Setting Up an Architecture Practice – Getting Started
You have carried out your feasibility study and decided to jump in. You are starting your own practice. But where do you actually start? In this part of our Setting Up Practice series we will look at some of the first things you need to consider and prepare as you start your new design studio.
In the first part of this series, the feasibility study, we asked a tonne of questions. The business plan now needs to provide solid answers.
Your business plan can include an overview of the following:
- Company format
- Business potential
- Services you will provide
- Marketing plan
- Finance plan
From the more generalised feasibility study, we can now delve a lot deeper into your new business proposals.
One suggestion is to start with a SWOT analysis – strengths, weaknesses, opportunities and threats. This is outlined well in the RIBA Good Practice Guide to Starting a Practice.
A SWOT analysis will help you evaluate your skills and weaknesses, areas you might need to focus on, and potential dangers or problems the business might face. It also might show opportunities that can present themselves in the future. The outcome of the analysis may show that you need to seek specialist advice in terms of financial management, marketing, local business and many more. Getting advice and speaking to people in these early stages of the business development will be invaluable.
While we can’t cover the full details of what a business plan should include in this post, we can go through some of the main sections of the plan and highlight some of the points to consider.
Who makes up the company, what is the structure, and how is it managed. What are the business objectives, how will it grow.
Business potential looks at the market as a whole and how your company fits into it. The research you have carried out should inform you of your clients and competitors and what the potential of the business is likely to be.
Services you will provide
What services are you providing to your clients and how does that make you different from other architectural practices in your area? How are you pricing your services? What kind of capacity does your business have, and how will you adapt should things change.
How will you promote the business to find new projects and clients? Will you do this yourself or employ a marketing team. Who will develop your marketing strategy?
What are your financial forecasts for the business and your overheads. Who will be in charge of the financial side of the practice and manage issues such as funding and fee collection?
Getting Set Up
If you are currently working in another practice, you will need to check your contract before you get started. Check for any clauses that may prohibit you from taking clients, leaving to work for a competitor or taking colleagues with you. This is an important step – if your current contract contains a clause that is of concern, it would be prudent to seek legal advice.
Even if it is possible to get started, you want to avoid stealing your current employers clients, or indeed staff. It may not be written in your contract, but at the same time, it’s just not cool. Over time people may gravitate towards your new practice but allow that to happen organically rather than aggressively seeking to take everything with you.
Setting up your own practice comes hand in hand with a mountain of admin! Like it or not, you are now the HR department, accounts department, admin team and much more. Making sure you get everything set up correctly is a priority.
Make sure you are registered with the appropriate professional bodies and those memberships are kept up to date, and records are correct. You should be registered with ARB if you are a qualified architect. ARB also provides helpful documentation with regards to setting up your own practice amongst other guidance.
Insurance is very important. Things can go wrong, and it is key to make sure you are covered just in case. You can take out professional indemnity insurance. ARB can assist with this and provide guidance in sourcing suitable insurance. Consider also if it is necessary for you to take out public liability insurance.
If you decide to set up a limited company you will need to register with Companies House. It it possible to do this yourself, or you could engage an accountant to assist you with this and some of the other aspects of setting up the company, tax, payroll, PAYE etc.
If you plan to take on staff you will need to consider Payroll and PAYE along with employer pension contributions. Your accountant can assist you with all of these things.
You may want to register your practice as a RIBA Chartered Practice. This can help with marketing and will get you listed on the RIBA directory.
If you don’t set up a company but decide to work as a sole trader you will need to register for Income Tax self assessment. You will also need to do this if you are a director/partner of a company.
If your turnover is expected to exceed the VAT threshold, you will also need to register for VAT with HMRC.
[Please note First In Architecture is based in the UK so our articles lean toward UK practices and standards, make sure you always check your local regulations and seek appropriate legal advice if required.]
It is a good idea to get your standard documentation set up in the early days. This includes some of the less exciting things like:
Terms of engagement – client
Prepare a standard template that can be adjusted for each project, covering things such as scope of work, fees, responsibilities, dispute resolution. While standard templates are available, you could consider having this document checked over by a legal professional to make sure you are covered in all eventualities.
Having a standard fee proposal document ready will save time later. This could take the form of a simple letter, or something more detailed.
Any other contracts that will be required for carrying out your work should be considered at the early stage of setting up. Rather have everything ready than realising too late that you should have had something in place.
If you plan to take on staff it is worth getting some general office procedures and standards in place so that you can easily induct new employees and help them to settle in to the practice well.
Creating drawing standard templates, drawing layout sheets and general examples will help any other staff be on brand with their drawing output. Things like logos, practice branding colours, fonts and so on, should be readily available so that all documentation leaving the practice is professional and formatted as standard.
All practices need to have a complaints procedure, just a simple document setting out how a complaint is dealt with and the procedure for doing so.
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Where to get help
There are many professional services and organisations who can help with the setting up of a new practice. Some of the people you may consider engaging with the seek advice include the following:
- ARB and RIBA
- Bank manager
- Business advisor
- Insurance broker or advisor
- PR and Marketing consultant
- Ex colleagues who have set up their own practices
- Organisations such as Business Link and Constructing Excellence