How Can Architects Generate More Work and Make More Money? by @FrankCunhaIIIPosted: September 5, 2012
Ask the Architect
by Frank Cunha III
Architects should be the leaders in the building industry, not just a consultant or a small part of a team. The simple truth is that taking on more work and taking greater risks is not for everyone. Owning a firm and taking on responsibilities beyond design is not an area you might want to dive into – or – it might be. Architects have the power to create their communities and shape their destiny. However, an Architect must be “proactive” instead of “reactive” and face larger risk in order to see larger rewards. The Architect is one of the first team members to have the ear of the client on a project and should not immediately hand the work over to other team members and lose a larger piece of the pie. Take a deep breath, understand the power you have at that moment and be creative about how you can become a stakeholder in the project. You can invest your fee in the project or go as far as become a stakeholder by financing the project or becoming one of the financiers of the project. Of course this philosophy is not for everyone. Not everyone is a risk taker so it is important to know yourself and the level of risks/rewards you are willing to accept.
Architects have the power to create their communities and shape their destiny.
Architects should be”Builders” instead of reducing the scope of their work and being specialized players in the development of a project. One approach is to be the “Construction Manager” on the project. The beauty of this philosophy as that you can calculate and manage your risks and determine how to proceed by educating yourself and the client. Of course you must have the proper insurance for your venture. There is insurance available for almost anything for a price so it’s important to make sure that you speak to your insurance agent to make sure that you are properly covered before embarking on your venture. As the Architect’s responsibilities shrink so does his/her control and his/her rewards. By simply taking on the role of a traditional Architect your fees are immediately reduced. The Architect can even take on the role of cost estimator by creating a data base from recent schedule of values and contractor’s application for payments. Again, we have this knowledge and experience but are we using it to it’s fullest extent?
Another way to gain control of a project is to include a simple bar chart in the specifications and/or in the General Contractor’s contract. Avoid submitting “builder sets” because complete drawings will help lower your risk dramatically. The developer’s/contractor’s vision of a project may not be the same as yours so make sure that all the important details are properly illustrated in the construction drawings regardless if it is a public bid or a developer’s builder set.
Another crucial step in becoming a larger stakeholder in the project is to know your Banker. You can do this by joining an advisory board for your local bank or having lunch with your banker. Bankers can be valuable in educating Architects on how the finances of a project work. Your Banker will probably tell you that he/she will need an appraisal, an estimate, sketches of the proposed project, and a history of your persona! assets to determine whether the project is even feasible. So take you Banker out to lunch and it will help you learn about current market information. Remember that Banker’s like to lend the bank’s money to professionals because they know that professionals are educated, responsible, and cautious, which means that the bank’s money will be safer.
It is important to understand OPM – other people’s money – and what it can do for you. So take your accountant out to lunch! It is important to learn how to use other people’s money to help you realize your project. Investors and bankers allow the Architect to take on more risk thereby increasing their fees and cash flow. Architects have to start putting projects together so that they can have greater control over a project’s outcome. By making money and
by providing extra services for which the Architect is properly compensated it will grant the Architect access to creating and shaping a community.
There are 5 components to every Performa:
1. Buy (Acquisition and Closing Costs)
2. NE and Build
3. Soft Costs (Legal, accounting, contingency, surveys, insurance, utilities, operation and maintenance, etc.)
4. Marketing (Real-estate, lease broker, etc.)
Every Architect interested in generating more work, making more money, and having more control over his/her projects should learn to put a Performa together in addition to pretty sketches which can enhance one’s communities. Since every situation is different it is important to have a good staff of consultants – lawyers, accountants, bankers, tax consultants, insurance representatives, etc. working with you. Get to know your key advisors (“Mastermind Group”) and pay them well because their work can greatly impact the success of your ventures. Having a great team of experts whom you trust is important to assure that you are minimizing your risks.
Harness your power as an Architect to become a Builder.
Unfortunately, these lessons are not taught in school, however, I do encourage you the reader to educate yourself about the possibilities of becoming more involved in a project. Harness your power as an Architect to become a Builder. As Architects take on more responsibility and start to make more money in their practices Architecture as a whole will prosper because with money comes power. With power comes the potential to focus on rebuilding communities and time to sculpt meaningful Architecture.
Do not stop learning how the Architect can take on more responsibility and attain larger rewards, remember RISK = REWARD and having control over a project is the key to success.
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Frank Cunha III
I Love My Architect – Facebook
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