I think there were some previous threads on this...
In our case, 3 partners, 2 with 7 years experience, one with 4.5. General Contractor license and Architecture license obtained before "officially" starting company (though we worked for about 2 years on smaller side jobs beforehand).
We built an office in the backyard and furnished it using credit cards - started with NO capital other than credit cards... made it tough for the first year or so but now we are doing fine. Split into two companies for insurance purposes, one is a general partnership, one a corporation.
Last year we spent a large portion of money earned on furnishings, professional fees, insurance, etc. (50%?) We earned about 1/3 each of what we would make working for someone else... you do the math.
We are heading towards 2 official years of the company this summer and things are looking better than last year, however we fear that if the real estate market crashes we will be out of business ( a likely scenario in my mind here in southern CA) - people are already starting to hesitate and put off work until the fall because of fears of the market and cash flow issues.
It has been worth it for us for experience gained and because we prefer to work for ourselves, however if we are not able to consistently find clients with larger budgets (all our clients come from word of mouth) it will not make sense for us to continue for too much longer.
Having the licenses, and doing both design and construction has helped enormously with getting jobs - if we did not have these behind us we would not have enough work to survive. We have too much work to do ourselves, but not enough to hire someone full time (though we may hire this summer, depending on the way the winds blow), and it's very stressfull and all-consuming.
If you have a lot of connections to potential clients and confidence in yourself go for it - if you have little capital, few connections and little experience I would suggest waiting.
Started by myself out of my basement with 12 years of experience, licensed, had some clients who wanted to keep working with me after I left my previous firm. I didn't knwo this when I quit, it just worked out that way. I htought I would have to find all new clients. I grew that client list by word of mout. Mostly commercial work, some residential, which is still what we do today. Its been nine years, and I now have 16 employees. Hired first employee after about 4 months. Moved to an office building after about 1 year. Started with $2,000. I had a computer and some basic stuff. I bought a used copier, and a friend gave me an old blue print machine. I really bootstrapped it- iddn't even do stationary or cards except for those I printed on my computer for first 3 years, had no support staff for 4 years, etc. Made money from day one, and have paid for everything including state of the art equipment and software and office build out. Make about 5 times what I would have made if I stayed with my old company. However, I have about 32 times the stress and responsibility, and I work 50 hours a week minimum.
archie
just curious. what are your normal fees for most of the commercial projects you do. Are you providing structural and mechanical/elec. under your fee, or just arch.
We do everything either ourselves or with consultants to provide a full package. That includes engineering, structural, interiors, civil, landscape, and specialties like lighting design when needed. About 65%of our fees are on an hourly basis, mostly for clients who give us repeat jobs. This includes universities, school districts, owners of office buildings, restaurant owners, retailers, etc. The rest are fixed fees, never a percentage of construction. Sometimes we win really big on the fixed fees, sometimes we lose. For example, we had a fixed fee job where the fee was around $400,000, including our consultants. We made $100,000 profit. On smaller residential projects, we tend to break even, make a small profit, like 105 of the fee, or lose a bit. It's hard to make money at residential unless you invoice on an hourly basis, which is what we prefer. When we do, on bigger jobs, (over $500,000), our fees work out to be an average of 8% for full services. Smaller residential jobs, we need to charge around 12%, but again, the contract is usually hourly or fixed fee. Commercial fees are all over the place, depending on the type of work. For highly detailed small spaces like a restaurant, the fee is about 20%. Bio labs are around 15%. However, we've done big lawyer tenant spaces, multiple floors, for 3% due to the repetition.
Perfect example of why trying to start a residential-only company with few clients lined up is nearly impossible - I question whether it would have been better for us to wait until we had more experience and more connections - but then again if we had kids and decent jobs I don't know that we would have been willing to take the risk so easily.
r.a. - hang in. i've been out almost a year and only this month have the projects really begun to fall in line. and we are doing mostly residential and with clients who are going to give us some freedom to play within a good playground (maybe not what every hot sh*t avant garde person would like, but then we aren't the hot sh*t avant garde). we are hanging on financially, found a good space to work in, and will probably hire a person full time within the month and another part time on top of that. so, it does get better.
archie - sounds like you're in a place we'd like to be in 9 years.
toby - start up money: zero. some of the infrastructure (computers, printers, software) was acquired prior to starting. almost all of the work is through word of mouth, former clients, friends, etc. we didn't take any work from our previous employers (in fact, they just handed us a great residential commission and will probably continue to do so since it's a sector they will not do any work in). the big keys: know who your long term market is and make the networks you have work for you. we have our name out with almost everyone we know in certain sectors and that work will come our way one day. second: leave everywhere you go on good terms. burnt bridges extend way beyond the particular firm you work for. lastly, stay as lean as you can in the beginning and try as hard as you can not to go into debt. forgo that new aeron, g5 powerbook, and subscription to a+u. they all add up. spend on marketing and print material. skip a month of salary if it means you get to keep your best employee or hire the first one. make friends with a banker. (that alone will be a pipeline of future work.)
toby
Free advice is free advice.
Mine would be, to approach your business like you do your architecture. By this I mean plan, plan, plan. A business plan will answer question you ask here. Its tedious but necessary.
All respondants have good points, especially g-love.
Kiss your bankers ass. When you go in and open a business account, show them your plan. They will take you seriuosly.
I started out with computer, autocad, small, hp plotter, printer etc.
aprox 6k
I started a practice a couple years ago. I lucked out and found a developer who has kept me busy on large urban infill projects. i started out doing tenant finish work and have worked up to larger projects. So network you butt off.
We also build some of our projects, this is where bankers come in.
It can be difficult making a profit with residential, unless its resort stuff. At least in the area Im in.
thanks g-love, it's good to hear words of encouragement. it's easy to feel hesitant because having your own company is so uncertain, but it's also exciting and I don't regret it (not right now anyway). i don't consider myself much of a financial risk-taker, so that may be why i'm constantly looking over my shoulder, but the longer we're able to hang on the more likely we'll succeed. good luck to you too!
Now i understand the context is completely different but still helpful
About a year after I left grad school in a rather stagnant marketplace and local architects filled to capacity I found myself in a quandry. Luck would have it i was in the right place at the right time. I was at my old school, and answered a call for someone looking for assistance. They wanted to develop a section of land subdivided from their family plot (approximately 15 acres overlooking the city). She wanted some names of architects, but feared looking through the phone book. I offered to suggest some architects for her, as i was a recent graduate I didn't dare offer myself. Instead i told her to find the best fit for what she wanted I'd need to see the land - if she was willing ofcourse. Well she was thrilled by that.
I went up to the family house, past the LARGE gates - the lady turned out to be a rather famous musician. I kept my cool nonetheless and offered a few names for her to investigate and left her my number in case she had further questions. Well within a day, i recieved a call from her saying she offered my name and number to a friend, who was looking to do some work to their business...simple sketch design work, but that too grew into something else, and that into something else. I was really offering consultancy and was paid according - but it was satisfying no overhead, a simple one -man operation, just offering my thoughts and sometimes my skill with the pen or pencil.
I make this point simply to offer a bit of hope. The common thread i see with all the previous post is ther personal nature they treated their practices and the importance of networking - that should be your single great priority, that's where it all stems.
If there is a shortcut - I haven't seen it yet - or experienced it. I have been going it solo for 4 years now. It takes more than start-up capital or experience or even connections to get going - in any way that means anything. I have come to believe that it takes a clear understanding of what unique thing you have and want to offer plus the ability to articulate and market it. Your expectations are the first thing to go. Than comes the realization that it is all about the client's expectations. You have the awesome power to form them. So if you know what you want to do - and articulate it - and market it, then . . . well, I guess it was all about the ride anyway. Just once I'd like to be the arrow shot from the bow.
Work comes in all forms. some jobs you really have to work at getting and others fall in your lap. I always look at the job/ project in a couple ways ie. prominence of site ( will it be seen a lot ), is the client someone who builds more than once ( ie developer ), is the client well connected, does the project build on a base of preferred project types ie commercial work, medical etc. I pick jobs less on the fee but more on the continued job flow that may arise from the project. Now I can pick jobs because I have been on my own for about 10 years, and have a small office ( my choice ) but have good projects and great clients...no assholes.
I really think you have to look beyond every project to see if its a dead end or something than builds towards something greater. Ie if Donald Trump asked for a new deck off his guest house you'd try to do a good job because there's good chance something else will come from it. As simple as it sounds it works. I have received lots of work off a single client who recommended me to friends. ( I traced it back and I think I did about 6 houses off of one client who recommended to there friends )
It gets to a point if you work at it that you need not advertise, the work comes to you.
Hey whsitler- if you really are in whistler and need a partner-call me in 4 years! (have to graduate first) missed whistler/blackcomb this year, but my husband and i have been visiting for the past few years and are planning on going back for new years! love it up there!
Hey whistler- if you really are in whistler and need a partner-call me in 4 years! (have to graduate first) missed whistler/blackcomb this year, but my husband and i have been visiting for the past few years and are planning on going back for new years! love it up there!
very cool-my favorite run is harmony-love the views. actually broke my thumb on bear cub-tiny green-pretty dumb! hit the ice!
miss it though-we only went to santa fe this year for a weekend-which was some good snow actually-but we miss whistler.
drink one at the longhorn for me!
i've been on my own for about 14 months now. i had about 4 years experience when i decided to take the plunge. more desperation than anything else- i had to get out of the firm i was in. i secured a small renovation job and decided to use that to get out. it was premature, i never did any permitting, ca work, etc., but i was licensed. no money saved up, actually almost 60k in debt at the time. now i'm almost 80k in debt and i think i lost about 10 years off my life....
but its been worth it. after hitting some low points and overcoming an enormous learning curve, i finally have a lot of work and have gained the experience and confidence to convince clients to let me do 'experimental' work, and actually get a good fee out of it.
opening an office
How long did it take you to open your own office? Please elaborate on time frame, experience needed, cost, getting started.....
I think there were some previous threads on this...
In our case, 3 partners, 2 with 7 years experience, one with 4.5. General Contractor license and Architecture license obtained before "officially" starting company (though we worked for about 2 years on smaller side jobs beforehand).
We built an office in the backyard and furnished it using credit cards - started with NO capital other than credit cards... made it tough for the first year or so but now we are doing fine. Split into two companies for insurance purposes, one is a general partnership, one a corporation.
Last year we spent a large portion of money earned on furnishings, professional fees, insurance, etc. (50%?) We earned about 1/3 each of what we would make working for someone else... you do the math.
We are heading towards 2 official years of the company this summer and things are looking better than last year, however we fear that if the real estate market crashes we will be out of business ( a likely scenario in my mind here in southern CA) - people are already starting to hesitate and put off work until the fall because of fears of the market and cash flow issues.
It has been worth it for us for experience gained and because we prefer to work for ourselves, however if we are not able to consistently find clients with larger budgets (all our clients come from word of mouth) it will not make sense for us to continue for too much longer.
Having the licenses, and doing both design and construction has helped enormously with getting jobs - if we did not have these behind us we would not have enough work to survive. We have too much work to do ourselves, but not enough to hire someone full time (though we may hire this summer, depending on the way the winds blow), and it's very stressfull and all-consuming.
If you have a lot of connections to potential clients and confidence in yourself go for it - if you have little capital, few connections and little experience I would suggest waiting.
Started by myself out of my basement with 12 years of experience, licensed, had some clients who wanted to keep working with me after I left my previous firm. I didn't knwo this when I quit, it just worked out that way. I htought I would have to find all new clients. I grew that client list by word of mout. Mostly commercial work, some residential, which is still what we do today. Its been nine years, and I now have 16 employees. Hired first employee after about 4 months. Moved to an office building after about 1 year. Started with $2,000. I had a computer and some basic stuff. I bought a used copier, and a friend gave me an old blue print machine. I really bootstrapped it- iddn't even do stationary or cards except for those I printed on my computer for first 3 years, had no support staff for 4 years, etc. Made money from day one, and have paid for everything including state of the art equipment and software and office build out. Make about 5 times what I would have made if I stayed with my old company. However, I have about 32 times the stress and responsibility, and I work 50 hours a week minimum.
archie
just curious. what are your normal fees for most of the commercial projects you do. Are you providing structural and mechanical/elec. under your fee, or just arch.
We do everything either ourselves or with consultants to provide a full package. That includes engineering, structural, interiors, civil, landscape, and specialties like lighting design when needed. About 65%of our fees are on an hourly basis, mostly for clients who give us repeat jobs. This includes universities, school districts, owners of office buildings, restaurant owners, retailers, etc. The rest are fixed fees, never a percentage of construction. Sometimes we win really big on the fixed fees, sometimes we lose. For example, we had a fixed fee job where the fee was around $400,000, including our consultants. We made $100,000 profit. On smaller residential projects, we tend to break even, make a small profit, like 105 of the fee, or lose a bit. It's hard to make money at residential unless you invoice on an hourly basis, which is what we prefer. When we do, on bigger jobs, (over $500,000), our fees work out to be an average of 8% for full services. Smaller residential jobs, we need to charge around 12%, but again, the contract is usually hourly or fixed fee. Commercial fees are all over the place, depending on the type of work. For highly detailed small spaces like a restaurant, the fee is about 20%. Bio labs are around 15%. However, we've done big lawyer tenant spaces, multiple floors, for 3% due to the repetition.
Perfect example of why trying to start a residential-only company with few clients lined up is nearly impossible - I question whether it would have been better for us to wait until we had more experience and more connections - but then again if we had kids and decent jobs I don't know that we would have been willing to take the risk so easily.
r.a. - hang in. i've been out almost a year and only this month have the projects really begun to fall in line. and we are doing mostly residential and with clients who are going to give us some freedom to play within a good playground (maybe not what every hot sh*t avant garde person would like, but then we aren't the hot sh*t avant garde). we are hanging on financially, found a good space to work in, and will probably hire a person full time within the month and another part time on top of that. so, it does get better.
archie - sounds like you're in a place we'd like to be in 9 years.
toby - start up money: zero. some of the infrastructure (computers, printers, software) was acquired prior to starting. almost all of the work is through word of mouth, former clients, friends, etc. we didn't take any work from our previous employers (in fact, they just handed us a great residential commission and will probably continue to do so since it's a sector they will not do any work in). the big keys: know who your long term market is and make the networks you have work for you. we have our name out with almost everyone we know in certain sectors and that work will come our way one day. second: leave everywhere you go on good terms. burnt bridges extend way beyond the particular firm you work for. lastly, stay as lean as you can in the beginning and try as hard as you can not to go into debt. forgo that new aeron, g5 powerbook, and subscription to a+u. they all add up. spend on marketing and print material. skip a month of salary if it means you get to keep your best employee or hire the first one. make friends with a banker. (that alone will be a pipeline of future work.)
good luck...
toby
Free advice is free advice.
Mine would be, to approach your business like you do your architecture. By this I mean plan, plan, plan. A business plan will answer question you ask here. Its tedious but necessary.
All respondants have good points, especially g-love.
Kiss your bankers ass. When you go in and open a business account, show them your plan. They will take you seriuosly.
I started out with computer, autocad, small, hp plotter, printer etc.
aprox 6k
I started a practice a couple years ago. I lucked out and found a developer who has kept me busy on large urban infill projects. i started out doing tenant finish work and have worked up to larger projects. So network you butt off.
We also build some of our projects, this is where bankers come in.
It can be difficult making a profit with residential, unless its resort stuff. At least in the area Im in.
I love this thread.
thanks g-love, it's good to hear words of encouragement. it's easy to feel hesitant because having your own company is so uncertain, but it's also exciting and I don't regret it (not right now anyway). i don't consider myself much of a financial risk-taker, so that may be why i'm constantly looking over my shoulder, but the longer we're able to hang on the more likely we'll succeed. good luck to you too!
here's something else to add
Now i understand the context is completely different but still helpful
About a year after I left grad school in a rather stagnant marketplace and local architects filled to capacity I found myself in a quandry. Luck would have it i was in the right place at the right time. I was at my old school, and answered a call for someone looking for assistance. They wanted to develop a section of land subdivided from their family plot (approximately 15 acres overlooking the city). She wanted some names of architects, but feared looking through the phone book. I offered to suggest some architects for her, as i was a recent graduate I didn't dare offer myself. Instead i told her to find the best fit for what she wanted I'd need to see the land - if she was willing ofcourse. Well she was thrilled by that.
I went up to the family house, past the LARGE gates - the lady turned out to be a rather famous musician. I kept my cool nonetheless and offered a few names for her to investigate and left her my number in case she had further questions. Well within a day, i recieved a call from her saying she offered my name and number to a friend, who was looking to do some work to their business...simple sketch design work, but that too grew into something else, and that into something else. I was really offering consultancy and was paid according - but it was satisfying no overhead, a simple one -man operation, just offering my thoughts and sometimes my skill with the pen or pencil.
I make this point simply to offer a bit of hope. The common thread i see with all the previous post is ther personal nature they treated their practices and the importance of networking - that should be your single great priority, that's where it all stems.
Good Luck and Godspeed
If there is a shortcut - I haven't seen it yet - or experienced it. I have been going it solo for 4 years now. It takes more than start-up capital or experience or even connections to get going - in any way that means anything. I have come to believe that it takes a clear understanding of what unique thing you have and want to offer plus the ability to articulate and market it. Your expectations are the first thing to go. Than comes the realization that it is all about the client's expectations. You have the awesome power to form them. So if you know what you want to do - and articulate it - and market it, then . . . well, I guess it was all about the ride anyway. Just once I'd like to be the arrow shot from the bow.
Work comes in all forms. some jobs you really have to work at getting and others fall in your lap. I always look at the job/ project in a couple ways ie. prominence of site ( will it be seen a lot ), is the client someone who builds more than once ( ie developer ), is the client well connected, does the project build on a base of preferred project types ie commercial work, medical etc. I pick jobs less on the fee but more on the continued job flow that may arise from the project. Now I can pick jobs because I have been on my own for about 10 years, and have a small office ( my choice ) but have good projects and great clients...no assholes.
I really think you have to look beyond every project to see if its a dead end or something than builds towards something greater. Ie if Donald Trump asked for a new deck off his guest house you'd try to do a good job because there's good chance something else will come from it. As simple as it sounds it works. I have received lots of work off a single client who recommended me to friends. ( I traced it back and I think I did about 6 houses off of one client who recommended to there friends )
It gets to a point if you work at it that you need not advertise, the work comes to you.
Hey whsitler- if you really are in whistler and need a partner-call me in 4 years! (have to graduate first) missed whistler/blackcomb this year, but my husband and i have been visiting for the past few years and are planning on going back for new years! love it up there!
Hey whistler- if you really are in whistler and need a partner-call me in 4 years! (have to graduate first) missed whistler/blackcomb this year, but my husband and i have been visiting for the past few years and are planning on going back for new years! love it up there!
tiny d... yup! We're busy... come visit if you like, but not on a powder day!
any snow this april?
what kind of work do you all do?
All teh snow came late but we are sitting at about a 250cm base, snow up high is great and it falls off a bit at mid station.
We work all over with work mostly related to recreation, resorts and residential ( multi-family and single family ). Think wood!
very cool-my favorite run is harmony-love the views. actually broke my thumb on bear cub-tiny green-pretty dumb! hit the ice!
miss it though-we only went to santa fe this year for a weekend-which was some good snow actually-but we miss whistler.
drink one at the longhorn for me!
i've been on my own for about 14 months now. i had about 4 years experience when i decided to take the plunge. more desperation than anything else- i had to get out of the firm i was in. i secured a small renovation job and decided to use that to get out. it was premature, i never did any permitting, ca work, etc., but i was licensed. no money saved up, actually almost 60k in debt at the time. now i'm almost 80k in debt and i think i lost about 10 years off my life....
but its been worth it. after hitting some low points and overcoming an enormous learning curve, i finally have a lot of work and have gained the experience and confidence to convince clients to let me do 'experimental' work, and actually get a good fee out of it.
Well put D&C
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.