10 Principles for Building an Architectural Business
How do you build an architectural business? Charles Justin offers 10 principles to guide you.
The following 10 principles for “Building an Architecture Business” have been identified over my career spanning over 40 years. Based in my own experience, they are not in any way absolute. Nonetheless, they may help others as they build their own practice.
A business is the vehicle that enables you to shape and control your destiny. Therefore you need to have a vision of what you want your destiny to be – both in life and your career. Considerations include the type of work and architecture you want to do, the type of clients you want to work for, the places you want to work in, the people you want to work with, the type of organization you want to build, the amount of money you want to earn, your desired life/work balance and your desired exit strategy.
To deliver this vision you need a plan, usually referred to as a business or strategic plan. This plan is not set in concrete and should be reviewed on an ongoing basis, nonetheless it should act as a strong framework for all decisions and actions.
A strong brand will help build a strong business. The brand should express the businesses attributes – what the business is about, what it's trying to achieve, its values and importantly what distinguishes the business from its competitors.
Brands can take years to build and moments to destroy.
Businesses should have a clear organisational structure, well defined roles and responsibilities for its people, a defined path for decision making and mechanisms to review and improve operation, performance and effectiveness.
Business owners need to work 'on' their business rather than 'in' their business.
Profit is not the main goal of business, it is a byproduct and it measures how well a business is managed. However, it does give the business power – the power to say no, the power to pay and attract top people, the power to invest in the business, in marketing, technology, growth, training etc, the power to withstand downturns and the power to achieve life/work balance.
Businesses need to adopt strategies to mitigate risk. These includes: written documentation regarding architectural appointment, non-agreement to uninsurable commitments, adequate PI and other insurances, comprehensive employment agreements with staff, written documentation on decisions and instructions, staying up to date with changing legislation and regulation, managing cash flow, anticipating downturns, proactive attitude to addressing problems.
All businesses require systems to operate effectively, particularly with growth where control has to be devolved down the line. Systems allow everyone in the business to operate on a common platform that delivers consistency, quality, and efficiency. Systems cover all aspects of the business including design, documentation, information management, communication, time management, financial control and analysis and quality.
The challenge is to develop and utilise systems where their effectiveness far outweighs their bureaucracy.
Winning work with low fees places significant pressure on profitability, quality and cash flows and ultimately on the 'brand'. To be sustainable the level of service needs to be tailored to the fee and the business needs to decide whether that level of service will deliver the outcomes that are good for the business.
You need to recognise that everyone will know what fees you charge, everyone talks. Once you are on a path of low fees, its very difficult to get off that path.
Architecture is not about buildings, it is about people. The people who use your buildings, the public who experience your buildings, the clients who commission you, the staff that work for you, the consultants, builders, contractors you work with.
You need to deal with them with integrity, address their aspirations, inspire them to engage fully in the project, empower them to bring out their best and collaborate with them in shared endeavour.
You need to exercise leadership.
The process of delivering architecture involves a large number of people and – as a consequence – a myriad number of communication activities, which need to be clear, timely and inclusive. This applies to communicating the brand, the idea, instructions, the intent or whatever message you are trying to get across.
To build a strong brand, communication across all arms of your business need to be consistent, so each reinforces the other.
Communication is not only what you say, but also what you do and how you behave.
If you wish your business to be multigenerational, you need to have a succession plan in place. Ideally this plan should be in place 15 years prior to your anticipated retirement. It involves identifying future leaders, engaging their commitment, grooming and training them for promotion, having a transitional buy in strategy, and transferring authority, responsibility and control.
The type of people that should be considered for succession are people who have qualities of leadership, the capacity to manage and grow the business and demonstrate the values that align with the brand of the business.
Charles Justin is cofounder of The SJB Group, which incorporates eight independent companies, Plus Architecture and Management for Design. He was instrumental in the establishment of these ten companies that provide services in the architecture, design and property industries. He is a past president of the Victorian Chapter of the Australian Institute of Architects and a life fellows of the Institute. He is now retired from the practice of architecture and is mentoring his daughter, Elisa Justin, in the establishment of her own architectural practice Justin Architecture. He is currently undertaking two property developments to provide his daughter with work – not a recommended business model.