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How to Start an Architectural Business

Architectural Design Business

Working as an architect in an established architectural firm is a good move, because you can be sure to get paid at the end of the month if you perform the duties that are assigned to you.

On the other hand, if you don’t want to place a ceiling at the amount you can earn in a month or annually as an Architect, then you best option is not to work for someone but to become your own boss. Starting an architectural firm is not a difficult endeavor as long as you have the paper qualification and a strong desire to become your own boss.

It requires a moderate start – up capital to establish an architectural firm and you can be guaranteed to break even within the shortest time frame if you are hardworking, competent and have the right connection or network cycle.

Aside from the fact that your works will speak volume for you as an architect, most of the jobs you will get may likely come from referrals. Do note that it is pretty much easier to seal a business deal when a satisfied customer refers a friend or family members to you.

This is because they are already convinced of your job based on what they have been told. Unlike when you have to bid for a job, prepare a presentation, defend the presentation and then wait to know if the job / contract will be awarded to you.

Please note that if you intend to start this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you.

You also need to pay a visit to the regulatory bodies in your country to get all the information you need before you can legally open your own architectural firm business in your city. You can start your architectural firm business from a small town in the United States and if you are good at what you do, it won’t be too long before your brand becomes a nationally recognized brand especially if you go into franchising.

Steps to Starting an Architectural Business

  1. Understand the Industry

Architects play a major role in the construction industry. As a matter of fact, architects are responsible for the planning and designing of residential, institutional, recreational, commercial and industrial buildings and structures by applying their knowledge of design, construction procedures, zoning regulations, building codes and building materials et al.

Hence, the architectural services industry is made up of firms who primarily engaged in planning and designing residential, institutional, leisure, commercial and industrial buildings and structures by applying knowledge of design, construction procedures, zoning regulations, building codes and building materials.

A recent report published by IBISWorld shows that over the five years to 2020, the industry had performed well until the onset of the COVID-19 (coronavirus) pandemic.

Prior to the pandemic, the industry had benefited from increased demand attributed to strong growth in residential construction, growth in nonresidential construction in some years, increased access to credit and relatively low interest rates.

In 2020, despite rising residential construction, industry revenue is expected to decline considerably due to poor business sentiment related to the coronavirus pandemic, which has deflated demand for new architectural project contracts.

Going forward, growth will likely be determined by the level of activity in the residential and nonresidential construction markets. A recovery in corporate profit and access to credit are anticipated to enable firms and individuals to secure the financing necessary to embark on construction projects and cover the cost of architectural services.

Statistics has it that in the United States of America alone, there are about 68,224 registered and licensed Architectural Services firm responsible for employing about 202,172 and the industry rakes in a whooping sum of $38 billion annually.

The industry is projected to enjoy 2.9 percent annual growth. It is important to state that there are no establishment in this industry that has a lion market share.

One thing is certain about starting an architectural firm, if you are able to conduct your market research and feasibility studies, you are more likely not going to struggle to secure clients because there are always individuals, constructions companies and corporate organization who would want to hire your services from time to time.

Lastly, as an architectural firm, you can afford to partner with other firms that are into construction and building services. You can partner with construction companies, real estate firms and with the government. The bottom line is that if you are have a robust network and you are well positioned, you can indeed maximize your architectural services business.

  1. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who patronize architectural firms cut across businesses such as construction companies, shipping companies, ministry of works/department of works (government), players in the real estate industry and anyone who need architectural firm services hence the demographic composition for architectural firms are all encompassing.

In essence, your target market can’t be restricted to just a group of people, but all those who need the services of architectural firms.

  1. Decide Which Niche to Concentrate On

In as much as there is no distinct niche when it comes to architectural services, but an architect may decide to choose one or more areas where they can specialize in and some of the areas are;

  • New project architectural services
  • Renovation and rehabilitation architectural services
  • Basic designing
  • Providing construction phase services
  • Planning and providing predesign services
  • Interior designing and providing building fit-out services
  • Construction project management
  • Planning and predesign
  • Feasibility studies
  • Landscape and urban design
  • Building and Facility restoration
  • Building architectural design services
  • Other architectural design services consulting and advisory related services
The Level of Competition in the Industry

The competition that exists in the architectural firm goes beyond competitions with architectural firms; you will be expected to compete with other players in related industries that also carry out complimentary architectural projects for clients. So, it will be right to say the competition in the architectural line of business is tough.

The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry. Just ensure you are well-equipped, your workers are well-trained, your project and finishing and customer care services is top notch and you know how to attract and reach out to your target market.

  1. Know Your Major Competitors in the industry

Here are some of the most popular architectural firms in the United States of America;

  • Gensler San Francisco
  • Perkins and Will Chicago
  • HDR Omaha
  • Jacobs Dallas
  • AECOM Los Angeles
  • HKS Dallas
  • HOK St. Louis
  • Stantec Irvine, California
  • Skidmore, Owings & Merrill New York
  • Perkins Eastman New York
  • IBI Group Toronto
  • CannonDesign New York
  • Populous Kansas City, Missouri
  • CallisonRTKL Highlands Ranch, Colorado
  • NBBJ Seattle
  • Kohn Pedersen Fox Associates New York
  • Corgan Dallas
  • DLR Group Minneapolis
  • PGAL Houston AE
  • ZGF Architects Portland, Oregon
  • NELSON Worldwide Minneapolis
Economic Analysis

When starting an architectural firm, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business and perhaps expand the business and start competing at national level.

When conducting costing and economic analysis for your architectural firm, you just have to critically examine these key factors; place, pricing, and promotion. As a matter of fact, you would have to continue to review these key factors at regular intervals while running your firm.

As an architectural firm owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.

It is important to note that rent, salaries, utility bills, etc are some of the most important factors contributing to the overall cost of an architectural firm and should be considered as a major factor when carrying out your costing and economic analysis.

  1. Decide Whether to Buy a Franchise or Start from Scratch

When it comes to starting a business of this nature, it will pay you to start from the scratch as against buying a franchise. Besides, it is easier to start and run an architectural firm from scratch to profitability without leveraging on a known brand name.

People will patronize your services based on ability to deliver on projects and meet their needs as against relying on a brand name. Please note that most of the big and successful architectural firms around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

  1. Know the Possible Threats and Challenges You Will Face

If you decide to start your own architectural firm today, one of the major challenges you are likely going to face is the presence of well – established architectural firms and of course general contractor service companies and draftsmen in your target market location.

The only way to avoid this challenge is to create your own market; concentrate on local or state government and also start-up construction companies, real estate firms and startup businesses who need the services of architectural firms. Some other threats and challenges that you are likely going to face when you start your architectural firm are mature markets, bad economy (economy downturn), stiff competition, volatile costs, and rising construction prices.

For example, the economic decline brought on by the coronavirus pandemic has led to a steep drop in nonresidential construction, which is a disproportionate influencing factor for industry demand. Declining construction is the result of social distancing restrictions, but also a highly uncertain economic environment in which unemployment has spiked and consumer confidence and spending have dropped.

  1. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

If you are considering starting an architectural firm, the legal entity you choose will go a long way to determine how big the business can grow. Generally, you have the options of either choosing a general partnership, or limited liability company for your architectural firm business.

Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.

Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your architectural firm business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.

If you take your time to critically study the various legal entities to use for your architectural firm business with the ability to sell franchise and having offices and corporate clients all across the United States of America, you will agree that limited liability company; an LLC is most suitable.

You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or a ‘S’ corporation especially when you have the plans of going public.

Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your architectural firm so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures.

  1. Choose a Catchy Business Name from the Ideas Below

Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend to operate from when naming their business.

If you are considering starting your own architectural firm business in the United States of America, here are some catchy names that you can choose from;

  • Albert & Allen® Architectural Firm, LLP
  • Curtis Moore® Architectural Firm, Inc.
  • Nolan Pearse© Architectural Firm, Inc.
  • Dope Designs® Architectural Firm, Ltd
  • Grace Podium™ Architectural Firm, Ltd
  • Paul Zacheus & Co™ Architectural Group
  • Blue Print© Architectural Firm, Ltd
  • Perfect Designs® Architectural Firm, Inc.
  • Gab Gollen© Architectural Firm, Inc.
  • Jerry Baxton & Sons© Architectural Firm, Ltd
  1. Discuss with an Agent to Know the Best Insurance Policies for You

In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.

Here are some of the basic insurance policies that you should consider purchasing if you want to start your own architectural firm in the United States of America;

  • General insurance
  • Health insurance
  • Liability insurance
  • Risk Insurance
  • Workers compensation
  • Building/Property insurance
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Payment protection insurance

You can contact the following leading insurance companies in the United States of America to purchase the needed insurance policies for your corporate housing business;

  • Allstate Insurance Group
  • Liberty Mutual
  • Progressive Insurance Group (PGR)
  • Health Care Service Corporation (HCSC)
  • New York Life Insurance Company
  • Lincoln National Life Insurance Company
  • MassMutual (Massachusetts Mutual Life Insurance Company)
  • Northwestern Mutual Life Insurance Company
  1. Protect your Intellectual Property with Trademark, Copyrights, Patents

If you are considering starting your own architectural firm, usually you may or may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

But if you just want to protect your company’s unique designs, logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.

If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.

  1. Get the Necessary Professional Certification

Aside from the results you produce, professional certification is one of the main reasons why some architectural firms stand out. If you want to make an impact in the industry, you should work towards acquiring all the needed certifications in your area of specialization.

These are some of the certifications you can work towards achieving if you want to run your own architectural firm;

  • AWS Certified Solution Architect
  • Axelos ITIL Master certification
  • CISSP Information Systems Security Architecture Professional (CISSIP-ISSAP)
  • Dell EMC Proven Professional Cloud architect training and certification
  • EC Council Certified Network Defense Architect (CNDA)
  • Google Professional Cloud Architect
  • Professional Cloud Solutions Architect Certification
  • Red Hat Certified Architect
  • Salesforce Certified Technical Architect (CTA)
  • The Open Group TOGAF 9 Certification
  • The Open Group Certified Architect (Open CA)
  • Virtualization Council Master Infrastructure Architect certification.
  1. Get the Necessary Legal Documents You Need to Operate

It is a fact that you cannot successfully run any business in the United States without the proper documentation. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;

  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use (if you have a website)
  • Online Privacy Policy Document (basically for online payment portal)
  • Company Bylaws
  • Memorandum of Understanding (MoU)
  1. Raise the Needed Startup Capital

Starting a standard architectural firm is not capital intensive especially if you choose to launch the business on a small scale and you are the only full – time employee on your payroll. Purchasing printers and working tools are part of what will consume a large chunk of your startup capital, in essence, if you choose to start the business on a small scale, you may not have the need to source for fund to finance the business.

When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for startup capital for your architectural firm;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for loan from your bank
  • Pitching your business idea and applying for business grants and seed funding from, government, donor organizations and angel investors
  • Source for soft loans from your family members and your friends.
  1. Choose a Suitable Location for your Business

Starting an architectural firm comes with its own challenges; it is a business that can be started in any location as long as there are people that would need your services. As a matter of fact, you can start your architectural firm in your house and still grow the business to profitability since most of the contracts will be carried out on site.

Generally, in business, it cannot be overemphasized that the location you choose to start your business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and businesses that patronize architectural firm services and with the require purchasing power.

If you make the mistake of renting or leasing a facility for your architectural firm in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business. It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.

If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your architectural firm. Having said that, these are some of the cities in The United States of America where you can locate your corporate housing business;

  • San Francisco, California
  • New York City, New York. New York was ranked as the third-highest paying city behind Santa Rosa
  • Nevada, Las Vegas
  • Seattle, Washington. Washington is among the top 10 states for architects
  • Dallas, Texas
  • Washington, District of Columbia
  • Boston, Massachusetts
  1. Hire Employees for your Technical and Manpower Needs

When it comes to starting a standard architectural firm, you will need a good and reliable computers, architect software, printer, complete drafting (drawing) tool box and other related equipment that will aid you in carrying out your job. It is important to state that this equipment can be purchased as fairly used if you are operating on a low budget.

When it comes to choosing between renting and leasing a facility for your architectural firm, the size of the architectural firm you want to own, and your entire budget for the business should influence your choice. Besides, you don’t need a big workshop/garage to operate from since you will be going out to attend to your clients as against your clients coming to you except for some specialized projects.

As regards the number of employees that you are expected to kick start the business with, you need to consider your finance before making the decision. Averagely, when it comes to starting a standard architectural firm on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), Admin and HR Manager, Accountant, Architects, draftsmen, and Customer Services Executive / Front Desk Officer.

Please note that if you are operating the business as a one man show, then you must be ready to occupy all of the above positions and also outsource some key functions like bookkeeping and accounting et al to professionals when the need arises. Over and above, you would need a minimum of 3 to 10 key staff members to effectively run a small scale but standard architectural firm.

The Service Delivery Process of the Business

The services process involved in the architectural firms industry depends on the niches or the services the architectural firm offers. On the average, the process starts with biding or submitting proposal for an architectural designing contract, once the contract is won, then it is expected for all the contract document to be signed and advance payment made as required.

Once the payment has been sorted out, then the architectural firm will work closely with their clients to develop strategic, economically responsible recommendations for the project. After that is sorted out, the architect will now go into the studio to come up with the most appropriate architectural design. The architect is also expected to work with other professionals to see to the completion of the project.

  1. Write a Marketing Plan Packed With ideas & Strategies

The fact that the entry barrier for starting even a small – scale architectural firm is low means that more players won’t want to come into the industry if they have the skills and training. In essence, you must come up with unique marketing strategies if you must carve out a market for yourself within the available market in your community, city, state or country.

So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience in the architectural firm industry, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the marketplace. Here are some of the platforms you can utilize to market your architectural firm;

  • Introduce your business by sending introductory letters alongside your brochure to general contractors, construction companies, public works departments (government offices), shipping companies, and players in the construction and real estate industry amongst others within your location of operation
  • Engage in roadshows in targeted construction sites from time to time to market your services
  • Advertise your services in community-based newspapers, local TV and radio stations
  • List your business and products on yellow pages ads (local directories)
  • Leverage on the internet to promote your architectural firm
  • Engage in direct marketing and sales
  • Encourage the use of word-of-mouth marketing (referrals)
  • Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
  • Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
  • Engage the services of marketing executives and business developers to carry out direct marketing for you.
Prepare Your Business Card and Other Marketing Tools

Your business card is your number one networking and marketing tool. Therefore, ensure that you always have it with you whenever you go out. You would also need to   prepare your business brochure (hard copy). This is important as it makes it easier for people to know what you do at a glance and it should always be included whenever you send out business proposals.

  • Network and Join Relevant Architectural Associations

There are several architectural associations both locally and internationally that you can join to help you with the project of starting your business. The best place to start from; will be to join your state architectural association.

Beyond becoming a member of the national association of architects in your country; it is also important to network with people in complimentary industries. They include; people like building engineers, structural engineers, civil engineers, estate and land surveyors, and government officials especially- those in the town planning department. These are the major people that can help you get business deals as an architect.

  • Build Your Official Website and Source / Bid for Jobs

Part of what you will likely need to do to position your architectural business is to build an official website for the business. In this dispensation, the first thing an average person does when they come across a business is to do an online check. As a result, you need to pay a professional website developer to help you develop a good website; such that will enable you promote your business.

  1. Work Out a Reasonable Pricing for your Services & Products

One key factor that will help you offer your architectural services at a price that is highly attractive is to ensure that you source your working materials from sources that will give you reasonable discount. Another strategy that will help you offer architectural services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name.

Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products and services. So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.

  1. Develop Iron-clad Competitive Strategies to Help You Win

The architectural firm industry is a competitive industry, and you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to continue to create unique and easier to carry out designs et al.

In other to stay competitive in this industry, you must ensure that you are always on – time when called upon deliver and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the services you provide, customers can choose to shift allegiance and settle for other options available.

  1. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.

If your services and customer service fluctuate, you are likely going to struggle to get your customers to retain your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.

Part of what you need to do to achieve this is to track progress, results, or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).

  1. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secrets of larger corporations is that they are willing to spend good money year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your architectural firm;

  • Place adverts on both print (newspapers and construction related magazines) and electronic media platforms
  • Sponsor relevant community – based events/programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your architectural firm
  • Install your Bill Boards in strategic locations all around the locations where you operate
  • Distribute your fliers and handbills in target areas
  • List your architectural firm in local directories / yellow pages
  • Advertise your architectural firm in your official website and employ strategies that will help you pull traffic to the site.
  • Position your Flexi Banners at strategic positions in the locations where your architectural firm operates.
  • Ensure that all your staff members wear your branded shirts and all your vehicles and vans are well branded with your company logo et al.