of the four recent reply(ee)s; Will and Gregory have direct link to their firm's website if your interested...
I'm raising a kid and starting a practice. When I was unlicensed I had work while I was finishing the exams. I got my stamp and my previous clients, every one of them, won't commission me as a licensed architect. Part of my day is hugs with magic unicorns and the other part of the day I'm sweating bullets about whether I can pull this off.