Many architects aspire to start their own architecture firm one day. They dream of complete autonomy in choosing projects, being their own boss and establishing their name as a respected architect.
Starting your own architecture firm can be an amazing achievement. However, the journey to success is often one that is fraught with difficult roadblocks. For some, owning a practice can be so challenging that they step away from architecture altogether.
So, what is it that gets in the way of an architect building that dream practice? What are some of the difficulties that architects experience when they go off on their own?
We sat down with a group of ArchiBiz Coaches and Mentors to learn more about the risks involved with opening your own architecture practice, not including professional liability.
Here are the five biggest risks in starting your own architecture firm:
- Limited funds and poor cash flow.
When you start your own firm, you are limited in the amount of cash you have in the bank. Sure, you might have saved a fair bit before taking the plunge, but these savings can quickly dwindle if you’re not generating revenue.
“Having some cash in the bank acts as a buffer,” ArchiBiz Mentor Tim Smith said. “It gives you confidence, peace of mind and a fall back if you need it. It also allows you to take the time you need to find your feet, and take on the right projects which will get you off on the right track.”
You want to ensure that you are managing your cashflow effectively once the clients start rolling in. Late invoices can be quite damaging if they’re not kept under control.
According to this blog on Xero, 90 percent of businesses close their doors because of poor cash flow management.
- Finding clients.
That brings us to the second biggest risk – clients. In the beginning, when you haven’t built a reputation for yourself, it can be difficult to convince clients of your value as an architect.
Tim suggests architects “start the practice on the side and secure are couple of projects before taking the leap.” This will help you get the ball rolling. Hopefully, it will generate some great word-of-mouth referrals in the future.
- Lack of vision and business direction.
Vision is one of those risks that flies under the radar. It’s not something that is as widely discussed as cash or clients – although we believe it very much should be.
When an architect has a vision, they know where they would like to be in five or 10 years. They have an idea of the kind of practice they want to build. They’re not simply ‘winging it’ every day. This ultimately helps inform their decision-making.
“We know that typically start-ups will take on any projects they can get at the outset, such as residential projects from friends and family,” said ArchiBiz Mentor Jacqui Kirk. Even if this isn’t the work they want to be doing, they say ‘yes’ and end up building a portfolio around it, she added.
When you have a vision, you are clear on what projects are a good fit and which are not. All of a sudden, it becomes easier saying ‘no’ and moving your practice in the direction you want.
If it helps, consider creating a ‘business canvas.’ While we don’t advocate a fully fleshed-out business plan, a one-page business canvas is a great way to get your thoughts and plans on paper. It will help you have a clear focus for your business from day one, added Tim.
- Poor time management and organization skills.
When it comes to owning your own business, time management and organization skills are paramount.
Whether it’s invoicing clients, talking to suppliers or drafting proposals, admin work can take up the majority of your time if you’re not careful. Getting organized around your tasks – perhaps even creating systems in your business – will help maximize efficiency and ensure you have enough time to be creative.
According to ArchiBiz Chief Mentor Ray Brown, some of the most successful architects in our community are the ones who have a set time each month to think strategically about the business. That means looking at financial reports, key performance indicators, cash flow and forecasts regularly.
Not everyone is born a leader. Not everyone is born a successful entrepreneur either. However, it’s your personality that will determine whether you are capable of becoming both of those things.
Personality is one of those hidden risks that is often overlooked.
While there is no ‘right’ or ‘wrong’ personality, there are certain characteristics that can influence a person’s leadership capabilities. At ArchiBiz, we have identified two types of people: “searchers” and “full-toolboxes.”
A searcher is one who enjoys learning and pushing themselves out of their comfort zone. They know that they don’t have all of the answers, and are okay with that. As you might have guessed, a full-toolbox is the opposite. They claim to know all that they need to know, and their ego often gets in the way of their success.
Embrace being ‘the searcher’ and accept that you are not going to be good at everything you do. Outsource wherever you can, such as marketing or bookkeeping, and focus your time on the tasks you are good at.
It’s also worth mentioning that your personality can get in the way of your ability to find clients and manage a team. When it comes down to it, a successful architecture practice is built on strong relationships.
Starting your own architecture firm can be a tough yet exciting endeavor for an architect.
Ultimately, it’s up to you whether you want to take the time to learn what you don’t know, or try to figure it out for yourself as you go.
At ArchiBiz, we offer an eight-week program for architects who are looking to learn the business fundamentals so that they can lead impactful, sustainable and profitable practices. To learn more about our DAPS program, click here.