All of these books have greatly influenced my leadership in guiding the growth of my business and. Much of the research I have done and learned from is the basis of the content of this book.
CONGRATULATIONS
I remember the first year of business; it was the most romantic period in my design career. It was so simple, I did everything: plan, draft, write specifications, write proposals, calculate the timeline and translate it into an invoice.
SO YOU WANT TO START YOUR OWN DESIGN FIRM?
One of the most difficult transitions for any designer to understand, accept and practice is the translation of design efforts into a business language that is measurable and meaningful. Running a business (design firm) can provide some of the most rewarding accomplishments and some of the most gut-wrenching setbacks you will ever experience.
CAN YOU BEAT THE ODDS?
I was running projects and proving myself to the company's clients, and I felt that I only had to prove myself and to the clients. It made me decide to leave and start my own company and not work for another company. The marketing guy sold the company's experience and brought in the new work. The oldest partner was the firm's patriarch.
FACING THE HARD QUESTIONS
It was an old line firm and the other directors thought I was full of too much piss and vinegar. When my mentor died, every rung on my ladder to the top was well sawn to prevent me from achieving my ambitions to succeed. in the firm. I was tired of always showing off to other directors and I certainly wasn't going to prove myself to the directors of another firm.
WHY DO YOU WANT TO START A DESIGN FIRM?
You can always get another job at another design agency or, heaven forbid, make a career switch. You are responsible and accountable for all your actions. You cannot fire yourself.
ENTREPRENEURS
However, you may want to ask your friends and Ⲑor close colleagues to rate you in order to get a more objective review. If you can be brutally honest with yourself and you don't have problems in some areas, one option you have is to consider having a partner to address those areas of need that you don't.
WHY DO DESIGNERS WANT TO START A FIRM WITH A PARTNER?
My studio colleague and I were fired on the same day. We've both worked on residential projects, so we decided to help each other and form a pilot partnership for the next two months. What do we have to lose. Remember the question in Chapter 1 under "So you want to start your own design firm?" These are the questions you should ask your potential partner.
WEIGHING THE ADVANTAGES AND DRAWBACKS OF A PARTNERSHIP
Consider having a good friend, colleague, or business advisor join the discussion so you can get a different intellectual perspective on your outcome. WHAT CHARACTERISTICS MUST MY PARTNER(S) HAVE IN ORDER FOR US TO DO IT OURSELVES.
WHAT CHARACTERISTICS SHOULD MY PARTNER(S) HAVE SO THAT WE WILL MAKE IT ON OUR OWN?
If you take the time to pass the partner health test, you'll be light years ahead of most partnerships in practice. Will my partner be there in good times and bad, in sickness and in health, for richer or for poorer.
FISH, OR CUT BAIT?
I design, I draw, I specify, I build models, I invoice, I write the proposal, I write contracts, I buy insurance, I answer the phone, I work on the computer, I work late at night, I visit the workplace, I program, I plan space, I check requisitions, I check shop drawings, I market, I do everything. How can I promote myself if I'm at the office all day, or on a job site, or traveling all day.
INVESTING IN YOURSELF
Countless hours were spent in the design studio unwinding endless rolls of bumwad looking for the best design solutions. One of the most difficult issues to deal with is money, or lack thereof. When you start a business, one thing is certain: more money is going out than coming in.
THE JOURNEY BEGINS
My goal in the first year of business was to reach my salary at the old firm, which was $16,000. Well, when I did it in six months, I thought it was an aberration. Most people who have never started their own business think that everything is easy and that you can take time off as you please, go places and do as you please. The truth of the matter is that it's easy to enslave yourself in your firm. .
VISION
VISION AND GOAL SETTING
But trying to imagine the rewards and obstacles you'll encounter in the future is a fun part of the business game. The fact of the matter is that vision, drive and imagination are your road map to and through the future.
GOAL SETTING
I will be working for another company that will challenge me more and appreciate my design talent.” I'm waiting for the right opportunity to come, and afraid, I'm leaving this company alone!”.
GOALS FOR YOUR DAILY ROUTINE—AND BEYOND
An average of 160 hours of billable time per month An average of forty hours of administration time per month. Two hundred marketing cold calls per year Three hundred new marketing leads per year Two thousand hours of billable time per year Four hundred hours of administration time per year.
MONITORING EFFORTS AND RESULTS
The surest way to destroy a man who does not know how to handle money is to give him some.”. I know I need an accountant because I don't know how or when to file my income taxes for my company.
FINANCIAL CONSIDERATIONS
First of all, I really don't understand what accountants do, and I don't know how to read financial statements. I invest my profits and dollars back into my business and myself because it is the best investment I can master.
WHAT ARE YOUR FINANCIAL NEEDS?
Now that you're a bona fide candidate to start your own business, you need to face the main problem that all business founders face: money. How much do I need to get started. Baseball teams measure success in runs, football and basketball teams in points, companies in dollars.
HOW MUCH MONEY DO YOU NEED TO INVEST TO GET STARTED?
Maybe working from home is right for you and your new firm. Cheap business cards will do the trick in the beginning rather than overwhelmingly expensive ones. Only you can answer these questions. The point here is to think before you act to spend that precious commodity cash in the beginning. Think it through.
SOURCES OF CAPITAL
LEARN HOW TO SPEND MONEY
When you spend money for the benefit of the company, think that you are not spending money for "you" but for someone else, perhaps that "other you". Think twice. But when it comes time to "cut overhead," a budget will be a valuable tool to help you understand how your business works and make it easier to "find the fat."
LEARN THE IMPORTANCE OF CASH
It's better to call a customer a week in advance to get money than to wait until a major account payable is due and interest is due. If you and your client agree that you will be paid in thirty days, ask for payment on the thirtieth day.
ESTABLISHING FEES
And why did the company pay you $18 an hour while charging $55 an hour for your time. Why should you charge clients $95 an hour to design or consult with them and then when you go back to your office, charge them the same $95 an hour to draft or prepare a specification.
WHAT SHOULD MY AVERAGE HOURLY RATE BE?
If you are lucky enough to get a client to pay you the previous company's rates, you are facing a very profitable project. You will find that when you have to compete for a project against other firms, price sometimes influences the choice of a designer.
WHAT IS OVERHEAD?
Auto miles traveled to and from a project CADD supplies directly attributable to a project Office supplies directly attributable to a project. Payroll directly attributable to a project (normally 80 to 90 percent) ShippingⲐshippingⲐdelivery directly attributable to a project.
PROFIT
They take on a project for what they think is "cost", no profit, and don't understand how they end up losing money. Many get huge commissions this way and if they don't manage the projects properly, they will go bankrupt in no time.
FINANCIAL RECORDS
Looking at the big picture, if you need money from a bank for equipment or a line of credit, the bank wants to deal with a profitable business, not a red one. Some businessmen keep a special notebook to keep track of their expenses in the beginning. You will be surprised how quickly the money comes out.
BOOKKEEPING
Your new company is not the federal government. You cannot print money or spend more than you can collect. A good bookkeeper understands payrollⲐgeneral ledgerⲐliablesⲐreceivables, not just one or two of these categories.
Need an Accountant?
See your accountant as an important person who cares about your business and your success. Also, if your accountant is not performing for you, fire him or her and retain the services of another accounting firm.
SETTING UP A BASIC ACCOUNTING SYSTEM
There are dozens of basic accounting software packages available for the small startup business. If you think you need a computer and don't know how to use one, stay on the plane a little longer.
CASH VERSUS ACCRUAL ACCOUNTING
DEPRECIATION
There are other methods of depreciation such as sum of the years' figures and double declining balance. For tax purposes, you must apply the same method to an asset over its useful life, unless you obtain permission from the IRS.
LEARN THE BASIC IRS RULES FOR BUSINESS
You may be a very proud person who has been calculating all your personal tax returns for years, knowing that you can work out the tax forms as well as any accountant, and that you are doing this to save money. Accountants know the ins and outs of tax law much better than you do. You wouldn't allow them to design a space in their own building; why not let them do all your tax planning?
TAX LAWS
Every business must keep financial records and submit relevant tax returns for a given tax year, which is either a calendar year or a fiscal year. However, the IRS will allow these business forms to adopt a fiscal year format if there is a valid business reason to do so.
TYPES OF TAXES Income Taxes
Should a problem arise with your tax calculations, your accountant can represent you and your business interests with the IRS. If you don't have one, call the IRS and get Form SS-4 to file for one.).
THE IRS AND YOU
State income taxes, like federal income taxes, are based on your net income or net profit. Most states simply calculate state taxes as a percentage of the income shown on your federal return.
FAILURE TO FILE A RETURN
If you don't declare your income and the IRS audits you and finds out, be careful. Don't miss a payment, because if you miss it, it takes forever to avoid the IRS computer.
BANKING CONSIDERATIONS
A bank is a place where they lend you an umbrella in good weather and ask for it back when it starts to rain.". A bank is a place that will lend you money if you can prove that you don't need it."
BANKING SERVICES
The first rule of "selling the banker" is to show confidence in yourself and your new company. The third rule to follow when visiting banks is to remember that you are doing the banks a favor by bringing your new venture to them.
WHAT DO BANKERS KNOW ABOUT THE DESIGN BUSINESS?
Many new business portfolios consist of contracts with clients from the owner's previous place of employment. They will check the credibility and creditworthiness of your company with suppliers and consultants with whom they have a banking relationship.
WHAT CHARACTERISTICS DO BANKERS LOOK FOR IN A NEW DESIGN FIRM?
If your company isn't profitable or has poor cash flow, chances are the bank won't give you a loan. Having a tangible asset backing each loan means that if something goes wrong with the loan, the bank is covered.
APPLYING FOR A LOAN
N The borrower must be adequately capitalized. This can provide the necessary protection to protect the bank if the business fails or if business and economic conditions change. If you are not someone you can trust, the bank will not deal with you.
BANK ETIQUETTE
You give the impression that you really know what you are doing and that you get what you ask for. If you are late and do not communicate with the banker, your credit will suffer.
MARKETING CONSIDERATIONS
I started my business two years ago, and I was so focused on getting the work done that I never took the time to go after new work because I just didn't have the time. We've been so busy and committed to completing this major project over the past six months that we didn't spend any time looking for new work. When we finalized the construction documents of the project, our client went bankrupt. We had no other work designs.
HOW ARE YOU GOING TO MARKET YOUR NEW FIRM?
WHAT IS MARKETING?
You are given the name of the person who owns the business and who will make the decision to engage the necessary designer. You contact that person (leader) directly, either by calling them on the phone and talking to them directly or by leaving them a voice mail, sending them an e-mail, writing them a letter or visiting them at its current retail space. In fact, every employee you hire in the future will be an ambassador for the firm.
SHOULD YOU CONSIDER RETAINING A MARKETING CONSULTANT?
Likewise, if you're self-employed, you don't need the image of a company with five hundred employees. The most important thing is to make sure that your company image is consistent with who you are, your values and what you do.
SELECTING A NAME
For example, if you choose to include your name, George Apple, in George Apple AIA,Architect, most people who come across this name will assume that you are a sole proprietor with few or no employees. Some customers feel that if you use a fictitious name, you are hiding behind it. But for most, the name is not important, because they contacted you and want you and your company to design a project.
SERVICE OFFERINGS
Preservation of a historical monument Construction documentation Services in the phase of negotiationsⲐoffers Construction administration Self-estimation of costs Expert testimony Post-occupancy services Engineering. Construction Documentation BiddingⲐnegotiation Phase Services Construction Administration Internal Cost Estimation Value Engineering Forensic Engineering Energy Consulting CADD Systems Autocad.
NICHE MARKETS
WHERE ARE THE OPPORTUNITIES?
By talking to family and friends about your plans and aspirations, and asking directly if they know anyone who might be a source of information, you can add more contact opportunities to your list. Take it a step further and ask them if they can recommend contacts or know anyone on your lists above.
PROMOTIONAL MATERIALS
All your good work in crafting an attention-grabbing cover letter can be ruined with one phone call to a referral who doesn't want to be bothered. And the beginning of your letter is the perfect place to show that you will be brief and to the point.
WRITING A PROPOSAL THAT SELLS
- SCOPE OF WORK
- PHASES
- SUMMARY OF FEES
- EXCLUSIONS
- ADDITIONAL SERVICES
- REIMBURSABLE EXPENSES
- MISCELLANEOUS PROVISIONS
- ACCEPTANCE
Describe each phase, when and how it begins, what you will do, and what the product of the phase is. Always offset the value of the down payment against the last invoice of the project.
SELLING
Even before you develop your proposal, you should ask the client a few questions to help you demonstrate that you are extremely interested in the project and that you care about the client's needs. Listen and take the time to effectively communicate how you will address the customer's needs better than the competition.
PRESENTATIONS
What you should hope for is a client who chooses the successful firm based on its qualifications and proposition, and that the client believes the design firm's culture is a "good match" for the client's entity. The most important thing you can do in this case is to try to be debriefed by the client.
MARKETING IS A WAY OF LIFE
Remember, your vision in indirect marketing, direct marketing and sales is to get the customer to say yes. Structure your sales strategy so that you are comfortable with your presentation to the customer.
LEGAL CONSIDERATIONS
NEED A LAWYER TO HELP START MY FIRM?
You must verify all aspects of corporate law in your country regarding this form of business before committing to it. Each partner is also liable for the negligence of another partner and of the employees of the company.
KEEP IT SIMPLE
Some states do not allow design firms to operate under the name of "Limited Liability," due to the perception that the design professional has "limited his or her liability" with respect to protecting the public's welfare and safety. Embrace your responsibility for knowledge of the current business and legal issues facing the design discipline in your region.
INSURANCE CONSIDERATIONS
Simply by not owning three medium-sized castles in Tuscany, over the last forty years I have saved enough money on insurance premiums alone to buy a medium-sized castle in Tuscany.”
NEED INSURANCE WHEN I START MY FIRM?
You cannot afford to lose the assets of your new firm early unless, of course, you are individually wealthy. This is another aspect of the business that everyone expects to be handled by the firm's leadership.
OBTAINING INSURANCE
TYPES OF INSURANCE
If you operate your business from home, you probably have fire and theft insurance. If you die prematurely, the outstanding balance of your loan will be repaid.
PROFESSIONAL LIABILITY INSURANCE
This coverage will be as expensive as or more expensive than your professional indemnity insurance premium in your early years. Taking out professional indemnity insurance does not mean that you admit that you are not perfect and that you will make big mistakes.
PRACTICING DESIGN WITHOUT INSURANCE
It sends a signal to clients and other consulting designers that you care and have invested in risk management to protect your new asset, your business, just as you protect your other assets in life. N Buy a policy with a reasonable and realistic deductible that you can afford, or borrow from a lender.
MANAGE YOUR RISK, FOLLOW YOUR GUT
At first, I refused to work from home because home was an apartment - and I doubted that I would be disciplined enough to work so close to a refrigerator and a television. At first I was very proud of this important event; however, as soon as I wrote the amount, I immediately thought of the next twenty-three checks I would write in the future.
WHERE IS THE RIGHT LOCATION FOR YOUR FIRM?
I don't know, it just made me more comfortable dealing with the risk of the lease.
OFFICE AND EQUIPMENT CONSIDERATIONS
Do you want your customers to meet you in your kitchen, or in your office in the basement or on the second floor? Should you choose to work away from home in the beginning, the best decision you can make is to set up one.
HOW DO YOU NEGOTIATE A LEASE FOR A SPACE?
If you default on the lease and leave before the end of the term, the deposit money goes to the landlord and you are free from further liability. A good rule of thumb is to spend no more than 5 percent of your total annual budget on occupancy (your lease and expenses).
EQUIPPING YOUR NEW OFFICE
COMPUTERIZATION
You can work on it at home, in the office, on the train, on the plane or even in the client's office. If you get through the learning curve before starting a new business, you'll find that business and professional software will ease your business growth transitions, speed up your operations to make your business more profitable, and, in the big picture, run your business faster. to success.
TELEPHONE EQUIPMENT
In the past, you may have had one computer that lived in the office, or you may have had a home computer as well. As we live in the information age, the telephone will become more and more advanced and sophisticated in the business world.
MOBILE PHONES/MOBILE E-MAIL
PERSONAL DATA ASSISTANTS
FINALLY
Try, try, try, and keep on trying is the rule to follow to become an expert in anything.” Our goals can only be achieved through a means of a plan, in which we must believe fervently and upon which we must act with vigor. There is no other path to success."
WHAT IS A BUSINESS PLAN?
DEVELOPING PRELIMINARY
BUSINESS AND MARKETING PLANS
- INTRODUCTION Company name
- THE FIRM’S CONCEPT Summary on one page
- THE FIRM’S OPERATION Location and space
- THE FINANCIAL PLAN Financial forecast
- APPENDIX List of references
The most important aspect of a building is the construction of its foundation. The entire success of the project (will the building stand up?) depends on the foundation. This section should be brief, outlining your fees, costs and expected profits for the year. The summary will serve as a reference point for future comparisons.
SAMPLE BUSINESS PLAN
BACKGROUND
The company was founded with a portfolio of primarily residential and small commercial projects. Throughout the early 2000s, the company sought to develop and maintain a commercial and institutional customer base that expanded across East Coast markets. In 2005, with the expected downturn in the economy, the company began to focus on developing a strong institutional client base, including government, healthcare and education commissions. The company continues to have a strong home design portfolio in the multi-family, speculative, custom single-family home segment. and additive markets.
BUSINESS CONCEPT Outlook
Many of the larger companies have reduced their staff, which has created many smaller "one-man businesses". Due to the economy and available developed structures, the construction industry will be heavily concentrated in renovation and.
BUSINESS OPERATION Location
We started our interior division five years ago, expecting it to grow, to entrench our business in the lean "design" times ahead. The interior work is lucrative and helps open doors to the healthcare industry. We expect our interior group to make and possibly exceed the 30 percent volume of the firm by year-end. This central Apple County location provides our firm with unparalleled access to our client base in Apple City, Apple County, MacIntosh County and Winesap County. We have easy access to the interstate highway system to provide service throughout the state. The firm is in year two of a five-year lease on the premises. We feel that this current office space will meet the needs of our staff and clients through 2009.
WHAT IS A MARKETING PLAN?
After a decade of developing a comfortable client base for commercial and residential clients, in 2005 the firm began taking on a broader range of larger educational and institutional design work, including religious and federal government (Corps of Engineers) work. The situational analysis is a written "snapshot" of where the company is now and where it has been.
SAMPLE MARKETING PLAN
REALIZING YOUR BRAND
DESIGN YOUR SUCCESS
If you listen to your fears, you'll die not knowing what a great person you could have been." No one understands the life, trials, and tribulations of the founding entrepreneur businessman. Your family, friends, and clients don't want to hear about your problems because They don't think you have any. You have your own business, so you must be successful.
FEAR, RISK, AND GUILT
Just as you get comfortable with the "milestone" goal of having your own firm—not having to listen to anyone else, being able to run the show—. Many designers get right to the point of putting up their parachutes, but then - after talking to colleagues or reading a book like this - they refuse to jump out of the plane because of their fear of failure and rejection.
WHAT IS FEAR?
Fear is an emotion that lives with each of us, every hour of every day, and will continue to live with us until our grave. Whether it's passing a test, catching that plane, getting that job, persuading a client, or having that baby, we will always show concern over events in our lives. Remember, when it comes to growing a business, it's not what you know, it's who you know.
WHAT IS RISK?
Think about senior executives in your current or former company. This comment probably sounds familiar to you: “That's not how we do things around here. Always stay true to your principles and you will successfully overcome the challenging obstacles of daily changes in your new business world.
WHAT IS GUILT?
They take risk because they know that only through risk will they find true value. The key to the decision to take risk is to develop a sense of the degree of a risk.
MANAGING RISK, FEAR, AND GUILT
Exercise to handle stress, eat well to maintain good nutrition – the necessary fuel you need to have a clear mind to face everyday challenges. After the first few hours it can be a quiet time to focus on the important decisions for which you are ultimately responsible.
REFINING YOUR DAILY ROUTINE
If you allow yourself to become a time clock, you will be successful, but only successful in one aspect of life: time management. You will be more productive and organized; you will seem more logical.
THE VALUE OF A TIME MANAGEMENT SYSTEM
It is backed up on your computer and if you lose or break it, the data can be recovered. Your time management system is your best friend in planning for the future and documenting the soon-to-be-past present.
THERE ARE ONLY 168 HOURS IN A WEEK!
To be successful in running your business, you will have to face more and bigger challenges every day. No one wants to be treated as important only part of the time. You need to "partner" the different areas of your life and develop a way to make them work together.
MAINTAIN A CRITICAL BALANCE
These time constraints make it important to maintain a balance between the business, personal, professional and family demands of your life. Never in your life has every hour of every week been so important.
SUCCESS
