SURVEY – Business Models for Small Architectural Firms

July 20, 2016

AIAeagle_2016The Small Firm Exchange (SFx – previously called the Small Firm Roundtable, or SFRT) seeks the anonymous input of small architectural firms (10 persons or fewer) on a variety of business practices. Below is a full article by Kevin Harris, FAIA explaining the request. This article will soon appear in the CRAN Journal. But, to help us get a jump on this we are asking for you to participate in the survey now. The survey is very brief and should not take long to complete.

To access the survey click HERE!

Kevin Harris PhotoCRAN Journal – Summer 2016
Article by Kevin Harris, FAIA

ARCHITECTURAL MODELS FOR SMALL FIRMS

As architects, we are all familiar with the process and benefits of modeling our designs prior to construction. Models are an effective medium to study proposed creations and help communicate those concepts to our clients.

Constructing a model takes time however, it can give us an opportunity to take a break, reflect on new insights, and manipulate the parts until all seems right. Working with a model is a process that helps us elevate our plans from good to better.

As part of their ongoing effort on identifying what information could best benefit members of the AIA, the Small Firm Exchange (SFx) distributed its Small Firm Survey (Beta version) during the 2016 AIA Convention. Its purpose was to identify and measure the variety and commonalities existing in small firm models with the goal of providing meaningful insight to all architects practicing in small firms. It collected data on firm location; staff number, credentials, and commitment; project numbers, types, locations, and budgets; business plan existence and update frequency; contract usage; fee methods; gross revenue; and identified interest areas for additional studies.

The surveys were distributed as paper copies in both the SFx and AIA Fellow/VIP Lounges at the convention. Participants in this “Beta” test group formed a small sampling however, one large enough to reveal certain patterns of important concern to small firm practitioners.

Most notable is the fact that very few responded as having, or updating, a business plan. Those that did have one admitted at best to infrequent review or updating of this important planning tool. A business plan is widely acknowledged as a basic guide that is to be used throughout the lifetime of any business. In order to be of value, the plan must be kept up-to-date!

This brings up the rhetorical question that, as a profession, why don’t architects apply those concepts of creative process improvement modeling used to arrive at better designs, to plans used to guide their own businesses? Why indeed!

I am also guilty of spending little to no time on developing, studying, or “modeling” my own business plan. This SFx survey has piqued my interest on what other things I might learn from observing other practices. What patterns are applicable to my own firm? For example, since I want to improve my financial success, is there a correlation between firm income and the number of projects each year? Or does the number of staff in my outfit restrict the types and sizes of projects I can best handle? What type of contracts do others use? Are there better patterns to distribute the responsibility hats worn by a sole proprietor when in a firm of 2-4 people, or is it any better with 5-10? Is a larger firm more profitable than a sole practitioner without support staff? The data sampling of small firms must be greatly enlarged to properly study these and other relevant questions.

Below is a sample “dashboard” that visually communicates the data gathered from the initial “Beta” version. Similar outputs will be applied to the digital version, and will be made available to all who participate. Follow this link to the survey: http://tinyurl.com/AIASFxBusinessModelSurvey

SFx Beta Survey Results

Answering basic business questions and conducting mid-stream course corrections is required for your basic business survival. Having access to a database illustrating how your peers address these same issues will go a long way towards guiding you towards a more financially sustainable practice.

Download the survey link NOW! http://tinyurl.com/AIASFxBusinessModelSurvey

Updated small firm model statistics will follow in a future issue of the CRAN Journal.

CRAN Journal – Summer 2016
Article by Kevin Harris, FAIA

By | Posted in Architecture in NJ, Business, Practice Management, Small Firms, Uncategorized | Tagged: , , , , , , , , | Comments (0)

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