i'll be finishing undergrad soon, and i do want to have my own practice someday. what's the best way to plan and prepare starting now. (i.e. business classes (mba?) and everything outside of theory aspects of arch)
much of the time, architects work for either builders or for developers. In the case of developers, the architect usually is the one who does most of the work. The developer puts up the $$$ for the project, and therefore sees the financial rewards (or lack of, if the project fails). It seems to me that if an architect can provide the capital for his or her projects, he or she can make more $$$ off of their effort.
I assume that if you want to have a profitable practice, you are mainly interested in doing comercial work.
Another way that you could make $$$ is by contracting all of your labor (autocad, models, renderings, etc) to people in India or China. This is already happening in some firms.
"Another way that you could make $$$ is by contracting all of your labor (autocad, models, renderings, etc) to people in India or China. This is already happening in some firms."
Isn't there a breakdown in the design / construction doc. process when this happens? ANyone have first hand experience with this scenario?
yup, a bit..
i think it is possble to make money without being commercial...its all about careful managing and being responsive to clients. and being responsive doent mean being commercial.there is obviously a way between yer average shopping mall and a floating bubble...but commercial architecture (as it is practiced today) is the worst thing that happen to the profession.
if the architect beomes a developer, he cannot undertake more than 1/2 projects at a time, and that would be the death of evolution for a practice.
outsourcing means a lower threshold of quality. I guess you should reduce the managing structure, avoid the fixed team structure and invest in technology, non-human resourches and CPD.
so to answer the question, it's management (take specific classes) and building trust relationship with clients. developers want to makemoney, and if you show them you can make them money, they will come back to you, there's no nedd to become their ho'
profitable practice may have been a little misleading...i want to get my designs built and make enough money without barely scraping by...may be that is a naive sentiment to begin with.
can someone explain>>>>>>>>>>>>>>>>I guess you should reduce the managing structure, avoid the fixed team structure and invest in technology, non-human resourches and CPD.
Find a mentor - successful architect/professor who can direct you to right direction. If you are passionate about practicing architecture, then do not dwell so much on monetary award at this time. It's a life long journey. Meanwhile, concentrate on getting your degree, and find a small architectural or Design/Build firms where you can start your internship & continue with your journey to become a great architect.
Suggested reading: Think & Grow Rich and The Purpose Driven Life.
Best Wishes!!!
have the lowest number of directors and associates. the average commercial practice has a ratio of 1 to 3 (that's 3 architects for every director/associate) while the design led practice has far less...
avoid the fixed team structure
make people work on different projects at the same time...
and invest in technology, non-human resourches and CPD
up to date cad systems, a working network, printing and all the other stuff, Continuated Professional Development (cpd)
if your postgrad uni offers a practice management course take it, this stuff will be a lot clearer.
on the side, pimpin and drug dealing are steady sources of cash to float trough those industry dipping times
Hi JdesP – To get a head start, the subject, can be read something like this:
“Architecture & Running a Profitable Practice?â€
“Architecture, Design, & Cash Flow?â€
“Got Archcash Flow?†… or… does your “Arch have No Flow?!â€â€¦ That’s a loaded question.
First let’s get one thing out of the way. Immediately, you strike me as an anomaly! (Architects all go into this profession worrying about one thing, and understanding the microeconomic forces at play in having your own firm, or even be willing to prepare yourself in being financially adept for when the time comes, well,…is as much of a priority as an intern yearning to get out of school and master the art of “commercial toilet room detailingâ€) …
If you already made a decision to be captain of your boat someday, then I also believe there are two (2) parts to your question, and ask yourself the following:
(a) How do I prepare myself, and somehow readjust that frame of mind?
(b) How do I run a profitable practice? (So after your first design is built, you cash in on the positive publicity, and you can continue doing what you love – because after all, you’ll need cash flow! ... or else back to Gensler, or MoJo & Associates you go).
For time sake, here’s the quick version. We can go on and discuss this one for hours, if not days.
From my 13 years experience, the best advice I have is to not even necessarily enroll in a particular business class, or buy a good accounting book as such – At least not yet. I believe there are a few things you must do first, that will be more lucrative and infinitely more valuable in the long run if you plan to pursue being CEO of your own Co. – whether to become big, or small.
If you want to pick up a good book, or sign up for a business class, that’s fine, but more importantly you have to start off with the following:
(1) Similar to the drive and conviction that constantly renews your commitment to your field (architecture), you must also have that attitude in understanding the nature of the business and profitably within our profession – and more importantly, as some will lament, the lack of profitably in our profession. (Unfortunately, that seems to be the norm). You have to really want it. Simply put, the sooner you begin to modify your approach and address this notion, that architecture as a practice IS A BUSINESS, then the sooner your odds increase in becoming successful.
(2) Just like we all want to start off our careers with a good design mentor, learning as much as you can from the best Project Manager (PM) is also invaluable – and there aren’t many in our field – and I’m speaking both of quantity, and quality. (In over 10 years, I’ve only met three!) Designers are dime a dozen, good PM’s are not! So if you can see past the shrubs of designers, I mean forest, and have identified a top notch candidate, then zoom in and latch on to that exceptional PM and become his favorite sponge! (NOTE: Did I mention having your own firm could almost assure you at best, a secondary or third spot as a designer?!)
(3) Whether on your own, or employed by a large firm – Don’t grow, Change! That means you cannot afford to simply master the art of being a well rounded architect, you must take on all the additional responsibilities (and accountability) to market, network, become innovative, stay informed of business trends, go after lucrative markets, build closer relationships with developers and contractors, etc.. At times, instead of going to that 13th design lecture, get out of that circle and go network elsewhere. (Design lectures are dime a dozen, catch the next one)… or join an affiliation of developers, or city officials, be part of urban expansion programs, etc. Surround yourself with the BEST people that have real contacts, and by that I mean establishing influential relationships that will eventually gravitate in your daily life, and you may become associated with a multi million dollar job vs. a 100k job without ever knowing it.
Heck, take GC classes, learn all material costs for each dollars/SF, and see who can manipulate the contractor next time you have a value engineering meeting! Begin to constantly keep an eye on the bottom line ($$$) – whether it is your project, or you’re part of a large team. (If in a large firm, this makes the difference between the 40 year old “Cad Jockeyâ€, and you, the 40 year old VP of Design, or VP of Management. They don’t preach, or even remotely expose this train of thought in architecture schools, nor should they have to. There’s simply no place for it, really, so it’s up to you to step it up).
Like everything else, it’s hard(er) work. You’re a mercenary; you’re not relying on company benefits and a steady paycheck. (Though I’ve come to the conclusion 3 years ago that benefits, and bonuses are overrated! – there’s no such thing, you pay for it one way or another. If you want to know more about that, I’ll be glad to tell you).
… freq_arch, …you made me think of something. Speaking of “Bang on Opusâ€, after having your fair share of traditional A or A&E firms, you may want to look outside the box and experience the dynamics of a Design-Build company.
This process is really about amalgamating the basic realities of design and construction. This is a successful approach only few large builders and developers provide, such as nationally renowned Opus and some other smaller firms that I’ve recently encountered are Marmol-Radziner and design & construction Management Company, DI Incorporated.
The appealing factor of Design-Build is its unique method of contracting under, which one entity performs the architectural, engineering, design, and construction combined.
In business terms, design-build translates to major cost savings as you engage a team early in the process, which subsequently saves you money in your design, timing and long lead items. This is a great learning experience as everything you will be exposed to – from start to finish – will be under one roof. That can be invaluable and even more so than working for a typical A&E firm if you want to be on your own soon.
Then if you want to go big, but safe and traditional in practicing your vocation, there’s the option to go back to the mother ship of all grand corporations, Gensler.…
To get a head start, the subject, can be read something like this:
“Architecture & Running a Profitable Practice?â€
“Architecture, Design, & Cash Flow?â€
“Got Archcash Flow?†… or… does your “Arch have No Flow?!â€â€¦ That’s a loaded question.
First let’s get one thing out of the way. Immediately, you strike me as an anomaly! (Architects all go into this profession worrying about one thing, and understanding the microeconomic forces at play in having your own firm, or even be willing to prepare yourself in being financially adept for when the time comes, well,…is as much of a priority as an intern yearning to get out of school and master the art of “commercial toilet room detailingâ€) …
If you already made a decision to be captain of your boat someday, then I also believe there are two (2) parts to your question, and ask yourself the following:
(a) How do I prepare myself, and somehow readjust that frame of mind?
(b) How do I run a profitable practice? (So after your first design is built, you cash in on the positive publicity, and you can continue doing what you love – because after all, you’ll need cash flow! ... or else back to Gensler, or MoJo & Associates you go).
For time sake, here’s the quick version. We can go on and discuss this one for hours, if not days.
From my 13 years experience, the best advice I have is to not even necessarily enroll in a particular business class, or buy a good accounting book as such – At least not yet. I believe there are a few things you must do first, that will be more lucrative and infinitely more valuable in the long run if you plan to pursue being CEO of your own Co. – whether to become big, or small.
If you want to pick up a good book, or sign up for a business class, that’s fine, but more importantly you have to start off with the following:
(1) Similar to the drive and conviction that constantly renews your commitment to your field (architecture), you must also have that attitude in understanding the nature of the business and profitably within our profession – and more importantly, as some will lament, the lack of profitably in our profession. (Unfortunately, that seems to be the norm). You have to really want it. Simply put, the sooner you begin to modify your approach and address this notion, that architecture as a practice IS A BUSINESS, then the sooner your odds increase in becoming successful.
(2) Just like we all want to start off our careers with a good design mentor, learning as much as you can from the best Project Manager (PM) is also invaluable – and there aren’t many in our field – and I’m speaking both of quantity, and quality. (In over 10 years, I’ve only met three!) Designers are dime a dozen, good PM’s are not! So if you can see past the shrubs of designers, I mean forest, and have identified a top notch candidate, then zoom in and latch on to that exceptional PM and become his favorite sponge! (NOTE: Did I mention having your own firm could almost assure you at best, a secondary or third spot as a designer?!)
(3) Whether on your own, or employed by a large firm – Don’t grow, Change! That means you cannot afford to simply master the art of being a well rounded architect, you must take on all the additional responsibilities (and accountability) to market, network, become innovative, stay informed of business trends, go after lucrative markets, build closer relationships with developers and contractors, etc.. At times, instead of going to that 13th design lecture, get out of that circle and go network elsewhere. (Design lectures are dime a dozen, catch the next one)… or join an affiliation of developers, or city officials, be part of urban expansion programs, etc. Surround yourself with the BEST people that have real contacts, and by that I mean establishing influential relationships that will eventually gravitate in your daily life, and you may become associated with a multi million dollar job vs. a 100k job without ever knowing it.
Heck, take GC classes, learn all material costs for each dollars/SF, and see who can manipulate the contractor next time you have a value engineering meeting! Begin to constantly keep an eye on the bottom line ($$$) – whether it is your project, or you’re part of a large team. (If in a large firm, this makes the difference between the 40 year old “Cad Jockeyâ€, and you, the 40 year old VP of Design, or VP of Management. They don’t preach, or even remotely expose this train of thought in architecture schools, nor should they have to. There’s simply no place for it, really, so it’s up to you to step it up).
Like everything else, it’s hard(er) work. You’re a mercenary; you’re not relying on company benefits and a steady paycheck. (Though I’ve come to the conclusion 3 years ago that benefits, and bonuses are overrated! – there’s no such thing, you pay for it one way or another. If you want to know more about that, I’ll be glad to tell you).
… freq_arch, …you made me think of something. Speaking of “Bang on Opusâ€, after having your fair share of traditional A or A&E firms, you may want to look outside the box and experience the dynamics of a Design-Build company.
This process is really about amalgamating the basic realities of design and construction. This is a successful approach only few large builders and developers provide, such as nationally renowned Opus and some other smaller firms that I’ve recently encountered are Marmol-Radziner and design & construction Management Company, DI Incorporated.
The appealing factor of Design-Build is its unique method of contracting under, which one entity performs the architectural, engineering, design, and construction combined.
In business terms, design-build translates to major cost savings as you engage a team early in the process, which subsequently saves you money in your design, timing and long lead items. This is a great learning experience as everything you will be exposed to – from start to finish – will be under one roof. That can be invaluable and even more so than working for a typical A&E firm if you want to be on your own soon.
Then if you want to go big, but safe and traditional in practicing your vocation, there’s the option to go back to the mother ship of all grand corporations, Gensler.…
many thanks for replying john and the good comment by opus.
i believe it is important to think about money. train yourself now, and by the time you're doing great design work, it's not a primary concern. it's my dream to be designing on my own(the gagging gesture is welcome now) and to really make it. it's like the musician constantly shopping his demo tape around, and looking for the right producer, the right record exec, the right showcase, and working two jobs to get by. i don't want to do that, though i do know it is a difficult process altogether. my logic is, why have someone sell your ideas, when it is in your reach to do it on your own.
Great comments, John E X !!! Just curiosity, are you still practicing architecture or are you doing something bigger & better? I am not being sarcastic. There is indeed a LIFE after being a poor Architect!
Jdesp: Take a year off and go see the rest of the world, or join the PeaceCorp. Don't get caught with architecture too much. You have rest of your whole life to play with that toy. Go see all those great architecture and make friends in other countries.
John E X, great comments, thanks. Once you've started learning from PM's and others around you, are there any books that you would recommend that have been helpful in running or understanding the business end of things?
Opus - Yes and no, I'm still practicing architecture, but at times, with a twist. I’ve made great relationships that allow me to devote my time as needed in the realm of PM and in the world of large scale Development - I guess not necessarily "something bigger & better", but with growth and more change, we should all hope for something better that is in fact bigger.
Opus, In fact, before claiming “independence†I did take a year off, but not to see the rest of the world, (simply because I did that before, and also while in school), but during my year off, I was determined to meet successful people and simply learn, listen and observe, and then while at it, plug in some shameless marketing! ... Only after "interviewing" people, did I decide what would be best for me, and never looked back ...
Dan & JdesP - I honestly cannot recommend any reading, directly influencing our profession in that sense, BUT, I will emphasize this again – After being part of a traditional Arch firm for awhile, go try your hand at a reputable good size larger scale design-build company for a year or two – or three!...
You’ll be amazed what you will gain in working for a period of time for a design-build outfit. Your experience will truly transcend from concept, to blueprints, construction, and finally, occupancy.
You will interact with all types of building professionals, you will get involved from schematic design, to preconstruction, construction management, general contracting, trade work, get involved or really understand estimating, purchasing, (why the SF of a building will shrink or explode on any given day!), design some more, you will learn the associated costs to design and material alternatives, hence detailing and design some more, you will understand the building permit process, you will learn why daily decisions made by certain people of power alter some aspects of the design, (or anything and everything!) and how do they change something for better (or worse! – part of reality), even learn to tolerate and understand the most uptight and stern superintendent or PM/ contractor, you will get your feet and hands dirty on the job site, then someday in a routine job site visit, you will see what you designed was a stupid detail and will promise yourself to never do it again, or do it better next time, another day you will witness the construction of the biggest cantilever design you were ever part of, and be amazed the 30 iron workers made it look cooler than what you had on paper, (and it’s still there 100 times larger than life the day after when you show up back to work!) – and best of all, if you’re with that D-B company long enough, you can honestly say you were involved in the entire process – from the first squiggle made on paper, to that last and final screw that was set in place on the stainless steel wall panel detail (that once all began from that ballbuster management and owner’s meeting).
…I did it after my 3 years out of school - Priceless.
You will truly understand “successful project delivery†as a business, which will only empower you to run a more successful architecture practice someday. (… If anyone tells you otherwise, they’re simply CEO of their own TPA Co. (Trace Paper & Associates), or they need to pull themselves back from excessive exposure to toxic fumes being released from that double lifetime subscription of GlossyArchDigest…)
There’s nothing like a good slab of concrete. Piece!
Good comments all around.....except for shipping the drafting off to India (no offense to anyone from India.)
Jdes P-
Another take, if you're set in finding a book to read or something along those lines, find a book about how architects "think" the traditional practice is run. The AIA puts out a book on starting a firm.
Architect's Essentials of Starting a Design Firm (The Architect's Essentials of Professional Practice)
Then as you go into a firm, you can compare how we think we do it to how we actually do it. Architects as a general rule (based on my observation at a couple of different sized firms) set themselves up for failure. This occurs primarily in client relationships and project management. We promise too much for too little, and as a profession we don't know that you don't make major schematic changes in construction documents. The ramifications of these types of changes eat whatever small profit margin got from the client. Those are just a few of my observations.
After making that comparison, apply your well developed design skills to that process and come up with a better solution. Think of innovations, pull ideas from other industries whether they are service oriented or not. I won't share my thoughts on changing the process, because you may some day be a competitor.
itg2: I've just came back from Hi-Tech industy to practice Architecture as my Hobby. I promise I won't become your competitor. So, please share your thoughts on changing the whole process. In other industries, the new technologies & processes become obsolute in every 12 month!!!!! Impress us with your thoughts, itg2.
For those of you who have gone out on your own, what sort of overhead items have you gone without or started off with. Someone here, I think, mentioned foregoing liability insurance and incorporation in the very beginning, for instance.
I'm just curious if anyone would like to share how they're minimized overhead.
itg2 - dead on... "Architects as a general rule set themselves up for failure". This is the reason I emphasized project management earlier. You do that portion right, your daily design issues are pure gravy, period!
It is important for all of us if we want to succeed financially in this profession, and grow as an industry as a whole, to change the current state of mind amongst architects.
Basically, if a client says "your effort for my 5,000 SF house is only worth $1,500", we need to all collectively say, "shove it", stand up, and walk away. (And that means your comrade next door should not suddenly perk up and say, "Oh! – I’ll do it for less than $1,000, sir!â€...)
Like in any industry, Supply & Demand does not necessarily equate to cheap and cheaper. The sooner this point is made, and we infinitely echo this as a group, the sooner you will all be working from, let's say, 40-60k to 80-100k per year for your many years experience and ongoing 60 hour+ weeks, etc. (Of course I cannot speak on behalf of large corporations, but then again, over time supply & demand is gold if everyone walked out from an interview when an insulting salary was proposed!).
And just to be clear, the reason I said it is important for all of us to succeed financially in this profession, is to allow sustainability in devoting our time to truly deliver high design, and not carry the daily burden of how will I keep this practice without next month’s rent.
Supply & Demand
(… at least we can begin to artificially inflate our fees collectively!)
For the record, I too did not share my thoughts on changing the process earlier, because I am a competitor.
I don't know about impressing anybody, but here's one thing.
The traditional territory of architects has been totally eroded. You have interior designers, environment designers, graphic designers, contractors, construction managers, envelope consultants (to name a few,) are all taking bites out of our traditional role. Each is encroaching into design, management, or construction. Yet we haven't changed how we do things. We let these portions of our profession go because we just want to design. Unfortunately it's the rare client who values the designer over the manager who is there to "save them money." That being said their are new facets of the process that are becoming more important, namely sustainability. We should be claiming ownership over this part of the process. I've already seen advertisements for LEED certified tract homes. We may have missed the boat.
Just one thought. The rest of them get written into my business model. As architects we should be competing by who can provide the best design, service, and quality, not who can do it the cheapest.
John EX
Cheers to that. Part of the problem is education. The average client doesn't know the difference between a $10,500 designer vs. a $1500 designer. The problem with Supply and Demand is that the client doesn't generally know what to Demand for design. To the vast majority of them a bunch arches in a colonnade are just as good as a wicked cantilever. How did our priorities get so far away from our client's?
Mum... to answer your question about overhead (might have been me who said the previous comments about insurance etc.), we started out with the lowest possible overhead - worked out of the bedroom, basically just paid for paper & ink and business cards...
We have slowly been investing in the office over time, and are now realizing that it would be very helpful if we actually had a cash reserve to be able to pay ourselves out of. We have no employees, so that helps - we put a certain percentage of what we earn into a "savings account" for overhead, and if we don't have the money to pay ourselves we wait until we can.
You don't really need to spend much to start up an office in our profession - the problem is keeping the cash flow going. So far we've been good at getting people to pay us (always bill regularly and remind the clients if they don't pay right away!), but you'll still always be at least a few weeks behind on billing and it gets complicated once you have several jobs going at once.
Our first real bit of overhead came with the cellphones and DSL, then we built an office in our backyard and bought a truck (financed by a home equity loan, gulp). We have just had to buy a new computer and some software, office furniture, etc., and we're looking at getting the insurance and incorporating within 6 months (add an acountant to that initial bit of overhead as well).
I would highly recommend sitting down with your partners (think you mentioned talking to friends about starting something) and figuring out how much you would need to be paid at a minimum, then come up with likely overhead costs and try to calculate how much you will need to be billing per month to make it work. From our experience it takes a while for the business to become profitable. It's realistic to assume you won't make much money at first and then you should try to determine how much you need to have saved up in order to survive for say, 3-6 months at a minimum. We could use an employee, for example, as we're getting quite busy, but we don't have the cash reserve to feel comfortable hiring someone full time. We also don't really want to take a risk on a part time person right now, but we'll have to sooner or later. The overhead is sort of a catch 22 in that the more people you have working for you, the more jobs you can take on and profit you can make, but the more you're having to spend and risking in the process. I think a lot of people make the mistake of expanding too fast and getting themselves into debt when they could take it slowly and it might work out better.
One more thing, we did get a company credit card after about 9 months, and it has been a huge help. I know there are also small business loans available from most banks but we're not there yet.The catch is that someone has to be personally responsible for guaranteeing it if you aren't incorporated. My feeling is if you take it slow and don't get into more debt than you would feel comfortable with individually, you'll be ok. Worst case scenario you get 10 or 15 grand into debt and the company doesnt work, so you go back to working for someone else and pay it off. At least in our business there seems to always be work out there one way or another.
Thought I'd make an overhead list while I'm at it:
stuff we put into company that we paid for personally or already had-
2 computers
fax machine
epson 11x17 printer
tools
desk & chair
phone bill
DSL
truck (one partner)
Licensing fees (contractor & architecture)
initial overhead shared by partners -
business cards
paper
ink
photo printer
accounting software
business license fee
monthly/regular overhead after a year -
cell phones
paper, ink, etc.
DSL
business how-to books, contract forms, etc.
accounting fees
office furnishings/supplies
new computer
part time workers (construction)
magazine subscriptions
design books
marketing (entertainment, photography, mailing)
future overhead -
more accounting (incorporation plus payroll)
insurance (general and professional liability)
more computers, better copier, printer, fax
rent or mortgage (hopefully) on office/shop & furnishings
employee payroll (including tax contributions, workers comp, vacation pay, etc.)
marketing (website, t-shirts, yard signs, mailings, etc.)
attorney fees
billed to clients -
plots, 11x17 prints
parking and mileage related to bldg dept and driving for job related stuff (not from our office to meetings or job sites though)
things two out of three partners are paying for (but tax deductible) -
truck (we also use it personally)
mortgage for new office (added value to home)
And don't forget lots and lots of work for no pay!!!
Thanks for all the info R.A. I'm still a long way off, but it's very kind of you to share all your information. There are a lot of things people don't think about that are necessary to doing business. The lots and lots of work for no pay is a little out of my league with a kid in college now though. I hope you have great successes with your firm!
I went to a seminar at my state AIA convention last year on "young firms." One of the statements that seemed to stick was one guy saying... "You can try to prepare but you will never be able to predict everything that might come up, you've just gotta do it."
Thanks Mum, maybe you'll be ready in 4 years :-) Didn't you say your son helped out with CAD at times? (or maybe I'm thinking of someone else...) - there's some cheap labor to tap into. Just kidding.
A - I totally agree, you kind of just have to go with it, esp. if you have no prior business knowledge (like us...)
My cheap labor decided the rest of his friends were taking August off before school starts back up so he's doing the same. He's hanging out with friends, becoming nocturnal and generally having a good time.
Oh to be young again.
Aug 17, 04 12:29 pm ·
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architecture and running a profitable practice
i'll be finishing undergrad soon, and i do want to have my own practice someday. what's the best way to plan and prepare starting now. (i.e. business classes (mba?) and everything outside of theory aspects of arch)
(thanks john)
mba
marry rich
become a builder
become a developer
mdler, can you elaborate on being a builder and developer... and let's assume marrying rich is not an option
much of the time, architects work for either builders or for developers. In the case of developers, the architect usually is the one who does most of the work. The developer puts up the $$$ for the project, and therefore sees the financial rewards (or lack of, if the project fails). It seems to me that if an architect can provide the capital for his or her projects, he or she can make more $$$ off of their effort.
I assume that if you want to have a profitable practice, you are mainly interested in doing comercial work.
Another way that you could make $$$ is by contracting all of your labor (autocad, models, renderings, etc) to people in India or China. This is already happening in some firms.
Isn't there a breakdown in the design / construction doc. process when this happens? ANyone have first hand experience with this scenario?
mdler
aren't u being a bit too simplistic (and stupid)???
yup, a bit..
i think it is possble to make money without being commercial...its all about careful managing and being responsive to clients. and being responsive doent mean being commercial.there is obviously a way between yer average shopping mall and a floating bubble...but commercial architecture (as it is practiced today) is the worst thing that happen to the profession.
if the architect beomes a developer, he cannot undertake more than 1/2 projects at a time, and that would be the death of evolution for a practice.
outsourcing means a lower threshold of quality. I guess you should reduce the managing structure, avoid the fixed team structure and invest in technology, non-human resourches and CPD.
so to answer the question, it's management (take specific classes) and building trust relationship with clients. developers want to makemoney, and if you show them you can make them money, they will come back to you, there's no nedd to become their ho'
"yup a bit" for the simplistic part, dont wanna offend anyone
so...capital, management classes, and building client relationships...
profitable practice may have been a little misleading...i want to get my designs built and make enough money without barely scraping by...may be that is a naive sentiment to begin with.
can someone explain>>>>>>>>>>>>>>>>I guess you should reduce the managing structure, avoid the fixed team structure and invest in technology, non-human resourches and CPD.
John(JdesP),
Find a mentor - successful architect/professor who can direct you to right direction. If you are passionate about practicing architecture, then do not dwell so much on monetary award at this time. It's a life long journey. Meanwhile, concentrate on getting your degree, and find a small architectural or Design/Build firms where you can start your internship & continue with your journey to become a great architect.
Suggested reading: Think & Grow Rich and The Purpose Driven Life.
Best Wishes!!!
Bang on Opus.
I guess you should reduce the managing structure
have the lowest number of directors and associates. the average commercial practice has a ratio of 1 to 3 (that's 3 architects for every director/associate) while the design led practice has far less...
avoid the fixed team structure
make people work on different projects at the same time...
and invest in technology, non-human resourches and CPD
up to date cad systems, a working network, printing and all the other stuff, Continuated Professional Development (cpd)
if your postgrad uni offers a practice management course take it, this stuff will be a lot clearer.
on the side, pimpin and drug dealing are steady sources of cash to float trough those industry dipping times
Hi JdesP – To get a head start, the subject, can be read something like this:
“Architecture & Running a Profitable Practice?â€
“Architecture, Design, & Cash Flow?â€
“Got Archcash Flow?†… or… does your “Arch have No Flow?!â€â€¦ That’s a loaded question.
First let’s get one thing out of the way. Immediately, you strike me as an anomaly! (Architects all go into this profession worrying about one thing, and understanding the microeconomic forces at play in having your own firm, or even be willing to prepare yourself in being financially adept for when the time comes, well,…is as much of a priority as an intern yearning to get out of school and master the art of “commercial toilet room detailingâ€) …
If you already made a decision to be captain of your boat someday, then I also believe there are two (2) parts to your question, and ask yourself the following:
(a) How do I prepare myself, and somehow readjust that frame of mind?
(b) How do I run a profitable practice? (So after your first design is built, you cash in on the positive publicity, and you can continue doing what you love – because after all, you’ll need cash flow! ... or else back to Gensler, or MoJo & Associates you go).
For time sake, here’s the quick version. We can go on and discuss this one for hours, if not days.
From my 13 years experience, the best advice I have is to not even necessarily enroll in a particular business class, or buy a good accounting book as such – At least not yet. I believe there are a few things you must do first, that will be more lucrative and infinitely more valuable in the long run if you plan to pursue being CEO of your own Co. – whether to become big, or small.
If you want to pick up a good book, or sign up for a business class, that’s fine, but more importantly you have to start off with the following:
(1) Similar to the drive and conviction that constantly renews your commitment to your field (architecture), you must also have that attitude in understanding the nature of the business and profitably within our profession – and more importantly, as some will lament, the lack of profitably in our profession. (Unfortunately, that seems to be the norm). You have to really want it. Simply put, the sooner you begin to modify your approach and address this notion, that architecture as a practice IS A BUSINESS, then the sooner your odds increase in becoming successful.
(2) Just like we all want to start off our careers with a good design mentor, learning as much as you can from the best Project Manager (PM) is also invaluable – and there aren’t many in our field – and I’m speaking both of quantity, and quality. (In over 10 years, I’ve only met three!) Designers are dime a dozen, good PM’s are not! So if you can see past the shrubs of designers, I mean forest, and have identified a top notch candidate, then zoom in and latch on to that exceptional PM and become his favorite sponge! (NOTE: Did I mention having your own firm could almost assure you at best, a secondary or third spot as a designer?!)
(3) Whether on your own, or employed by a large firm – Don’t grow, Change! That means you cannot afford to simply master the art of being a well rounded architect, you must take on all the additional responsibilities (and accountability) to market, network, become innovative, stay informed of business trends, go after lucrative markets, build closer relationships with developers and contractors, etc.. At times, instead of going to that 13th design lecture, get out of that circle and go network elsewhere. (Design lectures are dime a dozen, catch the next one)… or join an affiliation of developers, or city officials, be part of urban expansion programs, etc. Surround yourself with the BEST people that have real contacts, and by that I mean establishing influential relationships that will eventually gravitate in your daily life, and you may become associated with a multi million dollar job vs. a 100k job without ever knowing it.
Heck, take GC classes, learn all material costs for each dollars/SF, and see who can manipulate the contractor next time you have a value engineering meeting! Begin to constantly keep an eye on the bottom line ($$$) – whether it is your project, or you’re part of a large team. (If in a large firm, this makes the difference between the 40 year old “Cad Jockeyâ€, and you, the 40 year old VP of Design, or VP of Management. They don’t preach, or even remotely expose this train of thought in architecture schools, nor should they have to. There’s simply no place for it, really, so it’s up to you to step it up).
Like everything else, it’s hard(er) work. You’re a mercenary; you’re not relying on company benefits and a steady paycheck. (Though I’ve come to the conclusion 3 years ago that benefits, and bonuses are overrated! – there’s no such thing, you pay for it one way or another. If you want to know more about that, I’ll be glad to tell you).
… freq_arch, …you made me think of something. Speaking of “Bang on Opusâ€, after having your fair share of traditional A or A&E firms, you may want to look outside the box and experience the dynamics of a Design-Build company.
This process is really about amalgamating the basic realities of design and construction. This is a successful approach only few large builders and developers provide, such as nationally renowned Opus and some other smaller firms that I’ve recently encountered are Marmol-Radziner and design & construction Management Company, DI Incorporated.
The appealing factor of Design-Build is its unique method of contracting under, which one entity performs the architectural, engineering, design, and construction combined.
In business terms, design-build translates to major cost savings as you engage a team early in the process, which subsequently saves you money in your design, timing and long lead items. This is a great learning experience as everything you will be exposed to – from start to finish – will be under one roof. That can be invaluable and even more so than working for a typical A&E firm if you want to be on your own soon.
Then if you want to go big, but safe and traditional in practicing your vocation, there’s the option to go back to the mother ship of all grand corporations, Gensler.…
Hi JdesP –
To get a head start, the subject, can be read something like this:
“Architecture & Running a Profitable Practice?â€
“Architecture, Design, & Cash Flow?â€
“Got Archcash Flow?†… or… does your “Arch have No Flow?!â€â€¦ That’s a loaded question.
First let’s get one thing out of the way. Immediately, you strike me as an anomaly! (Architects all go into this profession worrying about one thing, and understanding the microeconomic forces at play in having your own firm, or even be willing to prepare yourself in being financially adept for when the time comes, well,…is as much of a priority as an intern yearning to get out of school and master the art of “commercial toilet room detailingâ€) …
If you already made a decision to be captain of your boat someday, then I also believe there are two (2) parts to your question, and ask yourself the following:
(a) How do I prepare myself, and somehow readjust that frame of mind?
(b) How do I run a profitable practice? (So after your first design is built, you cash in on the positive publicity, and you can continue doing what you love – because after all, you’ll need cash flow! ... or else back to Gensler, or MoJo & Associates you go).
For time sake, here’s the quick version. We can go on and discuss this one for hours, if not days.
From my 13 years experience, the best advice I have is to not even necessarily enroll in a particular business class, or buy a good accounting book as such – At least not yet. I believe there are a few things you must do first, that will be more lucrative and infinitely more valuable in the long run if you plan to pursue being CEO of your own Co. – whether to become big, or small.
If you want to pick up a good book, or sign up for a business class, that’s fine, but more importantly you have to start off with the following:
(1) Similar to the drive and conviction that constantly renews your commitment to your field (architecture), you must also have that attitude in understanding the nature of the business and profitably within our profession – and more importantly, as some will lament, the lack of profitably in our profession. (Unfortunately, that seems to be the norm). You have to really want it. Simply put, the sooner you begin to modify your approach and address this notion, that architecture as a practice IS A BUSINESS, then the sooner your odds increase in becoming successful.
(2) Just like we all want to start off our careers with a good design mentor, learning as much as you can from the best Project Manager (PM) is also invaluable – and there aren’t many in our field – and I’m speaking both of quantity, and quality. (In over 10 years, I’ve only met three!) Designers are dime a dozen, good PM’s are not! So if you can see past the shrubs of designers, I mean forest, and have identified a top notch candidate, then zoom in and latch on to that exceptional PM and become his favorite sponge! (NOTE: Did I mention having your own firm could almost assure you at best, a secondary or third spot as a designer?!)
(3) Whether on your own, or employed by a large firm – Don’t grow, Change! That means you cannot afford to simply master the art of being a well rounded architect, you must take on all the additional responsibilities (and accountability) to market, network, become innovative, stay informed of business trends, go after lucrative markets, build closer relationships with developers and contractors, etc.. At times, instead of going to that 13th design lecture, get out of that circle and go network elsewhere. (Design lectures are dime a dozen, catch the next one)… or join an affiliation of developers, or city officials, be part of urban expansion programs, etc. Surround yourself with the BEST people that have real contacts, and by that I mean establishing influential relationships that will eventually gravitate in your daily life, and you may become associated with a multi million dollar job vs. a 100k job without ever knowing it.
Heck, take GC classes, learn all material costs for each dollars/SF, and see who can manipulate the contractor next time you have a value engineering meeting! Begin to constantly keep an eye on the bottom line ($$$) – whether it is your project, or you’re part of a large team. (If in a large firm, this makes the difference between the 40 year old “Cad Jockeyâ€, and you, the 40 year old VP of Design, or VP of Management. They don’t preach, or even remotely expose this train of thought in architecture schools, nor should they have to. There’s simply no place for it, really, so it’s up to you to step it up).
Like everything else, it’s hard(er) work. You’re a mercenary; you’re not relying on company benefits and a steady paycheck. (Though I’ve come to the conclusion 3 years ago that benefits, and bonuses are overrated! – there’s no such thing, you pay for it one way or another. If you want to know more about that, I’ll be glad to tell you).
… freq_arch, …you made me think of something. Speaking of “Bang on Opusâ€, after having your fair share of traditional A or A&E firms, you may want to look outside the box and experience the dynamics of a Design-Build company.
This process is really about amalgamating the basic realities of design and construction. This is a successful approach only few large builders and developers provide, such as nationally renowned Opus and some other smaller firms that I’ve recently encountered are Marmol-Radziner and design & construction Management Company, DI Incorporated.
The appealing factor of Design-Build is its unique method of contracting under, which one entity performs the architectural, engineering, design, and construction combined.
In business terms, design-build translates to major cost savings as you engage a team early in the process, which subsequently saves you money in your design, timing and long lead items. This is a great learning experience as everything you will be exposed to – from start to finish – will be under one roof. That can be invaluable and even more so than working for a typical A&E firm if you want to be on your own soon.
Then if you want to go big, but safe and traditional in practicing your vocation, there’s the option to go back to the mother ship of all grand corporations, Gensler.…
many thanks for replying john and the good comment by opus.
i believe it is important to think about money. train yourself now, and by the time you're doing great design work, it's not a primary concern. it's my dream to be designing on my own(the gagging gesture is welcome now) and to really make it. it's like the musician constantly shopping his demo tape around, and looking for the right producer, the right record exec, the right showcase, and working two jobs to get by. i don't want to do that, though i do know it is a difficult process altogether. my logic is, why have someone sell your ideas, when it is in your reach to do it on your own.
Again, great insights John.
Great comments, John E X !!! Just curiosity, are you still practicing architecture or are you doing something bigger & better? I am not being sarcastic. There is indeed a LIFE after being a poor Architect!
Jdesp: Take a year off and go see the rest of the world, or join the PeaceCorp. Don't get caught with architecture too much. You have rest of your whole life to play with that toy. Go see all those great architecture and make friends in other countries.
John E X, great comments, thanks. Once you've started learning from PM's and others around you, are there any books that you would recommend that have been helpful in running or understanding the business end of things?
JdesP - You're welcome.
Opus - Yes and no, I'm still practicing architecture, but at times, with a twist. I’ve made great relationships that allow me to devote my time as needed in the realm of PM and in the world of large scale Development - I guess not necessarily "something bigger & better", but with growth and more change, we should all hope for something better that is in fact bigger.
Opus, In fact, before claiming “independence†I did take a year off, but not to see the rest of the world, (simply because I did that before, and also while in school), but during my year off, I was determined to meet successful people and simply learn, listen and observe, and then while at it, plug in some shameless marketing! ... Only after "interviewing" people, did I decide what would be best for me, and never looked back ...
Dan & JdesP - I honestly cannot recommend any reading, directly influencing our profession in that sense, BUT, I will emphasize this again – After being part of a traditional Arch firm for awhile, go try your hand at a reputable good size larger scale design-build company for a year or two – or three!...
You’ll be amazed what you will gain in working for a period of time for a design-build outfit. Your experience will truly transcend from concept, to blueprints, construction, and finally, occupancy.
You will interact with all types of building professionals, you will get involved from schematic design, to preconstruction, construction management, general contracting, trade work, get involved or really understand estimating, purchasing, (why the SF of a building will shrink or explode on any given day!), design some more, you will learn the associated costs to design and material alternatives, hence detailing and design some more, you will understand the building permit process, you will learn why daily decisions made by certain people of power alter some aspects of the design, (or anything and everything!) and how do they change something for better (or worse! – part of reality), even learn to tolerate and understand the most uptight and stern superintendent or PM/ contractor, you will get your feet and hands dirty on the job site, then someday in a routine job site visit, you will see what you designed was a stupid detail and will promise yourself to never do it again, or do it better next time, another day you will witness the construction of the biggest cantilever design you were ever part of, and be amazed the 30 iron workers made it look cooler than what you had on paper, (and it’s still there 100 times larger than life the day after when you show up back to work!) – and best of all, if you’re with that D-B company long enough, you can honestly say you were involved in the entire process – from the first squiggle made on paper, to that last and final screw that was set in place on the stainless steel wall panel detail (that once all began from that ballbuster management and owner’s meeting).
…I did it after my 3 years out of school - Priceless.
You will truly understand “successful project delivery†as a business, which will only empower you to run a more successful architecture practice someday. (… If anyone tells you otherwise, they’re simply CEO of their own TPA Co. (Trace Paper & Associates), or they need to pull themselves back from excessive exposure to toxic fumes being released from that double lifetime subscription of GlossyArchDigest…)
There’s nothing like a good slab of concrete. Piece!
Good comments all around.....except for shipping the drafting off to India (no offense to anyone from India.)
Jdes P-
Another take, if you're set in finding a book to read or something along those lines, find a book about how architects "think" the traditional practice is run. The AIA puts out a book on starting a firm.
Architect's Essentials of Starting a Design Firm (The Architect's Essentials of Professional Practice)
Then as you go into a firm, you can compare how we think we do it to how we actually do it. Architects as a general rule (based on my observation at a couple of different sized firms) set themselves up for failure. This occurs primarily in client relationships and project management. We promise too much for too little, and as a profession we don't know that you don't make major schematic changes in construction documents. The ramifications of these types of changes eat whatever small profit margin got from the client. Those are just a few of my observations.
After making that comparison, apply your well developed design skills to that process and come up with a better solution. Think of innovations, pull ideas from other industries whether they are service oriented or not. I won't share my thoughts on changing the process, because you may some day be a competitor.
Good luck.
itg2: I've just came back from Hi-Tech industy to practice Architecture as my Hobby. I promise I won't become your competitor. So, please share your thoughts on changing the whole process. In other industries, the new technologies & processes become obsolute in every 12 month!!!!! Impress us with your thoughts, itg2.
For those of you who have gone out on your own, what sort of overhead items have you gone without or started off with. Someone here, I think, mentioned foregoing liability insurance and incorporation in the very beginning, for instance.
I'm just curious if anyone would like to share how they're minimized overhead.
itg2 - dead on... "Architects as a general rule set themselves up for failure". This is the reason I emphasized project management earlier. You do that portion right, your daily design issues are pure gravy, period!
It is important for all of us if we want to succeed financially in this profession, and grow as an industry as a whole, to change the current state of mind amongst architects.
Basically, if a client says "your effort for my 5,000 SF house is only worth $1,500", we need to all collectively say, "shove it", stand up, and walk away. (And that means your comrade next door should not suddenly perk up and say, "Oh! – I’ll do it for less than $1,000, sir!â€...)
Like in any industry, Supply & Demand does not necessarily equate to cheap and cheaper. The sooner this point is made, and we infinitely echo this as a group, the sooner you will all be working from, let's say, 40-60k to 80-100k per year for your many years experience and ongoing 60 hour+ weeks, etc. (Of course I cannot speak on behalf of large corporations, but then again, over time supply & demand is gold if everyone walked out from an interview when an insulting salary was proposed!).
And just to be clear, the reason I said it is important for all of us to succeed financially in this profession, is to allow sustainability in devoting our time to truly deliver high design, and not carry the daily burden of how will I keep this practice without next month’s rent.
Supply & Demand
(… at least we can begin to artificially inflate our fees collectively!)
For the record, I too did not share my thoughts on changing the process earlier, because I am a competitor.
Opus
I don't know about impressing anybody, but here's one thing.
The traditional territory of architects has been totally eroded. You have interior designers, environment designers, graphic designers, contractors, construction managers, envelope consultants (to name a few,) are all taking bites out of our traditional role. Each is encroaching into design, management, or construction. Yet we haven't changed how we do things. We let these portions of our profession go because we just want to design. Unfortunately it's the rare client who values the designer over the manager who is there to "save them money." That being said their are new facets of the process that are becoming more important, namely sustainability. We should be claiming ownership over this part of the process. I've already seen advertisements for LEED certified tract homes. We may have missed the boat.
Just one thought. The rest of them get written into my business model. As architects we should be competing by who can provide the best design, service, and quality, not who can do it the cheapest.
John EX
Cheers to that. Part of the problem is education. The average client doesn't know the difference between a $10,500 designer vs. a $1500 designer. The problem with Supply and Demand is that the client doesn't generally know what to Demand for design. To the vast majority of them a bunch arches in a colonnade are just as good as a wicked cantilever. How did our priorities get so far away from our client's?
Mum... to answer your question about overhead (might have been me who said the previous comments about insurance etc.), we started out with the lowest possible overhead - worked out of the bedroom, basically just paid for paper & ink and business cards...
We have slowly been investing in the office over time, and are now realizing that it would be very helpful if we actually had a cash reserve to be able to pay ourselves out of. We have no employees, so that helps - we put a certain percentage of what we earn into a "savings account" for overhead, and if we don't have the money to pay ourselves we wait until we can.
You don't really need to spend much to start up an office in our profession - the problem is keeping the cash flow going. So far we've been good at getting people to pay us (always bill regularly and remind the clients if they don't pay right away!), but you'll still always be at least a few weeks behind on billing and it gets complicated once you have several jobs going at once.
Our first real bit of overhead came with the cellphones and DSL, then we built an office in our backyard and bought a truck (financed by a home equity loan, gulp). We have just had to buy a new computer and some software, office furniture, etc., and we're looking at getting the insurance and incorporating within 6 months (add an acountant to that initial bit of overhead as well).
I would highly recommend sitting down with your partners (think you mentioned talking to friends about starting something) and figuring out how much you would need to be paid at a minimum, then come up with likely overhead costs and try to calculate how much you will need to be billing per month to make it work. From our experience it takes a while for the business to become profitable. It's realistic to assume you won't make much money at first and then you should try to determine how much you need to have saved up in order to survive for say, 3-6 months at a minimum. We could use an employee, for example, as we're getting quite busy, but we don't have the cash reserve to feel comfortable hiring someone full time. We also don't really want to take a risk on a part time person right now, but we'll have to sooner or later. The overhead is sort of a catch 22 in that the more people you have working for you, the more jobs you can take on and profit you can make, but the more you're having to spend and risking in the process. I think a lot of people make the mistake of expanding too fast and getting themselves into debt when they could take it slowly and it might work out better.
One more thing, we did get a company credit card after about 9 months, and it has been a huge help. I know there are also small business loans available from most banks but we're not there yet.The catch is that someone has to be personally responsible for guaranteeing it if you aren't incorporated. My feeling is if you take it slow and don't get into more debt than you would feel comfortable with individually, you'll be ok. Worst case scenario you get 10 or 15 grand into debt and the company doesnt work, so you go back to working for someone else and pay it off. At least in our business there seems to always be work out there one way or another.
Thought I'd make an overhead list while I'm at it:
stuff we put into company that we paid for personally or already had-
2 computers
fax machine
epson 11x17 printer
tools
desk & chair
phone bill
DSL
truck (one partner)
Licensing fees (contractor & architecture)
initial overhead shared by partners -
business cards
paper
ink
photo printer
accounting software
business license fee
monthly/regular overhead after a year -
cell phones
paper, ink, etc.
DSL
business how-to books, contract forms, etc.
accounting fees
office furnishings/supplies
new computer
part time workers (construction)
magazine subscriptions
design books
marketing (entertainment, photography, mailing)
future overhead -
more accounting (incorporation plus payroll)
insurance (general and professional liability)
more computers, better copier, printer, fax
rent or mortgage (hopefully) on office/shop & furnishings
employee payroll (including tax contributions, workers comp, vacation pay, etc.)
marketing (website, t-shirts, yard signs, mailings, etc.)
attorney fees
billed to clients -
plots, 11x17 prints
parking and mileage related to bldg dept and driving for job related stuff (not from our office to meetings or job sites though)
things two out of three partners are paying for (but tax deductible) -
truck (we also use it personally)
mortgage for new office (added value to home)
And don't forget lots and lots of work for no pay!!!
Thanks for all the info R.A. I'm still a long way off, but it's very kind of you to share all your information. There are a lot of things people don't think about that are necessary to doing business. The lots and lots of work for no pay is a little out of my league with a kid in college now though. I hope you have great successes with your firm!
I went to a seminar at my state AIA convention last year on "young firms." One of the statements that seemed to stick was one guy saying... "You can try to prepare but you will never be able to predict everything that might come up, you've just gotta do it."
Thanks Mum, maybe you'll be ready in 4 years :-) Didn't you say your son helped out with CAD at times? (or maybe I'm thinking of someone else...) - there's some cheap labor to tap into. Just kidding.
A - I totally agree, you kind of just have to go with it, esp. if you have no prior business knowledge (like us...)
My cheap labor decided the rest of his friends were taking August off before school starts back up so he's doing the same. He's hanging out with friends, becoming nocturnal and generally having a good time.
Oh to be young again.
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