ARCH 159 : THE ARCHITECTURAL FIRM

Architect Perry Jan N. Remolador, uap

October 3 2011 1

Firm Formation and Organization Starting an architectural firm involves thinking through: 1.0 2.0 3.0 Personal considerations Practice considerations Business considerations

All firms, emerging or established, plan by asking 1.0 What they want to do 2.0 How they want to relate to their client and competitors 3.0 What steps they can take to achieve their aspirations Firm start-up involves 1.0 Designing the firm 2.0 Legal forms 3.0 Other business decisions 4.0 Taking the plunge

Personal considerations / self evaluation : 1.0 2.0 3.0 4.0 5.0 Be honest with yourself about your motives and abilities Understand why you are making the move Seek control of your own destiny Are you ready to live professionally according to your values Are these entrepreneurial traits among your strengths - self-motivated and disciplined - responsible leader and organizer - decision maker - energetic and enthusiastic about your work - thoughtful and caring about your projects and the people who use them - continually striving to be well informed about current advances in your profession - risk-taker - willing and be able to make significantly less or no money for a period of time - competent communicator

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Practice considerations : 1.0 2.0 3.0 4.0 5.0 6.0 Winning a project significant enough to require full-time attention Identifying a market niche and deciding to fill it A lay-off with subsequent soul-searching Accepting a partnership proposal from a friend or colleague A biological clock that says its time Current firm that has: - no job security - no room at the top - firms values and methods increasingly not yours - firm doesnt pursue projects or markets in which you are interested and qualified - firm is downsizing

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Business considerations : 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Obtaining work Negotiating contracts and agreements Maintaining relationships of mutual trusts and credibility with clients Hiring and retaining qualified and loyal staff and consultants Working with contractors Learning about running a business Operating profitably with financial stability Creating a rewarding work experience

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Designing the Firm Not different from designing a building, it involves:

1.0 2.0 3.0 4.0

Consideration values why you do things Methods how you do things Goals what you want to achieve Resources what you need to get things done

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Legal Form 3 basic forms:

1.0

2.0

Sole proprietorship individual and firm are one. - Liability - Effect of death and retirement Partnership an unincorporated association of 2 or more persons or entities to operate a business with the intention of making a profit. - Capital, responsibility, authority and liabilities of the partners - Operation and management - Distribution of profits and losses - Transferability of interests - Admission of new partners - Resolution of disputes - Dissolution of partnership

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3.0

Corporations separate legal entities that can conduct necessary business actions including bringing suit and being sued.

2 types 1.0 Regular business corporation 2.0 Professional corporation

Organizational issues Ownership and control Capitalization Liabilities Taxes

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Tips for emerging firms 1.0 2.0 3.0 4.0 5.0 6.0 Decide what kind of firm you want to be Solicit client who can help you get there from here Observe and listen hard Learn to say no intelligently (know your limits) Build your own database Rest is only money - cant operate on a break-even scheme - ask for retainers - bill early and often - market

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Marketing and Planning Strategies 1.0 Maintaining an architectural practice requires a steady flow of interesting and challenging projects Take specific steps to attract clients and projects

2.0

Interrelated realms of marketing activities 1.0 Marketing the total process of developing clients, planning and implementing and evaluating sales support tools 2.0 Public relations getting the firm known 3.0 Sales presenting itself and its services, negotiating with potential clients and closing contracts 4.0 Project performance attracting new projects from old clients by serving them well and following up on completed projects

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Guidelines for Focus and Coordination 1.0 2.0 3.0 4.0 Think big Build relationship Be there first Deliver what you promise

Steps in Marketing Planning Step by step process that charts the marketing course for the firm Based on present, future, internal and external conditions 1.0 Determine the firms goals reflects why your firm is in business, gives guidelines for planning Set firm goals Perform internal analysis Perform external analysis Establish marketing goals

2.0 3.0 4.0 5.0

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6.0

7.0 8.0

9.0 10.

Generate strategies and accomplish these goals strategies are specific objectives that can achieve marketing goals Research and refine strategies Create and refine promotional and sales tactics tactics are short-term, intermediate planned actions undertaken to implement strategies Implement plan Evaluate the plan in action

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Strategies: 1.0 2.0 3.0 4..0 5.0 6.0 Solidifying your client base Introducing add-on services Expanding your services geographically Expanding your office geographically Adopting an innovation Acquiring new projects and client types

Tactics:
1.0 2.0 3.0 4..0 Pubic relations activities Civic events Bulletins, holiday cards Lead-swapping network with key advisors

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Financial Management
4 Components: 1.0 Financial systems track cash and commitments, revenues and expenses - Revenues - Direct Expenses (salary, consultant, production) - Indirect Expenses (rentals, taxes, training) - Profit Financial Reports to keep the firm and its project on track - Income Statement - Balance Sheet 2.0 Financial planning sets targets and provides essential information for pricing professional services and operating practice - Revenue projection - Staffing plan - Overhead expense budget - Profit plan

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3.0

4.0

Financial health Financial health requires planning, monitoring and control of 3 interrelated areas: - Profitability the ability to create an excess of revenue over expenses - Liquidity the ability to convert assets to cash with relative ease and speed without significant loss in value - Solvency the ability to meet financial obligations as required Acquiring capital adding capital to help firm achieve its practice goals

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