Most Architects can’t afford to do accounting
The reason is simple. Most architectural firms have less that 10 people.
By most, I mean 80%.
And architects can’t afford it because it takes at least 20 hours per week of someone’s time - on average. Just for accounting functions.
The Financial Model of an Architect’s Office is a well-kept secret. I have never seen it mentioned anywhere. But there are several things that need to be in balance to get positive financial results. The resources available from the AIA are only useful if you already have an MBA-like understanding of finances.
A Financial Model entails more than “Income minus Expenses should be a positive number.” Negative numbers equal poison. You can’t survive much poison.
I have to mention Page Highfill here. He is the architect who told me about the
financial model that architects need to know about.
The short answer. A benign version of Facebook.
Do you remember when Facebook first come out. You saw your friends posts and they saw yours. My account has evolved into something I am not interested in any longer. My News Feed seems to be 50% showing off what you just did, and 50% people’s opinions about politics and other stuff that I am supposed to do something about if I agree.
Oh, and ads.
Developing and documenting your processes is the most important thing you can do whenever you ‘WORK ON’ your firm.
Because this one tactic will make your firm better, more effective, and more efficient.
I have an addition to my suggested Office Reading List. It is a book titled REWORK by Jason Fried & David Heinemeier Hansson, the founders of 37signals (now Basecamp).
The book is a list of business and work concepts that they consider bullshit. They also offer the antidotes. I agree with the book because I did most of these things myself. They are correct. They don’t work.
These are my ideas on how an architect should be selected. I am not a fan of the usual competitions, RFQs, RFPs, and presentations that are used most of the time. I think these methods distract from what is important - the criteria for quality, schedule, and budget.
You might find a use for this article in your work. Feel free to copy and modify it to suit your needs.
The Kolbe System is a very useful tool that gives you an insight into another dimension of your colleagues - how they prefer to take action. This is something you should be aware of sooner rather than later. It is especially helpful when hiring.
Unique Methods are just your personal way of tackling a task. This presupposes that you have given this task some thought and you are happy with the procedure you have developed. For this procedure to be a Unique Method you must write it down.
Teachable is a great software tool for building online courses. I am interested in this because I think there are some topics that I have developed that might be suited to the online course format.
But more importantly you might find it valuable, too.
Everyone knows that projects, being much larger than just a couple of tasks, have phases.
What everyone doesn't know is that
ALL PROJECTS have six phases in common.
I'm pretty ambivalent about employee reviews. From having done them, I know they are time-consuming if you are conscientious. I don't have any experience whatsoever in receiving a review. I know I am not like anyone else (we are all unique after all). Nevertheless I don't get it. If you don't give feedback daily/weekly, how does an annual/semi-annual review make up for it? If you do give feedback daily/weekly, what is an annual/semi-annual review for?
These are interesting times. I believe it is the Chinese who use that as a curse, "May you live in interesting times." As an architect it has definitely been interesting for most of the past decade.
Not too long ago, anywhere from 20% to 40% of us had found ourselves unemployed or underemployed. That has slowly changed, but for a while it looked like the new normal.
The Bad News ...
I have always found that one of the key parts of getting a grip on the firm's finances is to have a good idea where the money goes. You might not need all the line items in the budget template here, we didn't; but it is helpful to start with all the possibilities and narrow things down from there.
Maybe you have a blog or want to start one. Maybe your firm wants to start a blog or get more consistent with the one they have. Maybe you aren't interested in what goes on behind the scenes. Well, I'm going to tell you anyway.
The basic process is straightforward:
Have you ever screwed up?
I do all the time. Luckily, the vast majority of my screw ups are small and don't affect anyone else.
When you make a mistake as an architect, the ramifications can get alarming very quickly.
Big Picture Advice For Success
I received the best advice of my career, two years after retiring.
That's when I finally got around to investigating the E-Myth. I was cleaning up old TO-DO lists, and got intrigued. What I learned is what 'working ON your firm' rather than 'working IN your firm' means in a practical sense. The Bottom Line: Develop your firm as though you plan to franchise it - even if you have no intention of doing that. If you don't make your firm into a 'franchise', then you and your firm are the same entity - and the firm only has value while you are part of it. If building a franchise is off-putting, you might think of the strategy as documenting your business knowledge, your methodology, your "How we do things around here". Besides the economic advantage of building a replicate-able business that you can eventually sell, there are three other main advantages.
Reimbursable Expenses are like boomerangs.
They are supposed to return to you like a boomerang.
Are your boomerangs returning larger, smaller, the same size, or not at all?
One of the ways that I attempted to establish standards in my firm that we could apply to every project was called ProjForms - shorthand for Project Forms.
Project Forms were literally a series of forms that were to be completed at various stages of the work.
This sounds a bit bureaucratic, but it was a solution to some problems that we had.
Contrary to my time table projections, the MyCorbu TIME upgrade will not be completed early next year.
All these features are ready NOW!!!
There is a new TO-DO manager out. Well, actually it is a little over a year old, but I just found it a month ago. The app is called Sorted.
I would like to be more loyal to my TO-DO manager of the moment, but it is starting to look like a year is my limit.
I describe what I have been using most recently here.
As usual, I wasn’t looking for a change, but here’s what got my attention.