Architects use
computers and drawings to design buildings.
To successfully complete a project, an architect is responsible for making thousands of critical decisions. To complete the development of a standard residential additions and alterations project, it takes several months of focus and dedication. Many of us work long hours, long into the night, through weekends and holidays.
The innovative
ideas and concepts we create can often only be born after hours (sometimes
days) of intense thought and several dozen layers of sketch paper. The personal
emotion, attachment and dedication that each project receives is unequaled in
any other profession.The time and effort required to properly develop a design
and complete a thorough set of construction documents is difficult for most
anyone outside the profession to understand.
As a requirement
for licensure, registered architects are responsible for the health, safety and
welfare of every occupant in every project we design. Like any small
business, architects must pay the typical operating expenses required to remain
buoyant, such as utilities, professional service fees, consultants’ fees,
insurances and several other overhead expenditures. But wait… for architects, there’s
more. To protect us from the liabilities inherent in our responsibilities as
licensed professionals, most architects also purchase an additional
Professional Liability insurance policy costing several thousand dollars each
year.
Then, there’s
that little thing called profit. Every
business, including architecture firms (yes, its true!), must earn a profit.
It’s one of the rules to “the game”. In order to continue pursuing our success
as architects, we must not only cover our expenses and take home a salary, we
must make enough to reinvest into the business.
Most sole
proprietors and small firms I know, struggle to meet the minimum requirements
of operation. Forget about profit.
Simply stated… Architects just don’t make enough
money.
We deserve to
earn more. So, in the spirit of pursuing our passion and attaining the success
we dream of, I have compiled the following ten ways architects can make more
money.
Additional Services
Every architectural
services agreement should include a section on Additional Services. These are
services available to your client, but are NOT included in your basic
architectural services.
Are you giving
away services that you should be compensated additionally for? Many architects
are doing just that.
Services such as Existing Conditions Surveys, Interior
Design, Kitchen Design, 3-D Modeling, Illustration, Rendering and Estimating
are all offered to our clients as additional services.
Construction Services
Many people have the perception that
architects build buildings and many others wished they would. So, in 2007 we
stopped saying no and launched our Construction Management Services. In doing
so, we more than doubled the revenue we collect from each project for which we
perform these services.
Through the
years we have learned that not every project and not every client is a good fit
for these services though.
If we feel that
the project and the client are compatible, we offer Construction
Management Services as anAdvisor, not
as Constructor. It is
important to differentiate the difference between the two services. I will
publish a more thorough post on this topic in the future, but the basic
difference is in the agreements between the owner and the multiple contractors.
As an Advisor, the contracts are direct between the owner and contractor. The
architect is responsible for managing costs, sequencing, scheduling and
payments. The full liability for the construction falls upon the contractors.
The architect is simply an agent to the client with no liability for the
construction.
As a
Constructor, the owner contracts directly with the architect for construction
services. The architect is then responsible for constructing the building,
hires the contractors directly and inherits the associated liability. More
liability means more liability insurance, which increases your firm’s expenses
and your firm’s exposure to legal action. Until the volume and revenue from our
CM Services allow for more investment in growth, we will stick with offering
Construction Management Services as an Advisor.
Selection of Fixtures and Finishes
During the
Design Development Phase of each project, we provide our clients with a
“shopping list” and contact information to suppliers and sales people we know,
like and trust. While our clients shop, we develop the design. We are always
available to support them, answer any questions and guide them in selecting
items appropriate for our proposed design.
In the case
where a client would rather not be responsible for this task, we offer the
selection of fixtures and finishes as an Additional Service and take
on the full responsibility for the choosing these items.
Each client is
different and their desired involvement in the process varies. Offering
multiple ways for this process to occur keeps each client happy and allows for
the firm to be properly compensated for the additional work required to perform
the task.
Purchasing and Delivery
Once all the
fixtures and finishes are identified, we then document the selections and
include their specifications in our Construction Documents. During
construction, the purchasing of these items is the responsibility of the
contractor, or the owner purchases the items themselves prior and furnishes
them at the appropriate time.
As a courtesy to
our clients, we offer a Purchasing and Delivery Service which makes the
acquisition of these items our responsibility. The additional attention assures
our clients that the items ordered will be correct and delivered on time.
This process
takes lots of time and effort. It is not typically the responsibility of the
architect to perform this service and if you take on the additional work, you
should get paid for it. Although, that does not necessarily mean that it should
cost the client much more.
Sell Products
There is an
alternative approach to the Purchase and Delivery Service described above. You
can purchase the products at the your discounted trade price, mark up the price
to cover your time and effort to handle the transaction, include an amount for
profit and offer the products selected by your clients at their full retail
price.
Most every
project includes lighting, plumbing fixtures, furnishings, accessories and
finishes such as tile and stone. Who better to sell those products to your
client than you?
Reimbursable Expenses
Most
architectural service agreements identify out-of-pocket expenses that will be
reimbursed to the architect, separate from and in addition to compensation.
Many architects though do not keep a record of these expenses and therefore, do
not properly collect the amounts owed to them for the project-related
expenditure.
Quantify your
reimbursable expenses and collect.
Reduce Waste
This one may be
the easiest way to make more money. It does not require performing any
additional work and there’s no waiting for clients to pay you.
Prepare a
thorough evaluation of all the money your firm spends. Categorize the list into
“required”, “not required” and “waste”. Spend only what you need to grow,
eliminate waste and end up with more money each month.
Monetize Your Website
Most firm
websites includes basic contact information, a bio describing the firm and a
portfolio of select projects. With any amount of traffic, you can add features
to your site and start making some additional money to supplement the services
your provide as an architect. As an expert, you can offer e-books for sale.
Prepare aResources page
with affiliate links to items or services for sale that people visiting your
site will find useful. You can also sign up for Google AdSense and make money
through advertising on your site. If designed well and presented properly, your
site can become a source of additional income for your firm.
The more traffic
visiting your website, the more money you can make. Continuously updating your
site with new work and additional information can help attract visitors. Adding
a blog and consistently writing on a topic interesting to a niche market (say
maybe “custom residential additions and alterations”) can help to create a
following and build trust. Trust will help you sell more through your site and
maybe even convert a prospect into a paying architectural services client.
Increase Volume
Recently, due to
the slow down in the economy, many architects have reduced their fees in order
to be more competitive. This may work to win the project, but if your fee is
not high enough to cover expenses, overhead and profit, you will not be in
business for very long.
If you choose to
reduce your fees, you must also increase volume and complete your projects
quickly. The smaller fees made on each project must add up to provide enough
revenue to cover expenses and make a profit each month.
Raise Your Fees
The alternative
to increasing volume is to raise your fees. Provide value by spending more time
on design, more thoroughly developing your documents and serving your clients
well throughout the entire process. This business model allows you to take on
less work and spend more time on each project.
As mentioned
above, most of us are already devoting the time and extra effort to our
projects. We are passionate about what we do and we want our designs to reflect
our true talents as architects.
The problem most
of us have though, is that our fees do not reflect the dedication and
investment we bring to each project.
Calculate your
expenses, quantify your time and effort, add an appropriate profit margin and
get paid what you are truly worth. You are a licensed professional and your
services are worth a higher fee. Raise your fees. You are an architect… and you
deserve to earn more.
Do YOU make
enough money? There are other ways architects can make more. What are some ways
you have found? Please share your thoughts in the comments. I’d love to hear
from you.
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