Business planning for Architects

Business is an activity aimed at providing goods and services to buyers against profit.

But the profession is an activity aimed at providing knowledge based services against a fee. It is an occupation that demands academic study. It also requires a legal accreditation by some formally constituted body. Examples are medicine, accountancy, architecture, etc.

Just like other professions, Architecture too is no longer just a profession. With increasing competition, it is vital for an architect to survive as well as win over the market. And thus, I call architecture not just a profession, but a professional business!

And every business needs a business plan!

Just like other professions, Architecture too is no longer just a profession. With increasing competition, it is vital for an architect to survive as well as win over the market. And thus, I call architecture not just a profession, but a professional business!

And every business needs a business plan!

A business plan is a written document showing you your thoughts on what, where, why, when and how you intend to manage your business. If you are a person with many resources or you are one without any; just like a soldier who enters the battlefield with loads of equipments, you too must put your thoughts on paper before entering into the field.

The first step to business planning is to DREAM.

Dream to begin your own architectural practice.

But only a dream is not enough. You will need money, support, guidance, contacts and many more. Use this business plan as your road map for how you expect to succeed. Here is a quick 10 step guide to what you will need in your company's business plan:

1. Introduction:

Write your mission, vision and action plan to establish a clear communication with financiers, potential clients, future employees and well wishers.

2.A Brief account of how the company began:

Write about the origins behind the company's creation and how you or your business associates came up with the idea to start your business.

3. Your company's goals:

Explain your short- and long-term goals for the company in a few paragraphs.

Address the questions like 'How fast do you think your company will grow?' or 'Who will be your primary customers?'

4. Biographies of the management team:

The management section should include the names and backgrounds of leading members of the management team and their respective responsibilities.

5. The service or product you plan to offer:

A key aspect of this section will be a discussion of how your product or service differs from everything else on the market. Carefully write your USP – unique Selling Point.

6. SWOT analysis

Write about your Strength, Weakness, Opportunities and Threats. Be open and honest. It involves specifying the objective of the business venture or project. Identify the internal and external factors that are favourable and unfavourable to achieving that objective

7. The market potential for your services:

With required research and analysis, find out the no of clients, location / region, market size (no of clients) to whom you will be able offer your services. Remember that you have to convince financiers, potential clients and employees about your potential to carry out the services successfully.

8.A Marketing strategy:

How do you plan to tell the world you're open for business? Will you rely exclusively on word of mouth (not a good plan unless you've already got a reputation)? Will you advertise in print, television or on the Web (or all three)? Will you use online services to get your company listed on search engines and advertised on other Web sites?

Write about your marketing strategy suitable for the services you plan to offer. Also make a plan about your need vs. capacity to spend on marketing.

9.A Three to five year financial projections:

This section should include a summary of your financial forecasts, with documents showing the formula you used to derive them. You may require balance sheets, income statements and cash-flow projections for the entire forecast period. The summary in this section shall be able to tell prospective lenders about the amount of money you'd like to borrow.

The assumptions that you make in this section will make or break your company's success! Thus, if you're unsure about using this kind of financial modelling them find chartered accountants, seniors, or well wishers who can guide you. It's worth the efforts.

10. An exit plan:

There may be many reasons why you may like to close your business. Financial loss, loss of interest in the practice or other personal reasons may be some of them. You must take this step positively and gracefully.

Design your exit strategy in your business plan. It could be based on financial figures, revenue growth, and the market's reception to your idea or a consensus among partners, if any.

You are into a business and money is in the centre of any business. Thus, you shall plan and indicate how much loss you can bear. Write about your backup plan for clearing your liabilities when you exit. This step will not frustrate you or discourage you when you say goodbye.

“No dream comes true until you wake up and go to work.”

If you are an ambitious architect, begin to work upon your dream of starting your own business today.

Further Reading:

http://www.bplans.com

http://www.biztree.com/

Coming up in next blog soon:

Top Ten Do’s and Don’t of business plan & Sample business plan for Architects