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October 3 2011

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ARCH 159 : THE ARCHITECTURAL FIRM

Architect Perry Jan N. Remolador, uap

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Firm Formation and Organization

Starting an architectural firm involves thinking through:

1.0 Personal considerations2.0 Practice considerations3.0 Business considerations

All firms, emerging or established, plan by asking1.0 What they want to do2.0 How they want to relate to their client and competitors3.0 What steps they can take to achieve their aspirations

Firm start-up involves1.0 Designing the firm2.0 Legal forms3.0 Other business decisions4.0 Taking the plunge

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Personal considerations / self evaluation :

1.0 Be honest with yourself about your motives and abilities2.0 Understand why you are making the move3.0 Seek control of your own destiny4.0 Are you ready to live professionally according to your values5.0 Are these entrepreneurial traits among your strengths

- self-motivated and disciplined- responsible leader and organizer- decision maker- energetic and enthusiastic about your work- thoughtful and caring about your projects and the

people who use them

- continually striving to be well informed about currentadvances in your profession

- risk-taker- willing and be able to make significantly less or no

money for a period of time

- competent communicator

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Business considerations :

1.0 Obtaining work2.0 Negotiating contracts and agreements3.0 Maintaining relationships of mutual trusts and credibility

with clients4.0 Hiring and retaining qualified and loyal staff and consultants

5.0 Working with contractors6.0 Learning about running a business7.0 Operating profitably with financial stability8.0 Creating a rewarding work experience

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Designing the Firm

Not different from designing a building, it involves:

1.0 Consideration values why you do things2.0 Methods how you do things3.0 Goals what you want to achieve

4.0 Resources what you need to get things done

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Legal Form

3 basic forms:

1.0 Sole proprietorship individual and firm are one.- Liability- Effect of death and retirement

2.0 Partnership an unincorporated association of 2 or morepersons or entities to operate a business with the intentionof making a profit.- Capital, responsibility, authority and liabilities of the

partners- Operation and management- Distribution of profits and losses- Transferability of interests- Admission of new partners- Resolution of disputes- Dissolution of partnership

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3.0 Corporations separate legal entities that can conductnecessary business actions including bringing suit and

being sued.

2 types1.0 Regular business corporation2.0 Professional corporation

- Organizational issues- Ownership and control- Capitalization- Liabilities

- Taxes

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Tips for emerging firms

1.0 Decide what kind of firm you want to be2.0 Solicit client who can help you get there from here3.0 Observe and listen hard4.0 Learn to say no intelligently (know your limits)5.0 Build your own database

6.0 Rest is only money- cant operate on a break-even scheme- ask for retainers- bill early and often- market

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Marketing and Planning Strategies

1.0 Maintaining an architectural practice requires a steady flowof interesting and challenging projects

2.0 Take specific steps to attract clients and projects

Interrelated realms of marketing activities

1.0 Marketingthe total process of developing clients, planning and

implementing and evaluating sales support tools

2.0 Public relationsgetting the firm known

3.0 Salespresenting itself and its services, negotiating with potentialclients and closing contracts

4.0 Project performanceattracting new projects from old clients by serving them

well and following up on completed projects

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Guidelines for Focus and Coordination

1.0 Think big2.0 Build relationship3.0 Be there first4.0 Deliver what you promise

Steps in Marketing PlanningStep by step process that charts the marketing course for the firmBased on present, future, internal and external conditions

1.0 Determine the firms goalsreflects why your firm is in business, gives guidelines for

planning2.0 Set firm goals3.0 Perform internal analysis4.0 Perform external analysis5.0 Establish marketing goals

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6.0 Generate strategies and accomplish these goalsstrategies are specific objectives that can achieve

marketing goals7.0 Research and refine strategies8.0 Create and refine promotional and sales tactics

tactics are short-term, intermediate planned actions

undertaken to implement strategies

9.0 Implement plan10. Evaluate the plan in action

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Strategies:

1.0 Solidifying your client base2.0 Introducing add-on services3.0 Expanding your services geographically4..0 Expanding your office geographically5.0 Adopting an innovation

6.0 Acquiring new projects and client types

Tactics:

1.0 Pubic relations activities2.0 Civic events

3.0 Bulletins, holiday cards4..0 Lead-swapping network with key advisors

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Financial Management

4 Components:1.0 Financial systems track cash and commitments,

revenues and expenses- Revenues- Direct Expenses (salary, consultant, production)- Indirect Expenses (rentals, taxes, training)

- ProfitFinancial Reports to keep the firm and its project on track- Income Statement- Balance Sheet

2.0 Financial planning sets targets and provides essential

information for pricing professional services andoperating practice- Revenue projection- Staffing plan- Overhead expense budget- Profit plan

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3.0 Financial healthFinancial health requires planning, monitoring and control

of 3 interrelated areas:- Profitability the ability to create an excess of revenue

over expenses- Liquidity the ability to convert assets to cash with

relative ease and speed without significant

loss in value- Solvency the ability to meet financial obligations

as required4.0 Acquiring capital adding capital to help firm achieve its

practice goals