 I’m asking for your help in deciding whether to push ahead with a new project I have been playing around with.
 I stole this idea from the 37signals blog when I was first starting Architekwiki.
Its simplicity, positivity and directness are very attractive.  Architects always have lots of balls in the air and keeping each ball moving forward is a challenge.
 Well, maybe not e v e r y t h i n g.After glass, brick is my favorite building material. Done right, it's timeless.
 I have Kraig Kramers to thank for describing how this tool works.
The tool is called a ’Trailing 12 Month’ chart.  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 Project Planning Worksheet has been a popular tool. Re-imagining the Planner as a Coda Doc has transformed it into an even more powerful tool.
 Determining your Billing Overhead Factor [BOF] can be an eye-opening exercise.
I learned this technique from Paige Highfill, an architect, who was teaching other architects how computers can be used in architecture even before CAD came along. When I tried out the calculation, I was shocked to find that we were losing $15 per hour on every hour we billed! I suggest that you avoid that situation.  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.
 The Problem With Plans
I guess the calendar year is the accepted time frame for taking stock of achievements and planning for the new year. 
At one time or another I have used each of these methods. Those sometime painful experiences are the basis for my recommendation.
 There is a new tool that could be a game changer for your firm.
Read on to see what Coda can do for you.  There are only three ways to calculate the fee for an architectural project.
FeeCalqs uses method #3 - but improves on the typical use of this method. Here's How FeeCalqs Works Whether you have arrived at a fee by a wild guess or a fee schedule you want some kind of corroboration.
One option, if you keep good records, is to compare this project to a similar project. Was the fee adequate on that other one? Usually the two projects are dissimilar in some way. Another way of checking the 'rightness' of an architectural fee is to evaluate its 'rightness' when viewed as a design budget. This option involves doing an evaluation. It is fairly easy to 'spread out' the fee over the design phases to see how adequate the fee actually is. Here's How...  When I published Feecalqs a while back, I failed to place the emphasis on the fact that Feecalqs is four linked electronic spreadsheets. This is important because the effort that it takes to arrive at a realistic fee for any project takes just a few minutes with a digital method of calculating fees. You already know the information that you need to enter, so it takes no time at all.
One of the four spreadsheet that you don't even have to look at is the Fee Tables. There are five tables representing the five Building Groups. These Building Groups arrange the different types of buildings into groups based on the difficulty of designing them. This Building Groups post shows the listing that I assembled from various sources. Here's what the fee tables look like and how they work... |
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