PRM SEM 02 - 11. Business Plans and Marketing Flashcards
Business Plans and Marketing: General
Once you have set up a practice, beware the euphoria of your first job and big lump of fees!
Most practices start with a good job or two but work usually dwindles for a year before picking up again. During this period:
Don’t grow too big too fast.
Be careful employing staff. Get advice on the hidden costs and employment law from an advisor or colleague.
Try not to cut your fees to get work, you do yourself and the profession a disservice in the
long run.
A Strategic Structure and Plan:
Your practice structure or model should not just reflect your desired mode of practice but your business strategy and where you see your practice being in the future, especially if you plan to grow and either employ staff or perhaps team up or merge with another practice.
You may choose to work with someone just like you, but think about choosing a partner who complements your skills and weaknesses.
Business Plans
Generally, at the beginning of your practice you will have only a few jobs and find it easy to give good, quick service. If you keep this up you will get more work.
I find that every job you do produces another similar job through word of mouth.
You might also do contract work (short periods of work, or an agreed amount of work on one project) for a former employer (or teach part time at a University!) to maintain an income.
But how do you plan to get more work? How do you get different kinds of work?
A SWOT analysis is an assessment of your Strengths and Weaknesses, and the business environment’s Opportunities and Threats:
It’s a good simple technique to focus your thoughts and figure out a business strategy
before doing a business plan.
NZIA Practice Note PN 1.307 A Strategic Review of Your Practice has advice on the detail
of a SWOT analysis, but the basic principles are pretty simple.
NZIA Business Plan Documents
Another useful document is NZIA Starting A Practice 2nd Edition June 2008 (ISBN 04730729550).
Starting a Practice makes some good points:
- Remember key points: the nature of the service you will be offering and the market it is aimed at, the resources required to provide it and the financial risk involved
- Be professional about your business from the start, however small your initial
income - Focus on the future in a logical and organised way
- Anticipate change
- Have a reference point against which you can monitor and measure progress.
In more detail it suggests these considerations:
1 The Practice
A description of the firm, its personnel and premises.
Its structure and management (see later)
Its business advisers (as above)
2 The Service Provided
The type of work undertaken.
The type of clients targeted.
3 The Practice’s Position in the Marketplace
An evaluation of its present position.
Its anticipated position.
4 The Practice’s Business Philosophy
Its objectives.
Its views about competition, quality, profitability.
5 Marketing Effort
Initiatives, controls, feedback, results.
6 Financial Performance
Past and current state of affairs.
* a balance sheet, which gives a picture of the firm’s current financial position;
* a profit and loss account, which allows the firm’s past performance to be evaluated;
* an annual budget, which should represent a realistic forecast of total income and expenditure for the coming year.
A resume of work in progress.
7 Business Management and Controls
How the firm manages its finances.
How it manages liquidity.
How it gets the money in.
8 Any Financing Required
The amount needed and its timing.
How it will be used.
How the loan will be serviced and repaid.
NZIA Practice Note PN 1.308 How to Complete a Business plan for an Architectural Practice
has some advice on business plans:
- Keep it short, honest and realistic
- What differentiates your practice from another? Why should a client choose you?
What sort of clients do you want to attract?
We find the plan template in this practice note more vivid and immediate and useful in drawing out ideas and goals. You should look at a variety of business plans and use one you find to be a useful exercise.
Other Sources of Business Plans:
If you need a business plan to borrow money from a bank, ask them if they have a template
they prefer.
An executive summary is a short 1 or 2 page summary of your plan (or any document) that
can be read at a glance. It will focus on the conclusion or action points.
More general Business Plan templates can also be found at:
https://www.business.govt.nz/getting-started/business-planning-tools-and-tips/how-to-write-a-business-plan/
Marketing:
Remember, the personal skills that get you employment (such as good communication and enthusiasm) are also what will get your practice jobs.
Architectural practices don’t get jobs from advertising, they get work from:
- Networking: meet people, join clubs and societies, make non-architect friends, go to
lots of parties, art gallery openings etc. I have picked up jobs from competitions, parties, former employers, colleagues, neighbours at home and work, jury service, a guy I met in a lift, and many friends of friends. - Doing work: each job breeds another job similar to it. So take on whatever you can get at first, but later on you might want to change the kind of work you do and it can be hard to escape what you are known for.
- Word of mouth: friends and relatives of a client
- Being hot (or cool!): get your name or work in magazines etc. Don’t be afraid to hustle and promote yourself. Enter unbuilt designs in the AAA Visionary Awards.
- Being good designers: try and win awards for good work, get your work published in magazines
- Through competitions: although these are few and far between in NZ.
- Through bidding for work, often through processes called RoI (Registration of
Interest) or Eol (Expression of Interest) eg a Council library, difficult for young firms without a track record though
It’s also worth remembering that in NZ the house alteration is where most young architects
start and they remain what a lot of practitioners do.
