I am a licensed architect but I haven't worked in the field for five years due to raising kids and civic service. I have five years of professional experience prior to that.
I am looking to get back in the profession with part time work and had an offer from a former employer for contract work under his wife who runs a separate firm. I will share more details this week but I haven't done this kind of work agreement. Here is what I have so far:
She is licensed and insured.
She wants 12-24 hrs. a week, I suspect for drafting, modeling, and documents. Mostly remote.
I have a computer and would likely pay software subscriptions.
Should I have concerns on my end or can it be as simple as a cash for drawings deal? I would obviously pay taxes myself. Should I get insured professionally or from a business standpoint? Does anyone have experience with an agreement like this?
Thanks ahead of time.
bennyc
Mar 25, 24 7:04 am
Sounds pretty simple. You should have a simple contract for drafting services only and I don't think you need your own professional liability insurance, as that lies with the architect you are working for. Just make sure you have the fine print in your contract that you are not providing architectural service or liable for code / zoning but strictly drafting service under the supervision of another architect.
Your software subscriptions should be part of your overhead that's built into your hourly rate. Same with your taxes. You will most likely get issued a 1099 as an independent contractor.
Josh Mings
Mar 25, 24 9:36 am
It would be worth getting your own insurance - a $1 million general and professional liability insurance is pretty cheap given your anticipated revenue and easily baked into the rate you give them.
reallynotmyname
Mar 25, 24 11:59 am
I'm always puzzled by why small firm owners so frequently want to 1099 everybody working for them. It's really not expensive to hire employees properly and have ADP or Paychex operate your payroll and HR documentation functions.
kjpn
Mar 25, 24 1:01 pm
more paperwork, more taxes, and small firm owners may not be able to provide a full-time paycheck for long periods with certainty depending on their backlog
Chad Miller
Mar 25, 24 1:31 pm
I've read that it cost the average architectural firm around $30k to onboard a new person. This includes the reduced productivity and training that a new hire needs before they're actually being profitable for the firm. I don't know if that number is accurate but it may explain why small firms like to use 1099.
I work with a 12 person firm and we need a new hire to be at the firm for 18-24 months before we 'break even' and the person starts being profitable. We do spend more resources training people than the average firm so our timeframe is probably longer than 'normal'.
Richard Balkins
Mar 25, 24 2:58 pm
The reason is simple: There are too many architects in this profession. Supply and demand applies to every occupation even medical field. So if there are too many in the profession, there isn't enough demand to support everyone. Small firms, often sole-proprietors do not typically have employees. Here's why? They don't have a client base. Mostly the projects that would generate the revenue to support the need to hire more staff for often larger projects that either requires QBS based selection. This usually works against smaller firms for those public projects like schools, colleges, public hospitals, etc. Those not only would require the staff, if you don't have the staff, you aren't even on the list of potential choices to be selected.... in other pre-disqualified upon arrival in so many case. Most smaller firms works on smaller commercial and residential projects. Often private sector clients.
They also tend to only pick up a limited amount of projects. Enough work to for the one or maybe two architects. Most are sole-proprietors or maybe a married couple who are architects working together. Additionally, lets look at what is wrong financially to support hiring growth. In any business that regularly hires and grows (not just in architecture... I'm talking business which is the universal rule and "law" like Newton's laws of business) is an employers revenues are usually 3 to 5x or more than the collective cost of employees. Take a look at companies that has 1000+ employees as well as those with 100-500 employees. You might think those companies with 1000+ employees tend to pay crappy. That isn't always true but there is probably some truth to some extent in low entry level positions are paid close to minimum wage but they do increment up to higher pay. There is usually some pay ceiling with respect to the applicable positions and responsibilities. However, when you look at revenue, they make a lot. This establishes financial stability in many cases.
Architects need to charge maybe 1.5x to 2x or more, the amount they are currently, to be in stronger financial standing. Of course, the business of architects and designers would need to collectively (without making any documented agreement) towards increasing revenue to cost basis. This is so they can actually afford employees. The price ceiling of the profession are of our own making but it is of our own to change, too! We certainly, all would want more money for our work involved.
Wood Guy
Mar 25, 24 3:04 pm
I tried for years to hire architects and drafters but they all wanted to be subcontractors. Maybe because my workload isn't large enough to make them feel confident that I could keep them busy, or maybe they just like the variety of working with other small firms, or they like the tax advantages of self-employment.
Chad Miller
Mar 25, 24 4:03 pm
There are tax benefits from being self employed? Other than deducting part of your mortgage for a home office what other tax benefits area there? Serious question.
Wood Guy
Mar 25, 24 4:08 pm
Not just mortgage but a percentage of many home expenses, your computer and any relevant programs and subscriptions, the portion of mileage you drive for work, phone and internet, a percentage of any home maintenance (plowing, chimney cleaning etc.). If you set up filing as an S-Corp you don't have to pay payroll taxes on all of your earnings, only income tax. There are probably others I'm not thinking of.
I don't think that's the main reason I've had trouble finding employees but those were some of my reasons when I was a carpentry contractor and I know a lot of others who would say the same.
Hi everyone,
I am a licensed architect but I haven't worked in the field for five years due to raising kids and civic service. I have five years of professional experience prior to that.
I am looking to get back in the profession with part time work and had an offer from a former employer for contract work under his wife who runs a separate firm. I will share more details this week but I haven't done this kind of work agreement. Here is what I have so far:
Should I have concerns on my end or can it be as simple as a cash for drawings deal? I would obviously pay taxes myself. Should I get insured professionally or from a business standpoint? Does anyone have experience with an agreement like this?
Thanks ahead of time.
Sounds pretty simple. You should have a simple contract for drafting services only and I don't think you need your own professional liability insurance, as that lies with the architect you are working for. Just make sure you have the fine print in your contract that you are not providing architectural service or liable for code / zoning but strictly drafting service under the supervision of another architect.
Your software subscriptions should be part of your overhead that's built into your hourly rate. Same with your taxes. You will most likely get issued a 1099 as an independent contractor.
It would be worth getting your own insurance - a $1 million general and professional liability insurance is pretty cheap given your anticipated revenue and easily baked into the rate you give them.
I'm always puzzled by why small firm owners so frequently want to 1099 everybody working for them. It's really not expensive to hire employees properly and have ADP or Paychex operate your payroll and HR documentation functions.
more paperwork, more taxes, and small firm owners may not be able to provide a full-time paycheck for long periods with certainty depending on their backlog
I've read that it cost the average architectural firm around $30k to onboard a new person. This includes the reduced productivity and training that a new hire needs before they're actually being profitable for the firm. I don't know if that number is accurate but it may explain why small firms like to use 1099.
I work with a 12 person firm and we need a new hire to be at the firm for 18-24 months before we 'break even' and the person starts being profitable. We do spend more resources training people than the average firm so our timeframe is probably longer than 'normal'.
The reason is simple: There are too many architects in this profession. Supply and demand applies to every occupation even medical field. So if there are too many in the profession, there isn't enough demand to support everyone. Small firms, often sole-proprietors do not typically have employees. Here's why? They don't have a client base. Mostly the projects that would generate the revenue to support the need to hire more staff for often larger projects that either requires QBS based selection. This usually works against smaller firms for those public projects like schools, colleges, public hospitals, etc. Those not only would require the staff, if you don't have the staff, you aren't even on the list of potential choices to be selected.... in other pre-disqualified upon arrival in so many case. Most smaller firms works on smaller commercial and residential projects. Often private sector clients.
They also tend to only pick up a limited amount of projects. Enough work to for the one or maybe two architects. Most are sole-proprietors or maybe a married couple who are architects working together. Additionally, lets look at what is wrong financially to support hiring growth. In any business that regularly hires and grows (not just in architecture... I'm talking business which is the universal rule and "law" like Newton's laws of business) is an employers revenues are usually 3 to 5x or more than the collective cost of employees. Take a look at companies that has 1000+ employees as well as those with 100-500 employees. You might think those companies with 1000+ employees tend to pay crappy. That isn't always true but there is probably some truth to some extent in low entry level positions are paid close to minimum wage but they do increment up to higher pay. There is usually some pay ceiling with respect to the applicable positions and responsibilities. However, when you look at revenue, they make a lot. This establishes financial stability in many cases.
Architects need to charge maybe 1.5x to 2x or more, the amount they are currently, to be in stronger financial standing. Of course, the business of architects and designers would need to collectively (without making any documented agreement) towards increasing revenue to cost basis. This is so they can actually afford employees. The price ceiling of the profession are of our own making but it is of our own to change, too! We certainly, all would want more money for our work involved.
I tried for years to hire architects and drafters but they all wanted to be subcontractors. Maybe because my workload isn't large enough to make them feel confident that I could keep them busy, or maybe they just like the variety of working with other small firms, or they like the tax advantages of self-employment.
There are tax benefits from being self employed? Other than deducting part of your mortgage for a home office what other tax benefits area there? Serious question.
Not just mortgage but a percentage of many home expenses, your computer and any relevant programs and subscriptions, the portion of mileage you drive for work, phone and internet, a percentage of any home maintenance (plowing, chimney cleaning etc.). If you set up filing as an S-Corp you don't have to pay payroll taxes on all of your earnings, only income tax. There are probably others I'm not thinking of.
I don't think that's the main reason I've had trouble finding employees but those were some of my reasons when I was a carpentry contractor and I know a lot of others who would say the same.
Thanks for the info WG!
2023 tax year IRS info for 1099 folks is here:
https://www.irs.gov/forms-pubs...