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For those ready to become sole proprietors or owners of a small firm, the designer in you might feel overwhelmed by the business developer you must become. By following this Guide to Business Development for Architects for Small Firms, you will have a head start on managing past, current, and future clients, business development finances, and crucially, developing new architecture business today!
Table of Contents
- Business Development Distilled
- How Do I Get Clients When Starting Out?
- Following Up with Leads
- From Proposal to Tracking Success
- Advice for Firms Growing to 3-15 Employees
Business Development Distilled
Business development (BD) is all about finding and fostering relationships with potential clients, creating long-lasting connections with current clients, and understanding the expenses and revenue possible through these contacts. By being an engaged business developer, you will gain exposure and respect through writing and lectures, master key aspects of your firm’s finances, learn about the latest trends in industries of your choosing, and win more work with less overhead expenses.
Project management is a complex task that requires outlining goals and requirements of projects, guiding teams and meetings, providing defined services to clients, securing necessary staff, and completing a project. That is a huge job on it’s own, so how do you shift from managing one or several projects to ensuring there are projects for your future business of architecture?
How Do I Get Clients When Starting Out?
Finding Your First Client
Since 45.5% of the average firm's work is from repeat clients, it is critical to nurture those relations before, during, and after a project. Starting out as a sole proprietor or small firm, your existing rolodex will come from past work at other firms.
As long as there are no contractual obligations to avoid “poaching” of clients, maintaining good relationships will imprint you on a client’s memory. Invite your ideal clients to lunch or other professional events as a low-pressure way to keep in touch and find out the latest on their company.
While you work on finding prospects, notify your local AIA chapter that you are available for job postings and make yourself visible as a contractor for other firms. Rather than thinking of local firms as competition, think of them as potential partners in the future.
Design a Funnel to Filter Qualified Leads from Prospects
Funnels are a way to visualize your business development strategy from first contact until sale. Image the funnel in this order:
- Top of the Funnel
A large pool of prospects at the top of the funnel who are discovering symptoms of a problem that they then have to verbalize. For example, a developer wonders, “Why are these storefronts empty?”
As the prospect navigates this problem, the content they are seeking is informational, i.e. blog posts or videos that address their concerns.
- Middle of the Funnel
A smaller pool of leads in the middle of the funnel who are researching solutions for their defined problem. The developer asks, “How can I make these storefronts desirable to tenants?”
At this point, the prospect-turned-lead is looking for in-depth guides, pros vs cons, costs, or any detailed information relevant to a solution.
- Bottom of the Funnel
A yet smaller pool of qualified leads is at the bottom of the funnel, choosing the best solution for their problem. The developer says, “These storefronts should be a mix of restaurant-ready, white boxes, and unfinished spaces for custom designs. I’m going to find an architect who can help with programming, has kitchen experience, and can provide design through construction administration services.”
This is the time for your competitive edge to shine, so be sure to share how your work has solved problems and achieved goals. The leads will be comparing your firm to others, seeking out proof of expertise.
The Ideal Client
While the top and middle of your funnel should cast a wide net, you don’t want to fill it with unqualified prospects. Define your ideal client (building typology, budget, timeline, soft skills) and filter the top.
A well defined funnel allows you to have the right message ready at the right time of a potential client’s purchasing journey. A well tracked and analyzed funnel will show you what strategies have best resulted in project wins.
Prove Your Worth to Your Target Audience
By becoming a leader in your specialty, you will attract attention locally and nationally. Simply by writing, lecturing, or teaching, people will begin to find you to be an authority in your field.
Create opportunities for work by finding out where your ideal clients are hanging out, both in person and online. It’s not only a good way to keep up to date with the latest information from their field, but a possible place to make a connection.
Following Up with Leads
When you win a project, it likely means you’ve had contact with a decision maker months before an RFP was ever conceived. You might already have a sense of scope, timeline, and budget.
But new prospects are unfamiliar to you, for instance a lead that you meet at a lecture or a referral from another client. With contact information in hand, it’s time for a discovery call.
A discovery call is used to learn about the client, not so much to sell yourself. Be prepared before picking up the phone - research the lead and their company so you can ask detailed questions and possibly mention a client that you’ve helped with similar problems.
Specifics will vary, but general questions to ask include
- What product or service does your company provide?
- What are your company goals, internally and externally?
- What problems are you having and how long have they existed?
- What would a successful solution look like?
- Is there a timeline and budget associated with the solution?
- Who are the decision makers and stakeholders?
If you find this prospect promising, schedule an in-person meeting during that call! Face to face time is the preferred method for creating business relationships, and 75% of professionals believe it allows them to bond more meaningfully with business partners.
Similar to the discovery call, the meeting continues the trend of being client-centric. Rather than selling your services, you are asking how you can help. It will feel more natural to you and more appealing to the client.
Bring a role of trace or an IPad with a tool like Morpholio to the meeting; “act” like a trusted advisor that can help them navigate the challenges of their particular situation. After a deeper dive into the client’s challenges, you may have the opportunity to sketch out diagrams that visualize the problem and solutions.
A portfolio is not necessary at this meeting, but keep it in your back pocket if a past project is relevant to the problems of the person sitting in front of you. If the meeting moves in a good direction for both parties, schedule time to discuss a proposal right away!
After any meeting, a thoughtful follow up email should be sent the same day. Besides typical pleasantries, the follow up briefly highlights some of your takeaways from the meeting; this reminds the client of your detailed questions and ability to distill answers.
From Proposal to Tracking Success
Create a Winning Proposal
Some prospects will have specific instructions in a Request for Proposal (RFP), but any good proposal will contain an outline of how your design process will mesh with the client’s needs. This portion should be easy for anyone to understand since proposals can end up for review by those with little building experience.
However, the client may be an expert in completing projects, i.e. a “Director of Workplace” for a corporation that continues to grow and change. When you have a sophisticated client, it is wise to attach an appendix with minutiae that speaks to your expertise in the field.
For example, if your focus is commercial interiors and a Director of Workplace will be reviewing the proposal, evidence of your skills in strategic planning would be winning information. Perhaps you worked with a previous client’s growth projection numbers, planned 100 workstations and 10 “alternative” work areas that have been planned to easily convert to 140 workstations and only 4 alternative work areas.
Before going above and beyond, make sure you check off all the boxes of the RFP.
Negotiate a Thorough Contract
Once you’ve won a RFP, it’s time to negotiate. Negotiating a contract ****will set the legally binding requirements of a project. Contracts are their own topic of discussion, and it is not wise to begin work without an Architect-Prepared Contract or a AIA Contract Document that has been reviewed by an attorney.
Now that the client is out of the funnel, the architectural phases that the client might not understand need to be explained to ensure scope is fully captured. While many clients naturally expect Schematic Design through Construction Administration, a Developer acting as Contractor may exclude Design Development (they have their preferred specifications) and Construction Administration (they have confidence in their work).
Track the Win Back Through the Funnel
Once a contract is signed, the project management phase begins and you will have the opportunity to track the successes of the individual project. If this is a first time client, you will learn if they meet your expectations of an ideal client.
Go back to your sales funnel and track the story of this contract closing. While every potential client is different, it is useful to work your way backwards to see how long the customer stayed at each phase of the funnel and what sales strategies were effective.
Track Leads and Maintain Relationships with CRMs
Customer Relationship Managers (CRMs) use data analysis about your history with customers to improve business relationships, focusing on retaining clients and driving sales growth. They allow you to compile data from several communication channels, including websites, calls, emails, marketing materials and even social media.
While you can try to manually build your own CRM, there are a variety of software options to choose from, some free, some not. The amazing thing about CRMs is that they can automate many processes like pulling in news about prospects’ activity, storing personal details, and integrating with tools you use for accounting, billing, and surveys.
We have found that the best free option out there is Hubspot. We're big fans of its free plan and use its paid plan at Monograph. If tools like Hubspot are too complex. We've created a simple spreadsheet you can copy or download today.
No matter the solution, you'll want to create the following deal stages to help you track progress.
A lead is a prospect that may have a project upcoming or might be a good candidate for a project in the future depending on their industry and their own client journey. You might have no prior relationship with a lead but they can also be previous clients you have worked with.
The Contacted stage is for leads that have either reached out to you or you've reached out to them.
After a proper due diligence process where you assess their project needs, the scope of work, and their overall risk profile you can determine whether a lead is qualified to move forward with. This is an incredibly important stage to get to. You should feel comfortable saying no to work that looks to be too risky to take. By respectfully saying "no" to unqualified leads, you'll prevent future headaches, and potential lawsuits, and lost money.
This stage should be organized in close collaboration with your marketing team in order to ensure a you've been able to send a proposal that showcases appropriate experience and a work history for the proposed scope. The proposal is a tool to build trust as it signals a perceived level of safety to the client. Great proposals not only showcase previous work but also the team that will be interfacing with the client everyday. Tailor your messaging to the needs and concerns of your client and look to answer any frequently asked questions to make sure your lead knows you consider the client experience at every touchpoint.
Assuming you have a thoughtful contract that protects you and your firm from any unnecessary risk exposure, the contract negotiation phase should be about three things: Scope of work, Schedule, and Fees. We work with several architects and many of the most successful firms negotiate on Scope and Schedule, hardly on Fees. Consider this when you're negotiating your next contract: What can you give up that does not sacrifice a the profit margin on your fee structure?
Congratulations! You won a project! This stage of a deal is the perfect time to celebrate with the project team. The work here is only beginning so be sure to have a process in place that helps onboard new clients to your firm and your project team.
Unfortunately putting projects into this stage never feels great but because of this process you can now look back and diagnose what went wrong. Whenever a project goes into this phase, especially after a proposal has been submitted, your entire team that has been involved up to this point should host a retrospective meeting to unpack what might have led to this. Each lost project is an opportunity for self-reflection and a learning opportunity for the entire team.
Advice for Firms Growing to 3-15 Employees
Review Income, CACs, and Sales Cycles to Balance BD
As a small firm owner, you won’t be able to spend half of your time doing business development. Between project work, keeping in touch with former, current, and potential clients, writing articles, and giving lectures, how much time should be dedicated to the business of architecture?
There is no straightforward answer, but the simplest way to gauge this is to check current and forecasted revenue. If revenue is flatlining or declining, it’s time to start promoting your business.
Even though you’re losing out on billable hours during a stressful time, you’re ensuring that you will have business in future months. This goes back to the funnel - ensure the proper quantity of prospects at the top, leads in the middle, and proposals at the bottom.
If your funnel is working well and revenue is matching or beating expectations, step back from promotion and focus on the high quality services promised to clients.
Maintaining a good relationship with all existing clients means you will have lower client acquisition costs (CAC). CAC is simple to calculate: take the entire cost of sales and marketing over a given time, including salaries and overhead related expenses, and divide it by the number of customers that you acquired in that period.
As CAC is an expense that you should seek to decrease, find the benchmark that works for you to create profit. The longer you’re in practice, the more repeat clients you should have, slowly trimming your expenses.
Sales cycles, the time it takes to go from first contact with a lead to a signed contract, are important to track to increase efficiency. By comparing your sales cycles with industry standards, you can find your strengths and weaknesses.
The longer the sales cycle, the more likely the sale will fall through. Strive to minimize the amount of time prospects and leads are sitting within your sales funnel.
Dedicated BD vs Seller-Doers
According to McKinley Advisors, 81% of firms with 1-4 employees do not have full-time business developers. This number is not shocking, but at 5-9 employees and 10-24 employees, the percentages jump to 58% and 52% respectively.
All firms surveyed by McKinley with up to 24 employees rated having full-time business developers as “extremely successful”, higher than the success rate of seller-doers. This indicates that any firm, no matter how small, should at least investigate having business development in-house or as a consultant.
If you elect to forgo dedicated business developers, the seller-doers of your office should be trained in business development and soft skills, like communication, teamwork, networking, decision making, positivity, flexibility, and conflict resolution.
As you begin to master your sales funnel and have steady work, you will discover that you are spread too thin. Large firms may have in-house business development, but a small firm can get by with marketing consultants.
Business development experts will touch on many of the topics in this article, but can take work off your plate and tailor efforts to your goals, clients, and location.
Design Your Firm Holistically
Every element of your firm should be branded consistently in a way that imprints the quality of your work on everyone who sees it. Besides designing architecture, design your business cards, proposals, presentations, website, and even the experience of your meetings.
Once you’ve found your consistent message and style, it may be time to work with a public relations consultant to spread the word.
Business development is focused on finding and fostering relationships with clients. Public relations (PR) focuses on defining your company’s message, who the audience is, and how the audience will see it.
Not all consultants can tackle both BD and PR, so depending on the size of your firm and your area of reach, a separate consultant or dedicated PR person may be necessary. If your efforts to increase income are failing, test a reliable relations expert for a few months to see if they can increase prospects falling into your sales funnel.
Be Thoughtful About Proposal Meetings
Before deciding who is attending a proposal meeting, many people forget to ask about the meeting room. We’ve seen this overlooked question hurt an otherwise prepared team when an RFP for a small residential tower went to a diverse group of architects:
A large AEC company (200 employees) was planning on showing their team strength by bringing a principal, project manager, architect, designer, and leads from structural, mechanical, electrical, and plumbing along with a lengthy screen presentation. A small design firm sent just the principal and the project manager with a lightboard and trace paper.
The space was a small meeting room for four with no display capabilities. The AEC company had their team wait in the hallway (draining overhead budget) as only two members presented, eventually losing the job. The small firm knew the background of the interviewers, the limits of the space, and left the client with memorable (premeditated) sketches for the client, later winning the project and a client.
Repeat clients will have an understanding of your firm's process which eases the transition from signed contract into services, but new clients need to go through an onboarding process. The best way to get everyone on the same page is during the in-person kickoff meeting.
If you’re a seller-doer and have members of your firm have not yet met the client, the kickoff meeting is the time. At this time, team introductions, communication channels, project goals, and administrative items like bill procedures and milestones should be understood by all. This meeting is a way to alleviate the client about the problem they are trying to solve.
Business development for architects has many facets that are unfamiliar to designers and technical staff: managing CACs, sales cycles, business development, and public relation techniques brings challenges to those who have kept busy with individual projects. By following this guide, you can couple your newfound BD savvy with your design excellence and run a successful architecture business.