Insights from an Experienced Senior Architect for younger architects

Architects are the canary in the coalmine for the broader economy, when it comes to cyclical downturns. How can you protect your practice from the negative effects of the inevitable bust?
Photography: Angelica Ribeiro via Unsplash.

In mid February I wrote an email with the subject line: Are you worried about a slow-down in enquiries, leads and new projects?

By way of reply, an experienced senior architect called me to share some wisdom and insights based on their long career in architecture (they’ve experienced a few boom-and-bust cycles!).

These suggestions are intended for younger architects who may not have yet lived and worked through a downturn.

[And I’ve added my own ideas and suggestions in brackets].

So here goes:

Get ready: If you’ve only been running your own practice since 2015, buckle up; we may be entering a “bust” stage of the cycle. You’ll be in a better position to weather these challenges if you take intentional action now.

[People will still need your services, but they may want to access them in different ways. Be prepared to pivot, adapt and rethink what you offer and how you frame it.]

Know your limits: Make sure you know how much your services cost to deliver, and ensure you recoup those costs for each stage of work that you undertake. This is especially important in the initial phases - concept, feasibility, masterplanning etc - when you may be trying to get clients to commit. Use timesheets to track your hours and those of your team. What are your raw staff costs? Have you covered your overheads? Or are you spending too much time on certain phases - especially before a client has engaged you - so you’re not recouping your costs?

[Architects have an incredible ability to help their clients gain clarity and confidence about how to proceed. Or even whether to proceed with a project. These skills are valuable. Even a decision to do nothing is a decision; a form of clarity. Don’t disregard the important role you can play in helping your clients achieve clarity and the confidence to take inspired action.]

Interview your clients  The dance with a new client is an opportunity for you both to assess suitability and fit. Investigate their social media profiles. Are they trustworthy? This is especially important if we are entering a recession. Are they willing to pay you a deposit or a “Mobilisation fee”? Don’t leave your new project conversations open-ended.

[Clients crave certainty and parameters. The ESA agreed that their “mobilisation fee” is similar to my Gateway Services; and encouraged me to promote these. I describe how to use Gateway Services as part of a new pipeline roadmap in Architecture Marketing 360]

Clearly define your initial services: Don’t do any work without a defined scope of works in place: what’s included and what’s excluded? Have them sign an agreement and ensure money changes hands before you start work, even if it’s only a small sum that is a sign of their commitment to the process.

[Yes, you can do this if you’ve clearly articulated your value and differentiated your offer. Clients who are serious and not tyrekickers will pay. Trust me.] 

Stand up for your value: When you work for free, your future clients won’t value your work or ideas, because they didn’t pay for it. There is no investment on their part, so they have nothing to lose by walking away, or worse still, giving your best ideas to another designer to execute. This is how you can become discerning about what projects and which clients you take on.

[You have to believe in your own value before you can convince any future clients of your value.] 

Diversify your income streams: It’s useful to be agile by considering other revenue sources such as teaching, board positions, paid writing, providing expertise as a witness, etc. Liaise with your financial advisor/accountant early and upskill or seek help around topics that you aren’t yet familiar with. Workshop various “worse case scenarios” and come up with action plans that you can implement if and when you need to. Understand where your workflow and cashflow are sitting now, and project into the future, especially when projects that are currently on-site will conclude.

[Consider introducing new “passive income” streams by packaging up your skills, expertise and knowledge into books or guides, tools and templates, and other useful resources for future clients. These may also help to build your new client pipeline to attract more of the right types of clients and projects. You might also create CPD training for fellow architects if you’ve got advanced knowledge of a skill or technology, system or process, that will be in high demand as the profession evolves and adapts in response to the increasingly challenging business environment. Also, create a “buffer” savings account in your business to cover outgoings if cashflow becomes a problem in the short-term.]

Plan for the future: Loyalty in practice is important and it’s always hard to lose good team members. If financial conditions become really tough, the HARDEST thing to do is to let staff go, so investigate alternatives - such as reducing everyone's hours - in the first instance. If you do need to make hard cuts to your team and staffing levels, don’t wait too long to act, and think about your business plan for the next 5-10 years. What skills and qualities will best serve your sustainability, profitability and growth (if that’s what you’re aiming for). If you’re hanging on to people at the expense of your own health, well-being and/or financial position, how sustainable is that in the long-term? And how does your precarious position provide solid foundations for your team? Aim for longevity in your business by being strategic. Fingers crossed you can weather any downturns with your team intact.

[Understanding business development and marketing - and having a reliable way to bring in new clients and projects that doesn’t rely solely on the contacts and charisma of the principal/s - is absolutely paramount as architects begin to reposition to serve more people. You have valuable, marketable skills, expertise and experience. Communicating that value to the people who need your services is an underrated skill in the profession; and there is a strong demand for essential upskilling to ensure architects remain relevant through the challenging times ahead].

I’m really grateful to the ESA who shared these ideas, suggestions and insights and gave permission for me to share them with you.

If you find them helpful, please pay it forward and send a link to this page to an archi-friend or colleague who might benefit from reading them, too.

And if you’d like to find out more about how I help architects to run successful and profitable practices (businesses!), visit the Services page for details.