A practical guide to starting your own architecture firm from scratch
Learn all about what it takes to launch a startup architecture business and the best practices for managing the process well.
August 17 · 8 min read
Many aspiring architects and designers dream of starting their own architecture firm. And why wouldn’t they? Being your own boss, having creative control, and maintaining a high level of professional flexibility are just some of the most desirable things about having your own business.
There are different ways to start out in business. Regardless of your approach, however, keep in mind that founding your own architectural firm is a lot different from practicing or studying architecture. Moreover, architectural education is hardly ever extensive enough to equip students with the right business development skills to set up a successful architectural practice.
That’s why in this guide, you’ll learn all about what it takes to launch a startup architecture business, as well as best practices for managing the process well. Let’s get to it!
Is this business right for you?
Starting a new firm in the architecture industry will require dedication, loads of it. Therefore, it’s not just anybody that can embark on this journey and come out on top.
First of all, you can’t even think of putting up an architecture firm when you haven’t even completed your architecture education and licensure. Having ample years of experience as an architect is also important. Even if you only worked as a junior staff, experiencing firsthand how architecture firms operate will go a long way in helping you succeed when you decide to branch out on your own.
So yes, you must be a licensed architect and possess the necessary training, skill, and creative expertise if you want to start your own architecture company. But above all, you must be genuinely passionate about entrepreneurship.
The architecture industry is evolving
Trends come and go, but there are some that linger long enough to become the new standards in the industry for decades into the future. Before you start a new architecture business, it’s important to understand the ins and outs of the industry, and how certain trends can impact your approach.
The impact of a global pandemic reverberated across the architecture industry, bringing about much uncertainty. Stay-at-home orders and construction halts came flooding in and with them, a torrent of project delays and outright cancellations. What was once a generally stable sector became an industry scrambling for mitigating measures.
Architectural firms that were able to stay afloat during these turbulent times did so based on their ability to adapt and take advantage of modern tools and trends. Now that you’re thinking of starting your own practice, you’ll need to be aware of these trends too so you can plan the right approach. These include:
Even taller buildings
Diminishing construction space in major cities means architects must be creative with their designs and look to utilize what space is readily available. Super-tall buildings are the answer to this challenge. There might be limited space on the ground, but there’s more than enough space for vertical growth.
Emphasis on green practices
Eco-friendly building practices are fast becoming the standard in the industry. This trend is showing no signs of slowing down, especially since being able to design and construct buildings in an eco-friendly manner is a unique selling in today’s market.
Integration of 3D printing technology
3D printing technology boasts countless possible applications. It’s only a matter of time until it is seamlessly integrated into our design and construction processes.
Increased prefab and off-site construction methods
Everyone’s focused on reducing construction time and avoiding waste of resources. Prefab (prefabricated buildings) and off-site construction methods can help achieve these goals
Increased reliance on virtual reality and augmented reality tools
Many people are still working remotely and this trend is likely here to stay. This means we must find innovative ways to bridge that communication gap, especially when dealing with clients. Virtual reality and augmented reality tools can help architects display their inspired designs in a more engaging and interactive manner. These tools are essentially a game-changer in how you sell or showcase your services as an architect.
What is the target market for architecture businesses?
With an increasing emphasis on market segmentation, architecture firms are now specializing in specific areas within each segment. For instance, under residential projects, architects can specialize in smart home designs, historic homes, huge residential complexes, and so on. Under commercial designs and projects, there are sub-segments such as restaurants, energy-efficient buildings, hotels, and much larger projects.
Your target market is determined by the types of projects that your architecture firm works on. The more specialized the firm, the easier it will be to map out your target market, which in turn will drive your marketing decisions.
You could start by targeting potential clients in one or two specialization areas and then begin building your brand from there. But this means starting small with fewer prospective clients. If you have the capital, you can target multiple areas of specialization and access a larger potential client base.
What about growth prospects?
In terms of growth potential and profitability, the architecture industry has grown steadily over the past couple of years. If not for the pandemic, the industry was on course to record a 5% growth over the last five years.
That being said, there are a number of factors that can influence growth and profitability over the next decade, such as
- The size of the project — Large projects pay higher and bestow more prestige on the firm behind them. In fact, after completing some larger projects like sports complexes and mega-hotels, the architectural design firm can usually afford to simply bask in its success and hold off on actively seeking new projects.
The level of competition within that segment — There will always be competition in any money-making venture. Established firms tend to attract premium potential clients more than small businesses. However, a solid marketing strategy can help level the playing field, or at least improve your exposure to these prospects.
Your business development skills — How well can you navigate your business through turbulent times? How quickly can you bring in new business for your architecture firm? These essential business development skills are integral to your business’s growth.
External factors — Some things are just out of your control and so it’s your ability to adapt that will determine success. These factors include government regulations, economic uncertainties, natural disasters, pandemics, etc.
Requirements for starting a profitable architecture business
You already know that you must be a certified and licensed architect before you can set up your own practice. Here in the U.S., you’ll need to be accredited by the National Architectural Accrediting Board (NAAB). Once these licenses and accreditations are out of the way, it’s time to focus on laying the groundwork for your new architectural firm. Here are some preliminary requirements you’ll need to consider:
Establish business purpose and identity
This is an important requirement because it will help you formulate the right strategy and approach for your new business. Take a pen and paper and write down your answer to these questions:
- What types of projects and clients do you want to focus on?
- Are you planning to focus more on design or on business management?
- Are you planning to start solo or form a partnership?
- What are your core business goals?
- Are you looking to employ staff?
- What permits do you need?
- Do you need an office or can you and your team work remotely?
- How and where will you secure financing?
Even if starting your business as a sole proprietorship, there are still unavoidable startup costs. The actual amount needed to start your own architectural firm depends on several factors, including:
- The location of the business
- The business entity structure
- Your financial goals
- The size of the business
- Computer hardware and software
- Website development and maintenance
- Marketing and branding expenses
- Workspace equipment and furniture
- Cost of licenses and permits
A detailed business plan is absolutely vital as it serves as your roadmap to success. Whenever things are unclear or you find yourself losing sight of your goals, your business plan will serve as your reference point. It will help keep you grounded and on track.
However, just because you’re a brilliant architect or interior design genius doesn’t automatically mean that you can write a quality business plan. Consult with business development experts to help you organize your ideas into actionable strategies. Consider hiring an expert for the writing as well to save time and effort.
In addition to general business insurance, practicing architects need professional liability insurance to protect themselves and their companies. You might also need to get liability insurance for your employees, especially if they will be traveling to job sites and handling large projects.
Equipment and software
To get your architecture firm up and running, you need the usual tools of the trade. You don’t have to go on an all-out shopping spree, but whether you’re working from home or in the office, there are certain pieces of equipment and software you absolutely need. These include:
- Design software
- Furniture and furnishings
- Internet connection
- Telephone connection
Because you’re just starting out, you’ll want to keep your equipment expenses low. You don’t need the latest iMac or a full seat of AutoCAD just yet. Start small and purchase upgrades from there when you’ve landed a few solid clients.
That being said, do not skimp on quality especially when it comes to equipment you intend to use for a long time. Things like your computer, office chair, desk, printer, etc, are items that you can expect to use for the next five to ten years. If you have to spend a little extra now to get quality items, do so. It’s better than shelling out money for repairs or replacements down the line.
Long gone are the days when you could launch a startup without a dedicated website. A well-designed website is the foundation of your firm’s online presence. It’s where your prospective clients will go when they want to learn more about your architectural practice. It’s also the best platform to display your best works and attract new business.
There’s a lot that goes into successful website design. It will help to provide detailed design inputs based on your branding, but the actual web design and development process is something you should leave to the pros. Even though websites have gotten a lot easier to build, there are just so many other things that you could be doing with your time.
You can’t do it all. And you shouldn’t either. Succeeding as a business owner means knowing that you’ll need help and knowing exactly what you’ll need help with at the time. Focus on your own strengths and build a team around specific skill sets where you may be lacking.
This might take some time to figure out, especially in the early stages where everything seems to be coming at you all at once. But you’ll be able to figure it out if you keep working at it. Even if you’re not onboarding them full time, it pays to have a dedicated team on your speed dial so they can quickly come in and get things moving. With that in mind, build your team around these skills:
- Design — It’s likely you already have this one covered. But design inspiration is limitless and so it never hurts to get several great ideas flowing.
Project management** — Once those new projects start rolling in, you’ll need someone who is skilled in project management. They should be able to streamline processes and help you meet the expectations of your clients.
Business development — Someone who can identify growth opportunities and potential threats in the industry is always a great addition to a business team.
Marketing — This is a distinct and incredibly crucial role. For your architecture firm to thrive, it must have a steady flow of potential clients in the pipeline.
Human resources — Perhaps not an immediate need, especially if you registered a sole-proprietorship business entity. But start shopping around for one all the same. Better to have and not need.
Financial planning — This is another crucial skill that’s not covered in architecture school. Cash flow essentially determines whether your business is still going strong over the next five years or nonexistent.
Tips for landing your first client
This is the first important milestone after registering your architecture business. If you’re starting from scratch, you’ll want to get out there as quickly as possible and begin wooing prospective clients. Here are some great ways to go about and land that all-important first client.
Have a solid portfolio
Put samples of your best works together so prospects have an idea of what they’re dealing with. Extra points if your portfolio includes completed projects.
Use social media for brand building
Linkedin, Youtube, and Facebook are great social media platforms for creating brand awareness of your architecture firm.
Take low fee or pro bono work
Unless you already have some rep in the industry, you’ll likely need to take on low-fee projects or even pro bono work. Your goal here should be to keep your portfolio up to date with very real projects. This builds your credibility and brings you one step closer to landing your first client.
Participate in design competitions
Participating in competitions and local events is a great way to get your name out there. If you win the competition, you have an even bigger opportunity to create awareness. The spotlight will be on you during that period so make sure to utilize every second of it.
Communicate with your target market
By now you already know your core target audience. The next step is to establish your profile and communicate with them. Writing guest posts, public speaking, hosting a podcast or appearing on one, giving presentations to your local AIA chapter… these are all great options for communicating with your target market and building your credibility in the architecture industry.
As a final tip, do your best work at all times. Every satisfied client is a potential referral source. And in this business, referrals are everything.
Starting your own architecture firm can be a challenging process, but it doesn’t have to be. The important thing to remember is that it all starts with the right mindset and passion for being an entrepreneur. Take the time to get all the requirements and when the time comes, take that first step with boldness. Running your own business is often a rewarding journey, plus you’ll get to pick up some critical skills along the way.
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