Archive for the 'Strategy' Category

10 Ways Architects Can Make More Money

medium_4052671706

To successfully complete a project, an architect is responsible for making thousands of critical decisions. To complete the development of a standard residential additions and alterations project, it takes several months of focus and dedication. Many of us work long hours, long into the night, through weekends and holidays.

The innovative ideas and concepts we create can often only be born after hours (sometimes days) of intense thought and several dozen layers of sketch paper. The personal emotion, attachment and dedication that each project receives is unequaled in any other profession.The time and effort required to properly develop a design and complete a thorough set of construction documents is difficult for most anyone outside the profession to understand.

As a requirement for licensure, registered architects are responsible for the health, safety and welfare of every occupant in every project we design. Like any small business, architects must pay the typical operating expenses required to remain buoyant, such as utilities, professional service fees, consultants’ fees, insurances and several other overhead expenditures. But wait… for architects, there’s more. To protect us from the liabilities inherent in our responsibilities as licensed professionals, most architects also purchase an additional Professional Liability insurance policy costing several thousand dollars each year.

Then, there’s that little thing called profit.  Every business, including architecture firms (yes, its true!), must earn a profit. It’s one of the rules to “the game”. In order to continue pursuing our success as architects, we must not only cover our expenses and take home a salary, we must make enough to reinvest into the business.

Most sole proprietors and small firms I know, struggle to meet the minimum requirements of operation. Forget about profit.

Simply stated… Architects just don’t make enough money.

We deserve to earn more. So, in the spirit of pursuing our passion and attaining the success we dream of, I have compiled the following ten ways architects can make more money.

Additional Services. Every architectural services agreement should include a section on Additional Services. These are services available to your client, but are NOT included in your basic architectural services.

Are you giving away services that you should be compensated additionally for? Many architects are doing just that.

In our Agreement for Architectural Services at Fivecat Studio we clearly identify several Additional Services. Services such as Existing Conditions Surveys, Interior Design, Kitchen Design, 3-D Modeling, Illustration, Rendering and Estimating are all offered to our clients as additional services.

Construction Services. Since we launched our firm in 1999, most every prospective client I meet asks if Fivecat Studio offers construction services. Many people have the perception that architects build buildings and many others wished they would. So, in 2007 we stopped saying no and launched our Construction Management Services. In doing so, we more than doubled the revenue we collect from each project for which we perform these services.

Through the years we have learned that not every project and not every client is a good fit for these services though.

If we feel that the project and the client are compatible, we offer Construction Management Services as an Advisor, not as Constructor. It is important to differentiate the difference between the two services. I will publish a more thorough post on this topic in the future,  but the basic difference is in the agreements between the owner and the multiple contractors. As an Advisor, the contracts are direct between the owner and contractor. The architect is responsible for managing costs, sequencing, scheduling and payments. The full liability for the construction falls upon the contractors. The architect is simply an agent to the client with no liability for the construction.

As a Constructor, the owner contracts directly with the architect for construction services. The architect is then responsible for constructing the building, hires the contractors directly and inherits the associated liability. More liability means more liability insurance, which increases your firm’s expenses and your firm’s exposure to legal action. Until the volume and revenue from our CM Services allow for more investment in growth, we will stick with offering Construction Management Services as an Advisor.

Selection of Fixtures and Finishes. During the Design Development Phase of each project, we provide our clients with a “shopping list” and contact information to suppliers and sales people we know, like and trust. While our clients shop, we develop the design. We are always available to support them, answer any questions and guide them in selecting items appropriate for our proposed design.

In the case where a client would rather not be responsible for this task, we offer the selection of fixtures and finishes as an Additional Service and take on the full responsibility for the choosing these items.

Each client is different and their desired involvement in the process varies. Offering multiple ways for this process to occur keeps each client happy and allows for the firm to be properly compensated for the additional work required to perform the task.

Purchasing and Delivery. Once all the fixtures and finishes are identified, we then document the selections and include their specifications in our Construction Documents. During construction, the purchasing of these items is the responsibility of the contractor, or the owner purchases the items themselves prior and furnishes them at the appropriate time.

As a courtesy to our clients, we offer a Purchasing and Delivery Service which makes the acquisition of these items our responsibility. The additional attention assures our clients that the items ordered will be correct and delivered on time.

This process takes lots of time and effort. It is not typically the responsibility of the architect to perform this service and if you take on the additional work, you should get paid for it. Although, that does not necessarily mean that it should cost the client much more.

Fivecat Studio is compensated for this service as a percentage of the cost of the items we are handling. We then forward all our trade discounts to the client, which will often equal the amount that we are being compensated for the service. The client has less responsibility, the order is properly handled, we make more money and the client pays little or no more than they would have without our involvement. It’s the classic “win-win” scenario.

Sell Products. There is an alternative approach to the Purchase and Delivery Service described above. You can purchase the products at the your discounted trade price, mark up the price to cover your time and effort to handle the transaction, include an amount for profit and offer the products selected by your clients at their full retail price.

Most every project includes lighting, plumbing fixtures, furnishings, accessories and finishes such as tile and stone. Who better to sell those products to your client than you?

Reimbursable Expenses. Most architectural service agreements identify out-of-pocket expenses that will be reimbursed to the architect, separate from and in addition to compensation. Many architects though do not keep a record of these expenses and therefore, do not properly collect the amounts owed to them for the project-related expenditure.

Quantify your reimbursable expenses and collect.

Reduce Waste. This one may be the easiest way to make more money. It does not require performing any additional work and there’s no waiting for clients to pay you.

Prepare a thorough evaluation of all the money your firm spends. Categorize the list into “required”, “not required” and “waste”. Spend only what you need to grow, eliminate waste and end up with more money each month.

Monetize Your Website. Most architects have websites to market our firms. If you don’t… you should. We built Fivecat Studio from the ground up, with no money and no clients, using our first website. There is no way that we would be where we are today without fivecat.com.

Most firm websites includes basic contact information, a bio describing the firm and a portfolio of select projects. With any amount of traffic, you can add features to your site and start making some additional money to supplement the services your provide as an architect. As an expert, you can offer e-books for sale. Prepare a Resources page with affiliate links to items or services for sale that people visiting your site will find useful. You can also sign up for Google AdSense and make money through advertising on your site. If designed well and presented properly, your site can become a source of additional income for your firm.

The more traffic visiting your website, the more money you can make. Continuously updating your site with new work and additional information can help attract visitors. Adding a blog and consistently writing on a topic interesting to a niche market (say maybe “custom residential additions and alterations”) can help to create a following and build trust. Trust will help you sell more through your site and maybe even convert a prospect into a paying architectural services client.

Increase Volume. Recently, due to the slow down in the economy, many architects have reduced their fees in order to be more competitive. This may work to win the project, but if your fee is not high enough to cover expenses, overhead and profit, you will not be in business for very long.

If you choose to reduce your fees, you must also increase volume and complete your projects quickly. The smaller fees made on each project must add up to provide enough revenue to cover expenses and make a profit each month.

Raise Your Fees. The alternative to increasing volume is to raise your fees. Provide value by spending more time on design, more thoroughly developing your documents and serving your clients well throughout the entire process. This business model allows you to take on less work and spend more time on each project.

As mentioned above, most of us are already devoting the time and extra effort to our projects. We are passionate about what we do and we want our designs to reflect our true talents as architects.

The problem most of us have though, is that our fees do not reflect the dedication and investment we bring to each project.

Calculate your expenses, quantify your time and effort, add an appropriate profit margin and get paid what you are truly worth. You are a licensed professional and your services are worth a higher fee. Raise your fees. You are an architect… and you deserve to earn more.

Do YOU make enough money? There are other ways architects can make more. What are some ways you have found? Please share your thoughts in the comments. I’d love to hear from you.

***

photo credit: Mukumbura via photopin cc

The Courage to Proceed

The difference between those who succeed and those who don’t?

The Courage to Proceed.

Dream. Plan. Proceed. Succeed.

Step 3 is the most difficult.

 

photo credit: Express Monorail via photopin cc

The Power of Stopping

When my brain is rested and not required to complete a specific task or stay focused on success, amazing things happen.

During scheduled breaks, like vacations and holidays, I often develop my biggest ideas, like new business systems, strategies or concepts for future entrepreneurial endeavors. My right brain (the creative side) is free to roam, shifts into a lower gear and finds some additional horsepower.

Some of my most interesting, most innovative ideas have been discovered during these periods of cognitive overdrive. As I walk through the woods each morning, while driving long distances, taking a shower or as I drift off to sleep, my brain takes me to the most interesting creative places. (At times it takes me, very literally, to very unexpected places. I once drove two hours in the wrong direction while dreaming of my future and developing a new business strategy. My wife will never let me live it down.)

Whenever I am performing a creative task, I’ve learned to stop, take a break and reset my mind. It may take nothing more than lifting my head and focusing on something other than the task at hand. It may be a more deliberate suspension of activity or scheduled time-out. I may stand up and stretch, take a stroll around the studio, stop for a snack or converse with a co-worker.

Rebooted, I return to my task with a rested open mind. I often discover new directions or alternative concepts. The path to success becomes clear. The awkward sentence is quickly resolved. The complicated architectural detail looks simple and the solution so obvious.

It works.

The next time you find yourself stuck, don’t spin your tires. Try stopping.

My Time Online: Presenting Portfolio, Creating Context and a Top Google Rank

This week, we’ve been exchanging website URLs over at the Entrepreneur Architect Linkedin Group. It is very interesting to learn some background on the people we’re interacting with on that forum.

I shared our website URL (which is in the midst of an upgrade from our original site to a new one). Then, I posted links to all my other work online. Here is my original post:

In addition to our website at http://www.fivecat.com, below are the other places I spend my time online (and with my spare time, I’m a very involved Dad to 3 and I run an architecture firm).

Entrepreneur Architect Blog: http://www.EntrepreneurArchitect.com
Entrepreneur Architect on Facebook: http://www.facebook.com/EntrepreneurArchitect
Entrepreneur Architect on Twitter: http://www.twitter.com/EntrepreneurRA

Fivecat Blog: http://www.LivingWellinWestchester.com
Fivecat on Facebook: http://www.facebook.com/FivecatStudio
Fivecat on Twitter: http://www.twitter.com/FivecatStudio
Fivecat Squidoo Lens: http://www.squidoo.com/Fivecat

Linkedin: http://www.linkedin.com/in/markrlepage

I am very active on all of the above sites. It has absolutely benefited the firm and me professionally. I have a Pinterest account, a Google+ account and a Tumblr account as well, but I don’t spend much time with these (yet).

How about you? Other than actively participating here (thank you very much) and our new sub-groups, Architect Led DesignBuild http://goo.gl/U2heu and Architect Developer http://goo.gl/DJZTr, do you spend time online elsewhere?

Where? Why? and How much time?

A few group members asked if all this online presence was worth the effort. Do I really benefit from spending so much time online?

First, I enjoy writing and interacting with people all over the world. I have met so many people and have learned so much from my work online.

As for the business, we literally built our firm using our website. When we launched the firm in 1999 almost all of our work came directly from our website. Today, it’s about 50%. The other half comes from referrals from happy clients. We have a form that prospective clients complete when we meet for an interview. One of the questions we ask is where they found us, so we know exactly from where our leads are originating.

The blog, twitter and facebook do not typically lead directly to work, but they allow prospective clients to learn more about Fivecat Studio and more about me. They create context. When I meet with prospective clients, many tell me that they feel they already know me and that most certainly gives me an advantage when presenting a proposal.

All the work online also leads to very high rankings on Google, which is the point if you want your website to lead to sales. If you’re not found on the first page of a Google search, you are invisible to your prospective clients. Search “Westchester Architects” on Google and you will find us within the top 3 results on the first page (the results vary day to day).

I have never quantified my time online. I probably don’t want to know. I don’t recommend that everyone invest as much effort online as I have, but for us, it has been very, very successful.

Dream Big: Develop Your Business Plan Using a Narrative

ArchDaily.com picked up my friend and Entrepreneur Architect Linkedin Group member Bob Borson’s blog post today. If you haven’t read Bob’s writings, I recommend that you visit him at LifeofanArchitect.com. Leave him a comment and tell him we said “hi”.

Bob describes how he uses a narrative during the programming phase to learn what his clients want, both functionally as well as emotionally. At Fivecat Studio, we use a similar process using a questionnaire and other fun programming exercises to help guide our clients through the mine field of ideas in their heads. As Bob states in his post, this is “the most important step”.

Bob’s post also reminded me of how I finally developed and finished my business plan for Fivecat Studio. For years I had started and stopped and started and stopped as I attempted to craft a business plan worthy of the organization I had assembled in my head. In fact, I had no less than six separate incomplete documents in the “Business Plan” folder on my PC (I’ve switched over to Macs since then).

So, how did I break the pattern?

I wrote a narrative. I described, in detail, what my business would look like 10 years into the future. I basically described the vision I held in my head for so many years. I had a blast! For one, it’s lots of fun to dream big… with no limits. It was inspiring and helped me focus on what I really wanted to do and where I really wanted to go. It also helped with the development of the rest of my plan. Knowing where I ultimately wanted to end up, helped me develop my plan to get there.

Give it a try. Grab your laptop or a blank piece of paper and start… now! Imagine yourself 10 years from now. What are you doing? Where are you doing it? For whom? Let yourself go. Let your pencil flow. Set no limits and dream big. Your finished business plan is waiting.

Do You Over-Deliver?

Under-promise. Over-deliver.

We’ve all heard this old adage, but how many of us follow its simple lesson?

We recently recommended one of our consultants to a client. We’ve been very happy with this consultant’s performance and were confident they would perform well. As expected, they jumped right on the project and completed the first task lickety-split. Our client was happy and we were looking good.

To wrap things up, the consultant said they would prepare a report to document their findings. The client needed the report to move to the next phase and the consultant lead the client (and us) to believe that they would deliver the report promptly.

Almost three weeks later… still no report. Our client was NOT happy. I called to follow up. The consultant was on vacation the week prior and they promised to have the report delivered by day’s end. Great! I called the client and assured him that the report would be waiting in his inbox shortly. Crisis averted, I thought.

The next morning… still no report. The client called the consultant (now angry) to demand that the report be delivered as promised. He had funds tied up and required the consultant’s document to have them released. Again, the consultant promised to deliver the goods by the end of business day.

Day three; no report and again, a promise… and a fuming client.

The report was finally delivered via email on the morning on the fourth day. The client claimed his funds and everything was back on track, but unfortunately the client will look elsewhere for that consultant’s services in the future.

With all good intention (I know they were sincere with every promise), the consultant over-promised and under-delivered.

What if the consultant promised that the report would be delivered by week’s end? It’s difficult to say no when a client wants something right away. We always want to say yes. In the end, the most important thing is to, at least, do what you say you are going to do. The client would have been disappointed, but knowing that the consultant was on vacation the week before, he would have understood the situation.  From the client’s perspective, the report would have been delivered soon enough. Then… when the clinet received the report a day SOONER than EXPECTED, he would have been thrilled.

The same report, delivered the same day. One approach results in an disgruntled client. The other… total satisfaction.

Managing the client’s expectation; there are few more important tasks we perform as service providers. It’s the difference between a good referral and an unhappy client.

Fast Company Magazine recently published an article about the business philosophy of over-delivering; taking it to the next level. Companies are using the concept and causing their customers to experience memorable moments that affect their habits for a lifetime.

What do you think? Do you under-promise and over-deliver? You should be.

Let’s talk…

Great Architecture Will Not Build a Great Business

1) Design great architecture. 2) Get noticed. 3) Thrive!

Isn’t that how it is supposed to work. Well… it doesn’t.

The trick is step 2. Getting noticed. How do you get noticed?

The answer in a word, is Marketing.

Even uber-successful “starchitects” have a marketing team working to get their “great architecture” noticed.

Whether you want to be published in national magazines or looking to get noticed by the homeowners around the corner, you can’t reach your audience without marketing. Great architecture alone will not build a great business.

Marketing is the action of promoting and selling products or services. So, how does it work?

First you need to know your target market. What type of architecture do you design? What range of budgets do your clients have? Who are your clients? What do they do for a living? You need to know as much as possible about your target market.

Have no fear; defining your target market does not restrict you from taking on other non-target work. It just allows you to focus your marketing budget and effort appropriately.

Once you have a target, prepare a marketing strategy (and add it to your business plan). How do you best hit your target? Should you advertise in local newspapers, magazines or online? Should you focus your efforts on getting published in national magazines? Should you attend local networking events? Should you focus your attention on Twitter, Facebook and other social media? Whatever it takes to get YOUR “great architecture” noticed by the people in your target market responsible for hiring an architect is your marketing strategy.

Now you have a target market and a marketing strategy. Next you need to execute.

Take your strategy, set some goals and create a marketing action plan. What are you going to do and when will it be done by?

Marketing. It is not a dirty word. Try it and watch your business grow.

Things I Didn’t Learn at Architecture School (But Need to Know): How do I start and keep a business alive?

No one told me that I needed to know how to run a business. I’m an architect. I just need to tack up my shingle, design great buildings and clients will come knocking. Right?

Maybe… but whether clients come knocking or not, its not so simple to keep them knocking.

The solution? Write a business plan.

I know, I know; “I don’t need a business plan,” you say. “It takes too much time and effort.”

Wait! Before you discount my suggestion, think about it from a different perspective. A simple, stripped down perspective. Your first business plan doesn’t need to be a 100 page document, with financial projections and fully developed marketing strategies. In fact, I recommend that it not be. Start with just one page.

Jim Horan, author of The One Page Business Plan series of books says, “The greatest value in creating a business plan is not the final document. It’s the communication, prioritization, focus, clarity and learning that make the process worthwhile.”

Get started by taking a single sheet of paper and writing a single paragraph describing your vision. What will your business someday look like? Then scribe your mission. Why are you starting this business? List a few simple strategies. How do you get there? Then a few specific goals; benchmarks that will lead you to executing your strategies. With goals set, commit to paper an action plan. What specific tasks will you accomplish to reach your goals? When will you accomplish them? Who will accomplish them?

That’s it… a business plan. Done. It really is that simple.

I revisit and revise my business plan at least twice a year. As our firm grows and evolves, priorities change, markets shift, economies collapse. My business plan needs to evolve too. It’s also a great source of inspiration and motivation. A periodic reminder of my big ideas and reasons-for-being, keeps me focused and wanting to push Fivecat Studio to the next level.

So, go do it. Now… Don’t wait. Reach over and grab a sheet of paper.

What’s your vision?

Are You “Locally Famous”?

What are you doing to become “locally famous”?

Do you have a facebook account with which you post regularly and interact with your fans? Do you follow Twitter feeds for people who have influence in your local communities… and respond to their tweets?

Do you blog… consistently, and have a website which reflects the expectations of the market in which you wish to become “famous”?

What happens when you Google your name? Your firm? The term “architect” followed by your location? Are you there… on the first page? (Google Entrepreneur Architect and see what happens.)

Do you network with local business organizations?  Do you share your passion for what you do with others… with large groups or organizations… as a speaker?

Does your business card include your website URL and email… as well as your facebook and Twitter accounts?

To become “locally famous”, you must first truly “know your stuff” and be viewed as THE expert people turn to. Second; you must be everywhere they are and everywhere they look. Third; you must interact with the people from which you are seeking “fame”… and fourth, smile (a lot) and be nice. When you are sincerely nice to people, good things happen.

4 Ways to Build an Irreplaceable Business

From inc.com:

Last year Howard Stern earned more than any other radio personality. U2 topped the list of highest-paid musicians. Leonardo DiCaprio made $77 million, more than any other actor. Tiger Woods, in spite of all his, um, problems, still made $62 million to head the list of highest-paid athletes.

Read more.


The Entrepreneur Architect Podcast

Listen Now

Direct to your Inbox

Follow me on Twitter

Join Our Linkedin Group


%d bloggers like this: