architecture firm business plan

8/13/2019 Architecture Firm Business Plan

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Executive Summary

ObjectivesMission

Keys to Success

Company Summary

Company OwnershipStart-up SummaryCompany Locations and Facilities

ServicesTechnology

Market Analysis Summary

Mar et SegmentationService !usiness "nalysis

Strategy and Implementation Summary

Competitive #dgeSales Strategy

Management Summary


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Executive Summary

Statesville "rchitecture will be an architectural $irm speciali%ing in residential&commercial and industrial architecture in domestic and international mar ets based out o$

Capital City& Statesville'

"n architect should be consulted when considering doing wor to a building' They willnot only listen to any ideas but will also be able to suggest alternative options' (t is also

part o$ the architect)s service to help with planning permission and building regulations&and to ensure that the plan which is decided upon is strictly $ollowed by the builders'

Statesville "rchitecture will plan and design new buildings as well as the e*tension&conversion and conservation o$ e*isting properties' +e will guide the client through the

process $rom the planning stages until completion& depending on the client)s needs andthe scale o$ the project' The title o$ architect is protected by law'

Statesville "rchitecture could act as part o$ a design team or we may wor alone' This isdetermined by the si%e o$ the project'

Once appointed& Statesville "rchitecture will meet with the client to discuss ideas anddetails& such as the budget and li ely duration o$ the project' "n initial site visit will bemade and design proposals will be dra$ted and presented to the client' ,esearch must becarried out into the implications o$ planning legislation& building regulations and healthand sa$ety issues regarding land use and the planned development'

Statesville "rchitecture will build up an understanding o$ the implications o$ each project& having consulted potential users and clients about the design o$ theirenvironment'

The $irm will provide architectural services using technologically superior processes& providing greater value $or clients and enhanced design and construction'

The target client is segmented into $our categories home owners& developers&government and contractors' Statesville "rchitecture)s competitive edge will be the

nowledge o$ digital-based design resources' Superior customer service will also be a point o$ $irm di$$erentiation' First year sales are e*pected to reach .// by the end o$ the $irst year and increase to ine*cess o$ .// by the third year o$ operation'

0ear two will mar the $irst year o$ pro$itability with pro$its almost .// by the end o$ thethird year' Objectives


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The objectives $or the $irst three years o$ operation include1

To create a service-based company whose primary goal is to e*ceed customer)se*pectations'To increase the number o$ clients served by at least 234 per year through superior

per$ormance and word-o$-mouth re$errals'To develop a sustainable business that generates value $or their customers'To generate a pro$it& grow at a challenging and manageable rate& and to live up tothe industry standard ethical codes'Sales o$ .// in 233/ and .// by 233/'Mar et e*pansion o$ 234 per year'

Mission

Statesville "rchitecture) mission is to provide comprehensive architect services $or ourcustomers' +e e*ist to attract and maintain customers' +hen we adhere to this ma*im&everything else will $all into place'

Our services will e*ceed the e*pectations o$ our customers'

Keys to Success

5rovide a service that is technologically superior to the competitions'6tili%ing a diverse sta$$ o$ architects to provide a wide variety o$ product styles'" large array o$ global connections'


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Company Summary

Statesville "rchitecture will provide a service o$ architectural design via digital media tothe limits o$ technology' This approach will o$$er optimal e$$iciency to the $irm and

superior value& design processes& and construction methods to the client'

Company Owners ip

Statesville "rchitecture will be created as a corporation based in Capital city& Statesville'(ts principal investor and operator& 7ohn Smith& will own it'

Start!up Summary

"rchitects in one person practices can wor $rom home in order to reduce initial costs'5ro$essional standards must be upheld and a separate area and phone line should be made

available $or client wor ' ($ the practice operates $rom an o$$ice base& the premises should be easily accessible' " small o$$ice could be leased $or consultation and design preparation could be done $rom home' #ssential o$$ice e8uipment includes a phone9answerphone& $a* and mobile phone to eep in touch with clients' Computer "ided:esign ;C":< techni8ues may be re8uired to produce simulations o$ the $inished

building' This will re8uire a Mac computer or 5C& a laser printer and C": so$tware' "computer is necessary $or business correspondence and $or eeping details o$ worschedules'

Most design e8uipment will have been accumulated during training' This should includea drawing board pac age with stand& board& and parallel motion& a chair to accompanythis and a plan chest'

"dditional costs will include membership o$ the local architects associations rates arenormally around .233 depending on the length o$ time an architect has been 8uali$ied'

Other costs will include 5ro$essional (ndemnity insurance& a $ire-proo$ cabinet ;$orstoring drawings


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,ent .?&333#*pensed #8uipment .@&333

Total Start-up #*pense .?A&>33

Start-up "ssets Beeded

Cash !alance on Starting :ate .?>&333

Total Short-term "ssets .?>&333

Total ,e8uirements .=2&>33

Funding

7ohn Smith .?>&333

Other .?A&>33Total (nvestment .=2&>33

Company "ocations and #acilities

The interim o$$ice o$ Statesville "rchitecture will be located in Capital City& Statesvilleuntil dedicated o$$ice space is secured'


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Services

Clients will see Statesville "rchitecture

as e*perts - providing nowledge& e*perience and problem-solving s illsas leaders - setting standards in innovation and operational e$$iciencyas partners - building collaboration to support

(n the end& our objective goes beyond producing beauti$ul designs' +e want to createsuccess$ul projects - which means

#ngaging our clients and their sta$$sManaging projects s ill$ully"nticipating client and user needsSupporting decision-ma ing with nowledge

+e will wor to eep Statesville "rchitecture at the leading edge o$ design& and ourclients at the $ore$ront o$ their industries' +e are innovators& which is what we believearchitects should be'

Statesville "rchitecture has e*perienced principals and sta$$ dedicated to each o$ themar et sectors we serve' +hat they share is the ability to

,esolve comple* and sometimes con$licting issues6tili%e tools to enhance decision-ma ing& andSolve problems not just design buildings'(n short& nowledge and e*perience bene$it our clients'

"t Statesville "rchitecture project is not about us it)s about you' Our value comes $romthe service we provide as we consolidate client goals& user needs& design aesthetics andeconomic sense'

+e stri e these balances by guiding clients through a uni8ue& collaborative process'

Our sharpest $ocus is on

6nderstanding the design criteria $or each client)s business:esigning to reach the client)s needs and objectives(nvolving users& owners and employees strategically in the process

This is what we e*pect an architect to do'

+hy choose an architect


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There are various methods o$ choosing an architect' One obvious& but potentially ris yway& is to select one $rom the 0ellow 5ages' "nother is to base the choice upon a

personal recommendation' " third and recommended alternative is to contact ClientsServices at the local (nstitute o$ "rchitects who act as a bro er between clients andarchitects they will provide a list o$ practices suitable $or the potential project'

(t is not advisable to rely on )$ee-bidding) to locate appropriate services' (t is important tochoose the architect based on the 8uality o$ their service and product& not solely on the$ee' The client should as to see a port$olio o$ their wor and visit completed buildings' (tis a good idea to chec that they have wor ed on similar projects and have theappropriate design s ills'

"n architect should be appointed when carrying out any o$ the $ollowing activities1

"lteration to e*isting premises'#*tension to e*isting premises'

Bew buildings'+or s to a listed building or in a conservation area'Change o$ use o$ a building or site'Site9building development proposals'5lanning or en$orcement notice appeals ;these o$ten become necessary because anarchitect was not appointed in the $irst instance


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Submitting $inancial reports'Eiving advice on maintenance regimes'5roviding drawings o$ the building as built'

"ppointing an "rchitect

($ an architect is appointed& the $irst stage o$ their wor involves a discussion o$ there8uirements& budget& timescales and $ees' "$ter this discussion and the preparation o$ a$ull brie$& the architect will draw up a plan o$ action which should be agreed'

(n preparation $or this discussion& it is a good idea $or a manager to become $amiliar withownership rights o$ the property& e'g' rights o$ way or boundary $ences' (t is important tostay aware o$ what is to be achieved'

5lanning a Construction 5roject

The second stage o$ the procedure is $or the architect to visit the site in order to ma e anevaluation o$ what might be done' ($ a site has not been identi$ied& the architect may beable to advise on appropriate locations and accommodation' " s etch proposal may be

prepared at this stage as an initial point o$ discussion and agreement with the client'

" $easibility study can then be underta en by the architect& giving possible alternativeoptions o$ spatial arrangements and elevational treatment' ,estrictions may be imposedupon the design by statutory items such as building regulations& $ire and means o$ escape'

:uring this design process the architect will advise whether other consultant disciplineswill need to be appointed& such as a 8uantity surveyor& structural engineer& landscape

architect& mechanical and electrical engineering consultant and a planning supervisor todeal with health and sa$ety'

On smaller projects the architect may carry out their own survey o$ the land or building in8uestion' The cost o$ this is usually based on an hourly rate and is not included in the

percentage $ee 8uoted by the architect'

5reparing the "rchitect)s :esigns

Once the plan o$ action has been agreed& the architect will organi%e meetings and surveyswith all the other bodies involved in the project' (t is important to be aware that changes

to the plans may be necessary as part o$ the planning process' The meetings and surveyswill enable cost estimates and outline proposals to be prepared& leading to scheme designsdeveloped in conjunction with all the other bodies employed on the project' :ecisions on8uality o$ wor manship& materials& etc are made at this stage& to enable the 8uantitysurveyor to monitor the costs' " planning application may be submitted& $or which astatutory $ee will be paid by the client to the local authority' "s planning approval cannot

be guaranteed& it may be prudent to await consent be$ore instructing the architect to


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prepare building regulations documentation' "gain& the client will be responsible $orstatutory $ees& one at the time o$ $ormal application and $urther $ees $or site inspections'

Once planning and building regulation approvals have been obtained& the architect will bein a position to prepare detailed design drawings in consultation with the other disciplines

engaged on the project' The number o$ drawings will be dependent on the si%e andcomple*ity o$ the project and may be used initially by the 8uantity surveyor to prepare a!ill o$ uantities& and by the contractors at tender stage and then on site duringconstruction'

"rchitects and !uilding Contractors

The architect can now prepare production in$ormation and tender documents' Thisin$ormation is then sent to contractors tendering $or the wor ' The architect will provideadvice regarding the suitability o$ tenders submitted' Once a contractor is selected& theclient can as the architect to draw up a building contract between the business and the

contractor'Once the project is underway& the architect can visit the appropriate site at regularintervals to inspect the wor being carried out' The architect will convene site meetings&to which the client may be invited or will be given the minutes ta en by the architect& andthey will generally administer the terms o$ the building contract'

The architect can administer the terms o$ the building contract relating to the completiono$ the wor & give advice on maintenance and arrange $or drawings o$ the building

pinpointing drainage lines& services& etc to be provided'

"t various stages during construction& the architect will issue (nterim certi$icates $or payment to the contractor' :uring the de$ects liability period ;or retention period


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"rchitects) Fees and #*penses

The local (nstitute o$ "rchitects will have a scale o$ indicative percentage $ees basedupon construction costs& building type and nature o$ the wor ' Fees are usually charged

by negotiation on an hourly basis $or small jobs& or as a percentage o$ the building wor s

$or larger contracts' "ny agreement should also include stage payments& suspension&resumption and termination& e*penses and disbursements& variations and local ta*'


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customers& the company will decide what the target mar et is based on sales and trendse*perienced in the initial months o$ operation'

Market Segmentation

Customers may employ an architect $or design and construction o$ new properties& or $orconversion or e*tension wor ' +or can be gained $rom private developers and housingassociations $or retail& housing or industrial developments' !est Galue stipulates thatlocal authority contracts must be put out to competitive tender which has opened up wor$or civic developments' #stablishments not under local authority budgetary control mayre8uire architectural services' 6niversities may re8uire wor on halls o$ residence&libraries and con$erence $acilities' Dowever& these contracts will be subject to intensecompetition $rom established practices' The mar et is diverse& with an increase in leisuredevelopments such as sports and cinema comple*es and shopping malls' +or may also

be obtained $or new o$$ice developments and re$urbishments'

5otential clients $or Statesville "rchitectureHs mar et are bro en down into $ourcategories1

Dome owners:evelopersEovernmentContractors'

Domeowners are the largest group based on shear population and this will be emphasi%edin all o$ the $irm)s mar eting and promotional e$$orts' Targeting the remaining threegroups will be dependant upon establishing meaning$ul relationships& and responding and

8uali$ying $or re8uest $or proposals'

Service $usiness Analysis

Competition is $ierce& especially in cities with well- nown practices' "rchitects usuallywor $or small and large private practices and may be sel$ employed or wor on a$reelance basis' "round 2I&333 practices and ?2J&333 architects are registered in the 6'S'Most are small businesses& with between one and $ive chartered members' "rchitects mayalso be employed by local authorities or may wor in related areas such as journalism&teaching or research' Some architects are nown $or certain types o$ projects such as

public buildings or may speciali%e& e'g' in conversions or landscape architecture' For the

small practice& a wide range o$ wor is essential'

The architecture business across the country is primarily made up o$ small to mid-si%ed$irms speciali%ing in a particular type o$ architecture' !ut there are also a $ew large $irmsthat have almost dominated the design o$ large commercial and industrial $acilities'Statesville "rchitecture)s main competitors will be the larger $irms' The reason $or this isthat the larger $irms have more capital to wor with& which enables them to eep up withtechnological changes much 8uic er than a small $irm'


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Strategy and Implementation Summary

"rchitectural practices should advertise in the 0ellow 5ages and Thomson)s directories'Members o$ an institute are listed in its directory& which is also available on its website'

The institutesH client advisory service will deal with en8uiries and helps clients to $ind asuitable architect' There are no promotional restrictions however& most associations willemphasi%e standards o$ pro$essional conduct'

Contacts should be developed with potential sources o$ custom& such as local authorities&universities and businesses' " port$olio o$ previous projects& including any joint projects&is essential to show to prospective clients' " website would help to showcase the wor o$the practice' The press could be in$ormed o$ completed projects& especially any

prestigious or locally signi$icant contracts' Competitions and awards o$ten help to wine*posure& though they should not detract $rom client wor '

(n the $irst year o$ business& Statesville "rchitecture will $ocus on the downtown area inCapital City& Statesville' "s the $irm grows& sales will e*pand through out Statesville andacross the country& eventually spreading worldwide'

Competitive Edge

Statesville "rchitecture will charge $ees in line with the local (nstitute o$ "rchitects $eescale is a guide to architects and clients based on historic data' Fees can be negotiated&and $or larger contracts& it is important to $or the client to meet with the architect who will

be dealing with the project& as dealings with them could last $or a couple o$ years' Thiscan help in avoiding personality clashes or misunderstandings over re8uirements' Thiscan be a more important issue than the $ee' :ecisions should not be made on the basis o$$ee alone but on the overall value o$ service'

Statesville "rchitecture can demonstrate an ability to do a job within a speci$ied budget'+e will provide details o$ our pro$essional indemnity insurance and we will ensure thatthe sum covered $or each and every claim is ade8uate'

Statesville "rchitecture will be happy to discuss underta ing some or all o$ the serviceswith a commensurate variation in $ees'

Statesville "rchitecture is happy to discuss ideas with a client be$ore they are constrained by leases& loans& etc' +e may be able to identi$y suitable sites9premises $or the businessto consider'

This company will have a competitive edge over both the larger and smaller $irms because it will be composed o$ the new generation o$ architects that are $luent in thedigital world' Many $irms today employ an older generation o$ architects that $ind thecomputer a mystery& and those that do use the computer only have the ability to design in2-:'


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Sales Strategy

Sales in this business is a direct result o$ e*ceptional client service' (t is based on the$irm)s image and the re$errals that result' The more clients this company pleases& the more

re$errals are given' +e will wor to provide a positive e*perience in all cases so ourclients will re$er and return to us $or $uture wor as well'

Sales #orecast

Sales are bro en down into three categories1 design& production& and construction' Thesethree categories put together ma e up one architecture project' The totals $or each projectare based on a ?34 cut $rom the total construction costs o$ each job'

"ctual sales could vary depending on the project si%e and budget'


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Management Summary

This company will start with one "utoC":9Form- architect and the $ounder'

(n "ugust o$ 233"& a clerical position will be added and the month $ollowing anadditional C":9Form- consultant will be added'

!y 233"& Other C":9Form- architects will be hired to compensate the increasedwor load'


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Strategic %irection

S&O' Analysis

This is a summary o$ the business)s most important strengths& wea nesses& opportunitiesand threats'

Strengt s o( t e $usiness

#*cellent 8uality product )& ic means t at) "dds to reputation'

Eood management s ills' )& ic means t at) +ell run business

Eood ability to e*tract in$ormation' )& ic means t at) Can control the business' -

&eaknesses o( t e $usiness

Bew 5layer')& ic means t at) Credibility problem may a$$ect initial sales

Lac o$ systems)& ic means t at) The company needs to develop systemised operational sales techni8ues or sacri$ice pro$its

Opportunities in t e Marketplace

"dd-on products such as //)& ic means t at) " potentially enormous mar et $or N0O6, COM5"B0 B"M#to tap into'

Erowing mar et segments' )& ic means t at) N0O6, COM5"B0 B"M# should target these segments'

' reats in t e Marketplace


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(ncreasing supplier prices')& ic means t at) ,esulting in reduced pro$itability'

:eclining si%e o$ the // segment')& ic means t at) Beed to $ocus on growing segments to spread the company)s

port$olio


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' e Actual *lan

$usiness Objectives

Corporate Objectives ;Eoals<

Short Term Corporate

To achieve a sales level o$ .*****To achieve pro$it level o$ **4

Long Term Corporate

To achieve sales in 233! o$ .*****To achieve sales in 233C o$ .*****To achieve sales in 233: o$ .*****

Mar eting Objectives ;Eoals<

Nyour productP? Segment1 To achieve sales to .******P2 Segment1 To achieve sales to .******P= Segment1 To achieve sales to .******Other1 To achieve sales to .******

Bew 5roducts

To evaluate and launch new products or services which will turn over .****** in the $irstyear'

Other Objectives ;Eoals<

To not e*ceed a mar eting budget o$ .******To not e*ceed a payroll budget o$ .*****To not e*ceed a general overhead budget o$ .******

The major tas objectives $or each area o$ the organisation& together with responsibilitiesand timings are detailed in the ,oll-Out 5lan'


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Marketing *lan

M",K#T(BE O!7#CT(G#S

Sales Objective To achieve sales by QQ4 to .QQQ

Sales Objectives by Mar et Segment'

P? Segment1 To achieve sales to .******P2 Segment1 To achieve sales to .******P= Segment1 To achieve sales to .******

Other To achieve sales to .***

5,OMOT(OB"L ST,"T#E(#S

5rint "dvertising

:evelop a corporate brochure'7une 233"

"dvertise in local publications7an 233"

"dvertise monthly in maga%ines that are speci$ically targeted to the // and // segments'7an 233"

"dvertise monthly in maga%ines that are aimed at the general industry'7an 233"

Lead Eeneration 5rogram

Conduct monthly on-going lead generation program' Send out monthly direct mail lea$letswith response coupons' uali$y leads and ma e appointments by using telemar eting sta$$'

Oct 233"

Centres O$ (n$luence 5rogram


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5ersonally contact at least ten potential partners each wee '5roduce a monthly newsletter that shows e*amples o$ ;your products< and how customershave bene$ited $rom using them'

Oct 233"

5, 5rogram

5, release to be initiated each month to various trade journals and maga%ines'7ul 233"

Sales Force

#mploy telemar eting sta$$'Sep 233"

#mploy sales specialist $or // segment'Mar 233"

(mplement a new structural program $or the sales $orce& allocating sales reps to accounts andsegments rather than area'

7an 233"

Organise training program to be implemented'7an 233"

Lost Customers

Contact monthly all past customers that have not re-ordered to as why not and see whetherwecan win bac their business'

:ec 233"

Follow up #n8uiries

Contact all en8uirers monthly and determine i$ they have purchased $rom a competitor and&i$ so& why'

:ec 233"

#*isting Customers

Follow up all new customers two wee s a$ter they purchase to ensure they are satis$ied withthe product'

7ul 233"


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Send 8uarterly newsletter to e*isting customers to eep them in$ormed o$ our other products'

7an 233"

Try and up-sell all en8uiries $or our standard range to our premium range'

Feb 233"

Sales 5romotion

:evelop an ongoing sales promotion to target e*isting customers'"ug 233"

5,(C(BE ST,"T#E(#S

5rice LevelMaintain price level in all segments at **4 higher than competitors to rein$orce the 8ualityimage'

7ul 233"

:iscounts

O$$er *4 discount $or payment with order'7ul 233"

Manu$acturer)s "gents

5ay a **4 commission on retail price o$ all con$irmed sales orders passed to us by ourmanu$acturer)s representatives'

7ul 233"

:(ST,(!6T(OB ST,"T#E(#S

Channel

:istribute direct to the client where possible' 6se manu$acturer)s agents in outer regions'"pr 233"

E#B#,"L M",K#T(BE ST,"T#E(#S

Competitor 5ro$ile


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Keep updated competitor pro$ile'7un 233"

Mar eting in$ormation system

:ocument on every en8uiry Dow did you hear about us7ul 233"

:ocument on every order Dow did you hear about us '7ul 233"

5roduce monthly sales reports by product& by mar et segment& by territory and by salesrepresentative'

Mar 233!

#inancial *lan

F(B"BC("L Be*t 0ear)s Objectives

Bet 5ro$it To achieve $orecast net pro$it o$ .*****'Eross 5ro$it To increase the average gross margin $or all

products $rom **4 to **4'!udget To not e*ceed the $ollowing e*pense budgets'5roduction budget . *******Mar eting !udget . *******5ayroll !udget . *******Management Overheads . *******

F(B"BC("L ST,"T#E(#S

Cash Flow

#liminate cash shortage in the traditional tight periods o$ :ecember to 7anuary7un 233"

Collection :ays

,educe the average collection days $rom ** days to ** days'


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7un 233"

5ayment :ays

Maintain payment o$ bills& on average& to ** days'

7un 233"

#*penses

:evelop and implement new policies on approval and signatories on e*penses'Mar 233C

Leases

5ay o$$ the e*isting lease on capital e8uipment& thus reducing the monthly $inancial burden'

7un 233"Overdra$t

,educe the overdra$t $rom .****** to .*******7un 233"

+ages

5ay all wages on a monthly basis instead o$ wee ly'7an 233"

Bew #8uipment

Organise $unding $or the .******* e*penditure on new e8uipment'7an 233"

5aybac

#nsure a paybac on new e8uipment through sales o$ one year'7un 233!

(nventory

(mprove the number o$ stoc turns to ***** a year'7un 233"

,ent

Begotiate new terms on the premises and reduce e*isting payments by **4


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"ug 233!

!an Charges

,enegotiate with the ban and consolidate some outstanding loans with lower interest

rates' "ug 233!

Organisational *lan

O,E"B(S"T(OB"L "B: M"B"E#M#BT

Be*t 0ear)s Objectives!udget To not e*ceed the payroll budget o$ .*******Sta$$ To employ or re-deploy a total o$ ***** $ull-time

and part-time sta$$ over the ne*t year'

D6M"B ,#SO6,C# ST,"T#E(#S

Organisational

:raw organisational chart'"ug 233"

:evelop incentive scheme related to job re8uirements'"ug 233"

5olicies and procedures

:evelop policies and procedures manual'7uly 233"

#mploy or re-deploy sta$$

#mploy two machine operators'Mar 233"

#mploy one 8uality control sorter' May 233"


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#mploy telemar eters'Sep 233"

#mploy one specialist // salesperson'Mar 233"

#mploy one mar eting assistant'Feb 233"

#mploy one accounts receivable person'7ul 233"

Training

Carry out training needs analysis'7an 233"

Morale

(nstall suggestion bo*'7an 233"

Organise monthly meetings to $ollow up tas s7an 233"

architecture firm business plan

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