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Making Enough Money - Did You Do It? - On Your Own? - At a Firm?

BusinessPlan

I've been working as an architect for about 11 years. I always wanted to have my own practice, but as time goes on and I see how much work, time, stress, and liability are involved in architecture it's just not so clear to me anymore that it would feel worth the effort. I'm fairly confident at this point that I could do it, I even have a pretty likely client that I could start to build a practice with, but the question is whether or not I'd earn enough to make the effort feel worth it.

Has anyone on here reached a point in their career, either working for themselves or someone else and felt they were compensated an amount that felt abundant? That made the hard work feel worth it? Or that they could feel proud talking to others who work in other fields? Or that they could support a family without struggling? 

I have a huge amount of respect for other architects, especially those who do creative work. But it seems to me that if financial security is a primary motivator, it's always going to come into conflict with working in the profession. I think architecture is a profession where you need to get a huge amount of satisfaction from seeing your work built and be happy to sacrifice zeros on a paycheck to get it. I'm just not sure now, or in the future I will get that level of satisfaction without a financial reward. 



 
Jan 17, 21 12:17 pm
OneLostArchitect

I tried to strike out on my own and I struck out. 

Jan 18, 21 7:54 am  · 
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Non Sequitur

baseball is a boring game. Stick to hockey. (badum dish).

2  · 
Non Sequitur

I was once like you... lost and curious, but then I made a made a post on a public forum and asked for some anonymous wankers to guide me to the light.  It worked, and now I can proudly sit back with my feet on piles of gold doubloons as I watch as my prospective clients fight each other (cage match, preferably, using Eames chairs) for the privilege of my attention.

Snark aside, check with your state's prof association.  They likely have a section dedicated to small practice.  I know mine does and regularly have material and meetings on various things for new practices. 

Jan 18, 21 8:07 am  · 
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MDH-ARCH

I came to this realization very early. I graduated in 2015, got licensed by 2017 and went out on my own in 2018. Best decision I've ever made. Not easy but you have to be an entrepreneur / business person first. Grind, find creative ways to make new contacts, get leads, hustle and do whatever it takes. If you are okay with taking on not so glamourous jobs and focusing on the needs of the majority of people, you will get work. I mainly do residential and small commercial. Run a tight ship, I use remote workers and have a home office. I'm not making an absolute killing but I make more than I did working a full time job and have way more free and flexible time. I'm hoping to be making around 250k in the next 4-5 years. That may not meet everyone's needs but for a single guy in his early 30's, I'm very happy. Good luck!

Jan 18, 21 8:49 am  · 
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md82-nat

I've been on my own and am far, far from getting to that kind of salary, if you're able to get there, mazel tov! May I ask where you find your remote workers and how is that working out for you?

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MDH-ARCH

I'm shooting for the stars with my 250k goal but 100k was very attainable, so I imagine in 5 years with more work, higher fees, and more efficiency, It should totally be achievable. I use a handful of moonlighters. We share files via google drive, I do all the measuring and heavy lifting and have help drafting. I still double check everything and modify accordingly but I find as long as you are very clear with your expectations and deliverables, it is a major help.

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sameolddoctor

The first 100k is attainable, but the next 150k is very tough. There are partners in large offices that make 250k when they are in their 60s... Anyways, good luck to you!

1  · 
bowling_ball

Exactly. Want to double your $100k salary? Work three times as hard. It's just math.

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sameolddoctor

Its like taking a car to 100mph is attainable, but taking it to 150mph into racing car territory

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Someone should start a thread just of information on when someone got to the first $100k. What year (100k in the 90s is different than 100k in 2020)? How long were you out of school? Were you licensed? How long had you been licensed? Was it a raise? Did you change jobs? Did you own your own firm? What is was your role? Did you go up or down from there? Others? Might help people plan out their careers or something if they can see more examples of people that attained 6 figures and the conditions that led there (not that 6 figures is required to be considered successful or anything). 

Same type of thread should be created for paying off student debt. 

Also for retirement savings (what's a good first benchmark there? 1/4 million? 1/2 million? 1 million?).

3  · 

ok, I did it myself ... Money Central

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Wood Guy

What I've learned is that if you can get profitable jobs, and get those jobs completed in a timely manner, you can make a decent living. After six years of self employment as a residential designer (doing architect-level work) and a few years at a small firm before that, I've found that I'm good at getting non-profitable jobs but not great at getting profitable jobs, or getting them done in a way that would make me a lot of money. I do fine, I just see that a lot of things need to line up to reach a high level of financial success. Many of those things can be learned or delegated, which is my current path and this year should be the best in a while. I find self-employment to be more secure than being an employee, with more opportunity to make a lot of money, but also plenty of opportunity to make little money. 

Jan 18, 21 9:38 am  · 
1  · 
RJ87

Two part answer:

As with most other professional careers having your own practice is where the money is. You're able to prosper in the good times but also have to be prepared for the lean years when you're paying employees but not taking much home yourself. The good years, however, can more than make up for that if you set up a strong base.

The median household income in the United States is just over 68k. Architecture as a profession, while perhaps slightly misunderstood, is still a pathway to a "secure" lifestyle if you continuously work for someone else. Relatively speaking 80k-90k is well off comparatively.  I've always viewed working for someone else as a safety net, not an end goal.

Jan 18, 21 10:42 am  · 
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sameolddoctor

68k for the whole of the country. In urban areas, where most architecture jobs are, the median is quite a bit higher, and thats where architects struggle the most..

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RJ87

I've always leaned towards the idea that living in an urban area comes with inherent sacrifices. Economics tells us anywhere that a large number of people want to live will inherently be more expensive. It is what it is, if someone wants more for the same amount of money live somewhere else.

It will be interesting to see how this past years events change working situations as corporations downsize office space.

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mightyaa

Not just skipping paychecks as a owner... With economic collapse, you are giving personal loans to the company. You've got expenses like rent, utilities, etc. regardless if you have checks coming in. Additionally, you might be securing corporate loans with personal assets like your house for something large like a construction loan. So it isn't boohoo, I only get $5k this month; it's having a discussion with your wife to loan the firm $20k to float the firm for a month.

1  · 
mightyaa

Oh.. there are other large risks as well. Clients might be continually late in invoicing. So, since you invoice for work done the prior month, and they've got 30 days, and are late... roughly you lag 2-3 months behind when your employees want paid. Occasionally, as in 4 times to me in 20 years, a large project client will suddenly decide to not pay the last few invoices when they ran out of money. So you are floating tens of thousands until resolved because all your employees, bills, and consultants you have paid. That money hopefully comes out of your corporate reserves if you do it right... otherwise, it is your own pocket.

1  · 
mightyaa

Hence why I absolutely agree being an employee is a safety net. The worst that can happen is you lose your job and have to find another.

2  · 
RJ87

Agreed, many folks often underestimate the capital required to just keep the doors open every year. Salaries, Office Space, Supplies, Insurance, etc. Reserves are definitely key to managing the potential delay in cashflow.

1  · 
thisisnotmyname

Even if your firm is just you working by yourself from home, you need to have enough cash to cover 3-6 months of all your expenses in order to get through lean periods.

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Rusty!

I have plenty of arch friends who decided to go on their own, especially architects married to other architects. I can not tell if they are one week away from being homeless or a week away from retiring as millionaires. It strangely feels like both... Observed from outside it feels like a perpetual state of crisis management. Instability is a reward of sorts.

Does working for yourself make you slightly nutty? More like certified insane. Trick is to know when to walk away before your boss completely ruins you as a human being. Nothing wrong with mouse potato life at the expense of other people's sleepless nights. Steady paycheck is like a weighted blanket. Keeps you comfortable but also prevents you from reaching them ceiling stars. There you are and it's gonna be OK. shhhhh. Eyelids are getting heavy. It's sleepy time...

Jan 18, 21 6:02 pm  · 
2  · 
citizen

Better to be slightly nutty than nightly slutty....

The firm vs. solo practice debate may be the most common for architects among all the professions. I've never heard a reliable formula for successful solo practice. I think a tremendous amount rests on personality traits and the local market.

3  · 
Rusty!

High risk high reward life! In reality you will figure out that new ceiling pretty quickly and it may be all you ever dreamed of.Or it may be a completely underwhelming endeavour not worth the additional headache. Only one way to find out. You owe it to yourself to try!

2  · 
square.

one of the best and worst aspects of the architecture small firm model is the continual birth and death of these offices. good: they produce some innovations, fresh ideas, energy, etc. bad: an exorbitant amount of energy is put into building these practices from scratch, often to see all of the work die with the end of the office.

3  · 
Wood Guy

Square, that's a good point. Do you know of any franchise models to architectural or design practice? That would be one way to leverage the systems created. Another is to sell the system, like this architect not far from me does: https://thirtybyforty.com/.

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square.

30x40 model seems interesting.. the need to reinvent the wheel every time isn't necessary, but there are too many egos.

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Wood Guy

Funny, I almost mentioned reinventing the wheel. For those of us who didn't follow a typical or linear path and can't steal/borrow all of our systems from our previous employers, I don't know how else to do it.

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msparchitect

"Steady paycheck is like a weighted blanket. Keeps you comfortable but also prevents you from reaching them ceiling stars." - this is the best thing I've ever read on Archinect

1  · 
mightyaa

What is great about being a firm owner; you decide… but those choices will have ramifications. If you want a huge salary, you’ll need to build a big firm.  That means you will do nothing but deal with fires or landing work… not designing, not creating, not mentoring, etc. that you want to do. Your day also doesn’t end; evenings are boards, commissions, networking events, and more work stuff like reviewing  insurance plans, writing office policy, and the crap you didn’t get to during the day.  That may not be what you want to do with your life.  So, you can refuse; stay small, and live with a flexible salary that may be less $$ than you really want, but you can leave a 3 and coach your kid’s soccer team. But you won’t own a beach house or get rich.

Being an employee is easier. Expectations are pretty much given. You don’t do the business stuff or worry about whom to let go. You can rely on that paycheck showing up for a set amount. You are handed things to do rather than having to go out in the wild and landing work yourself to keep you busy.  But you won’t make as much… probably… and you don’t have much say.

That said, as a firm owner I normally made $120k average (there were significant ups and downs into negative salary) since the mid-90’s. As an employee since 2015; I’ve been a steady $115k with half the headaches. The loss of control (need approval, permission and being overridden) is the only thing I truly miss.  I can’t even call out the bullshit.

Jan 19, 21 2:26 pm  · 
5  · 

I've been able to manage as an employee. I don't really have a desire to go out on my own. I'd probably make more if I went out on my own, but I'm doing pretty well for myself where I'm at. I've been able to leverage specialization and technical knowledge to be making what I feel is good compensation for myself. I don't feel I've had to sacrifice zeros on a paycheck in order to feel proud or satisfied in my work either. 

Am I swimming in cash? No, but I can support my family, I feel secure financially, and I will probably be in a place where I can enjoy retirement in a few decades. It's all relative though as I've seen peers making more than me, but they feel less secure financially due to debt and other expenses they've taken on. I've also seen peers who make less than me who probably feel more secure financially and have made different choices in life that wouldn't work for me or my family (in some ways I envy them). 

Jan 19, 21 2:36 pm  · 
1  · 
whistler

I had worked for several years in a large urban centre at medium scale firms ( 15-21 staff ) doing a fairly high level design work on everything from towers to community projects.  Slowly moved my way down to smaller scale firms with less than 10 staff and on two smaller scale projects.  Left the city and started my own firm after the office I was working at lost a couple projects and had to cut everyone to 1/2 time.  I was convinced the owner royally fucked up and vowed I would never work for anyone else again, I wanted to be the one in control of my own success or failure. I started doing renos and small residential projects like most young firms.  I think what really helped was what I learned in the larger more corporate styled offices for approach and organization.... I was a small office but I processed and organized my self like a corporate entity.  Kind of a mind set,  but I was taking jobs from day one that made money and always looking at projects that could be profitable or I could use to market myself with.  IE I designed the Mayors house on a corner lot in a new subdivision. Made money but not a ton and did a nice simple design that I probably got ten jobs from because it was nice looking and everybody saw it.  

I took or went after work that opened me up to new funding streams ie government work, first nations, industrial work nothing huge but helped to expand my network of people and contacts.  Never gone after SF family residential as it is probably the only sector where it is really difficult to make money as there is almost zero ability to be efficient with your project delivery.  I am not advocating for cookie cutter design but think about how you can be efficient.  Nowadays I only take work where I know we can add value, make a profit and grow the office.

From day one I was making more than what I ever did working for anyone else.  Yes there was more stress and fear in knowing where my paycheque was coming from but I turned those into drivers for working hard, going after work and do work that I respected.  Lots of shitty days along the way but I still get up and look forward to coming to work everyday.

Financially the journey has been very good to my family and I have kept a 4-6 person office humming along for nearly 25 years.  I hired my first staff after I was working 60 hrs / week and had a solid 6 months worth of work out in front of me and hired my second staff member when I had a years worth of work and added staff after that based on work load and project type. We typically have 2 years worth of work in front of us and haven't been below 1 years worth of work since 2009. Even last year we didn't loose any projects just pivoted to a few smaller projects while clients evaluated the long term plans on the larger multi-year projects or turned to planning projects that have a longer horizon. 

Closing in on retirement 5 years out +/- and starting to think about which kind of projects I want to take but turn down the same kind of projects I took when i was starting out. Generally pass those clients on to other young architects who I had previously employed hoping that they see the value in doing that kind of work.  Never took projects based on what I was going to make, only on what the project offered the office in terms of design, client interest and benefit to the community.  The money always came, still have to chase the occasional invoice but those are thankfully pretty rare.

You require a thick skin and a decent nose for business but more of a street sense for knowing when you can be risky vs conservative and just try and do good work, and never be afraid to say no to clients or jobs that make you feel uncomfortable.

Jan 19, 21 5:38 pm  · 
2  · 
atelier nobody

I'm very comfortable with my income. I could have been comfortable with my income a lot sooner if I hadn't had the money management habits of a drunken sailor.

I have about 25 years of experience, mostly in medium to large firms (currently a VERY large E/A/C company), with a few years detour as a municipal plan checker and about 1.5 years in construction management.

I have, of course, thought about hanging out my own shingle - even went as far as registering a DBA, getting an internet domain name, and a business bank account. Thing is, I'm not very good at marketing myself. To date, net revenue in atelier nobody's (the name of "my firm") best year was <$10K, and I've resigned myself to it never being more than the occasional side job and maybe retirement gig.

Jan 19, 21 6:17 pm  · 
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tintt

I'm making it work. Nothing glamorous, small jobs but I like it a lot. I get paid quite a bit more than I would if working in a firm especially if I was working in a firm doing similar work and not a corporate gig on big jobs but there are no benefits. I work less than full time and only when I want on projects I choose which is my benefit.

Jan 19, 21 7:33 pm  · 
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luvu

Having been working in large offices in the past ten years, realistically it's a very slim chance that I can strike out on my own given my previous experience specifically on large scale public/commercial buildings. Besides, I have zero interest in residential architecture which seems to be the only viable pathway to set up my own practice.

At the end of the day, the quality of work /decent pay with reasonable career progression keep me where I am now. Who knows what will happen tomorrow.

Jan 19, 21 8:15 pm  · 
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sameolddoctor

Yes, I am kinda in the same boat. The only problem is that in large corporate setups, once you are of a certain age, you kinda stop advancing career wise, or are put to pasture real quick.

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