Is it possible to be successful in architecture and make money? Of course it is. Here are some thoughts about how.
The recent RIBA Building Futures report “A Future for Architects?” included a paragraph about the prevalent view that architects are not good at or willing to be business people. These views were put forward by the 15 ‘Client Representatives’. Here is the full paragraph:
“Some representatives on the demand side also perpetuated the view that architects are so preoccupied with their ‘vocation’ that they do not consider that practice is a business, and are less excited by the prospect of creating a successful business than a high profile in the profession. There was also some continuation of the belief that architects are arrogant and focused on embodying their own ideologies rather than providing a service to clients. However these views need to be put in the context of the great esteem in which UK architects are held internationally and the undoubted profitability of many of our better established and high profile firms.”
So clients hold us in high regard, and some of us are profitable, especially if we are famous. But many architects aren’t interested in being successful in business. Do these views sound familiar to you?
One thing that frustrates me about these views is that because they are held by some architects – who tell me ‘architecture is not a business’, ‘design is not about profit’ – it can easily be assumed that these views are held by most, if not all, architects in practice. But I don’t believe they are.
I do think that many architects have difficulty achieving serious business success. I also believe that many architects would like to make their businesses more profitable. Yet this can be difficult because the skills you need to run a business are not the ones we focus on in our education. Making things worse is the idea that unless one is Norman Foster, one cannot be successful in architectural terms and profitable at the same time.
Be a good architect and make money
So is it possible to bring a more business-minded approach to your practice whilst retaining design quality? Is it possible to be a good architect and make money? I think it is – I’ve spent many years helping practices do just this.
If you’re proud of your design achievements, but not about your profits, and you’re interested in doing something about it, here are four things to get you thinking.
1. Make time to work On your business
How much time does your practice spend on looking after its own health? How much time and money do you spend on marketing and business development? If the statistics are anything to go by, it isn’t enough.
According to Colander’s recent RIBA Benchmarking Survey of Chartered architects practices (pdf link), only 13% of staff in these practices were non-fee earners, whilst Colander recommends between 20 and 33%. Why so few non-fee earners? Perhaps it is because non-fee earners are seen as a luxury, but they aren’t. These are the people who will help your business become more efficient.
Another underspend area is marketing. Colander’s benchmark for Chartered Practices turnover spend on marketing is between just 1.5% and 2.5%, and only 37% of practices surveyed met or exceeded that benchmark. But the benchmark itself is incredibly low.
The Chartered Institute of Marketings own Marketing Trends Survey for Autumn 2010 (pdf) showed that the average marketing spend for an organisation with a turnover below £1m was 9.96%, dropping to 7.61% for a turnover of £1-10m, three and four times the upper limit of the Colander benchmark. We are starting from an incredibly low point here. Perhaps it is because good marketing requires strategic direction, which requires time spent on the business.
Start to allocate more of your time and money to look at, review and help your business become more successful in financial terms. If you need to, spend some of that money on getting some good outside advice. Of course, this means learning how to let go of a small part of the chargeable work you do to your staff, but they’ll thank you when it means they have a job in a year’s time.
2. Understand your clients better
Before you spend any money on marketing, advertising, PR or business development, make sure that it will be money well spent. Key to your strategy must be a full understanding of your clients. You need to know more about who they are, where they are going in the next 10 years and what is really bothering them now.
Make time to identify your clients well, and listen to them. Get your staff to help you – they probably know your clients better than you do.
3. Focus on Delivery
When you know what your clients really need, make sure that you focus your time on delivering to those needs. Some of your clients will prioritise cost, some quality, some speed of delivery. What matters is that your primary focus is the same as theirs.
This doesn’t mean that you can’t use your design skills to deliver to that need. Your design skills are an essential element of the tactics you will employ. Use them well, without distractions. Make sure you’re not spending time on aspects of a project which are of no concern to your client. When you can deliver, then you get the opportunity to capitalize on a satisfied customer.
4. Demonstrate the value of Design
Whatever your clients priority, you can deliver it through good design. As a result, good design becomes an important factor in customer satisfaction.
If value for money is important, show how your design skills delivered it. If meeting standards has been an issue, show how you used design to deliver a solution. If the client needs a collaborative approach, make sure your design skills contribute to the success of the collaboration.
Make the value of design a key element in the way you communicate your success in delivering their project. Tell the story through design, keeping design in the loop. By sharing the importance of design to the success of your clients projects, you will help them value it on their own terms, and it will become part of the story.
These are just four ways you can help make your business more profitable, without sidelining the importance of your architectural skills. Indeed, pursuing these goals will help dispel the myth that architects “are arrogant and focused on embodying their own ideologies rather than providing a service to clients”.
If you’d like to know more about how they might work in your practice, why not get in touch?