Architecture is a business: How EntreArchitect is building a community without barriers
Imagine spending a sizable portion of your adult life training to become an expert, ultimately to find out you’re still ill-equipped to practice in the real world.
That’s the reality for many small firm architects, who were taught the foundations of architecture - but nothing about business and finance.
EntreArchitecture was built to solve that problem, providing a platform for small firm entrepreneur architects to connect, grow, and face business challenges head-on.
In an interview with Monograph’s Best Practice host George Valdes, founder Mark LePage talked about how to honor the art of architecture while creating a transparent business that benefits everyone involved.
Architecture requires business education
Without the business acumen to run an architecture firm, LePage said that many architects are at a critical disadvantage.
“I think there's a trend that many professional practice classes are shifting more towards business. But there was none when I went to school. There was no mention at all. In fact, there was almost a discouragement from looking at it as a business when I went to school. I think that's changing as well,” LePage said.
It’s a change that needs to happen - and fast. Luckily, the generation of architects currently going through school is what LePage calls “innately entrepreneurial” thanks to the internet and the communication tools in use today.
But, there’s still a big gap between the modern generation and previous ones. This is the gap that LePage and EntreArchiteect are aiming to narrow.
Because if you build a successful business, you can do a lot more of the things that you became an architect to be, such as design, problem-solving, and building great relationships with your clients and customers.
Here are five ways to build an architecture business that thrives.
1. Identify your expertise
While LePage says that unsuccessful architecture firms typically suffer from a gap between architecture skills and business skills. What makes a successful firm is the ability to find team members — in LePage’s case, his wife — who can bring the necessary expertise to the table.
“I think if you are someone that doesn't have that strength and you want to start your own firm, you certainly can find a partner who has that strength. And you should find a partner who has that strength. Whether you like the business side or you don't like the business side, you should find somebody who is a compliment to you, somebody who’s filling in the gaps that you have and you fill the gaps that they have,” LePage said.
LePage and his wife are a perfect example of a business match made in heaven. She is a designer who doesn't want anything to do with business, while LePage has no problem letting the design side go.
“I love design, but that's not my passion. And so if you can find somebody or a team of people who can sort of fill in all the gaps, you can have a really successful firm,” he said.
The problem is that many firms don’t do that.
“They just find people who are great designers or they click really well, but they don't actually look at their strengths and strategically assemble a team that allows them to take on the business side of architecture in a strong way,” LePage said.
That expertise can extend to client relationships, too. LePage encourages architects to not be a jack-of-all-trades. By having specific expertise in architecture, you open yourself and your business up to clients that are more in line with what you can provide.
“It all starts with your ideal client, knowing and understanding who your ideal client is. That's another thing that architects resist. They will all want to be generalists. They want to do everything. But you'll be much more successful if you pick an ideal client. You can identify who you are and build a brand around that ideal client," he said.
2. Build a business roadmap
Without a roadmap in place — one that includes a vision, mission, strategic goals, and a base financial plan — LePage said you’re likely to end up making business mistakes that might not be reversed within months or years of starting a firm.
“That's the first step. It's figuring out where you want to go. If you don't have a map, you'll never get there. You'll just keep driving around in circles. The second step after you know where you want to go is to understand the basics,” said LePage.
By basics, he means really basic. It could be as simple as a one-page business plan.
“The same thing with your financial management plan — you can dive really deep, and we have programs where you can dive really deep, or you can just understand the basics, understand how a profit and loss statement works. How the money comes into your firm and how does it go out of that firm and how do you track that money?” LePage said.
By reviewing those metrics, you can understand the health of your firm in real time and make changes that can instantly affect the solvency of your firm.
“Many architects aren't doing that and find themselves months, maybe years, down the line, realizing that something that happened months or years ago is now putting you out of business because you didn't see it,” LePage said.
It makes the difference. When you understand your business basics and track them on a monthly basis, you uncover trends with time to act before a situation becomes critical.
3. Layer in marketing and sales strategies
Once you’ve built a financial foundation and set forth a clear mission, begin thinking about your sales and marketing strategies. If you don’t have those in place, LePage said that the client filtration process becomes a lot more difficult and time-consuming.
“Going from financial management, and understanding that system, and then putting together a marketing strategy that brings in the clients by developing a brand that resonates with your ideal client — that's super important because it's great to get a lot of potential clients coming, knocking on your door,” LePage said. “But if 90% of them are not the clients that you want, whether they are the type of work that you want, or the type of client that you want, or the profitability that you need, then they're not the right client.”
Time is precious for small firm architects who are running all sides of the firm’s operations. Small architecture firms should put together a system that attracts the right clients and filters for the clients that are appropriate for your practice.
Then there’s the sales system, which is a lot simpler than it may seem.
“The sales system can literally just be a series of follow-up calls or follow-up emails or some process to keep the ball rolling and getting them to either say yes or no as fast as they can,” LePage said.
If it takes six months to learn that a potential lead is a “no,” you've just wasted six months of your time. If you can get the “no” on that first day, you can move right on to the next client, who might be a “yes.”
4. Use community to validate your decisions
Once you’ve set a baseline for your firm’s operations, it helps to know that others are making similar decisions — or different ones.
Through EntreArchitect, LePage said that the community of architects who are learning and growing from one another are a departure from the previous era in architecture when professionals were more buttoned-up with business talk.
“By far the most successful thing we've done at EntreArchitect is the community building,” he said. “They see themselves in one another and they embrace that end, and they are there to help one another, which is a tremendous shift in our profession.”
LePage started his own career at a time when “secrets” were closely guarded.
“Firms did not ever share their ‘secrets’ — which don't exist. There are no secrets. Business is business. But they were always private, and very closed,” he said.
Partly to blame is the American Institute of Architects, thanks to antitrust regulations that have scared generations of architects from talking about business and money and fees.
In contrast, EntreArchitect is a complete 180 degree flip.
For those who might be seeking work in architecture, community building helps there, too. LePage said that by proactively networking, you’re likely to be more prepared to find a job at a firm when you want to make a change.
“When somebody asks me, ‘How do I find a job?’ That's where I start, in social media. Start communicating with people, build that community for yourself. You don't have to have a firm to build a community, build that network out on your social media,” LePage advised.
Then, when you're ready to start looking for a job, you can tap your network first.
“‘Here's who I am. Here are my strengths. This is the type of firm I'm looking for. Anybody have an idea?’ And then you get an introduction to a firm. And you're 10 steps ahead of the person that sent the resume,” LePage said.
5. Instill transparency across the board
Yet, some firms might not be willing to share.
There’s a sense of culture and tradition at many architecture firms, which LePage said might explain the lack of transparency around business practices. Some architects also feel unsure about the quality of their processes, and may be hesitant to expose their inexperience.
“I also think that many firms don't share the business side of what they do because they are afraid and potentially embarrassed to show how little they know about what they're doing,” said LePage.
“A lot of firms are not run well, they don't know because they didn't learn. And it's not their fault. It's just the way the profession has been over the generations.”
But, on a broader scale, instilling more transparency in the world of architecture can only help.
Take for an example the question of how much to charge clients in order to make a profit.
“There's a lot of power in knowing how much you have to charge. Right? There's a formula for it. There's a process. There's, on the right on the homepage of EntreArchitect, is a calculator you can download and it's a billable rate calculator. And then you'd plug in all the numbers and it'll tell you how much you have to charge in order to be profitable is a formula. And so if you understand how much you have to charge, then you know where you can start, right? And you can't charge less than that, right? You can't not be profitable,” said LePage.
Far from a dirty word, profit is a requirement for business. In fact, it's the reward for fulfilling your end of a transaction and giving your clients a memorable experience.
“Your clients want you to be profitable because that means you've served them very well. And so understanding how much you have to charge is the baseline,” Le Page said.
Once you understand that, then you will be able to charge what you really need to.
Transparency starts with company culture
Tradition, and transparency all start at the top. LePage said that when leadership at firms embrace a culture of sharing, everyone benefits.
“I think there's fear in some of us that we might not know enough to open those books and be confident that we know what we're doing. And I think that there's also the possibility that it sets up a dynamic in your firm,” said LePage.
“You have to have a culture that accepts that is set up that way, that it is a culture of transparency and a culture of responsibility that everybody is there for everybody else, that we're all there to share and grow together and we're there to make the business better. That we're not one for all. We're all for the firm.”
When a firm is shrouded in secrecy and distrust, it can lead to an ineffective business — and an ineffective industry. When those barriers come down, individual businesses and industries can truly thrive.
Join us on Thursday, August 27th for Best Practice, a virtual fireside chat series dedicated to practice operations at architecture firms and beyond. From pain points to potential, hear how leaders in the architecture and engineering industry are innovating through new business models and managerial techniques.
For our first Best Practice webinar, we’re chatting with Mark R. LePage, President and Partner in Charge at Fivecat Studio, an award winning architecture firm, Founder of the EntreArchitect community and Co-Founder of Gabl Media. For the past 13 years, Mark has helped Architecture firms run a better business through his EntreArchitect community and podcast. In this 45 minute chat, we'll chat with Mark about the business strategies and tactics he's learned throughout his career as an Architect, entrepreneur, and community builder.
- How can architects become better leaders?
- What traits do the best firm leaders share?
- Mark's thoughts on designing business and design development systems
- Much more!
About Gabl Media
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