How do we build a strong Architecture business?
Something that can withstand the lean years? Something that we love?
In Architecture as a business, everything we do can be distilled down to just 5 levers that we can pull.
Pulling each lever is an energy and time-intensive task, so we constantly divide our attention to find out which has the best leverage for our business at the time.
But pull we must, and because of the long timeframes involved, it’s very easy to forget what we’re doing and why we’re doing it! As professional Architectural business coach, I’ve developed my own method for keeping our eyes on the levers. I call it the ‘Volkman 5 + 2’ levers, and it goes something like this:
- 1. Get more and better leads. (improve awareness)
- 2. Convert more leads into paying clients. (get more clients saying yes).
- 3. Get more money per client. (improve the fees).
- 4. Improve delivery. (reduce operating costs, improve designs).
- 5. Get more referrals. (double a sale, by turning it into 2).
- +1. Improve team culture. (Make business enjoyable).
- +2. Reduce Director Stress. (Make your life enjoyable).
Despite everything we do in Architecture, ultimately it all boils down to applying effort to these levers, consistently over time, until the business lives where you want it to live. It’s slow, it takes time, and it works. And sometimes it may even feel like Sisyphus rolling a boulder uphill for eternity – that’s why the ‘+2’ of the system is so important.
This is what I do when I work with my Architect clients in Melbourne over the entire lifecycle of their business. And we enjoy doing it.
Let’s have a look at these levers in more detail.
1. Get More and Better Leads
This is the realm of the marketing professional, and it’s actually the easiest for a director to do. This is because it’s easy to dedicate 7% of your revenue to marketing, pay someone else to do it, and wait for things to improve.
Marketing is all about awareness – if twice the population knows you exist, you’ll most likely get twice the enquiries – assuming all other variables are equal.
A big instagram following, an easy-to-consume website, regular public speaking, a long list of awarded projects in popular publications, and great networking are the key building awareness. And all of this is tied in with a constant drip-feed of high quality news in an email newsletter.
Simple!
Unfortunately, it’s this simplicity that makes it so challenging to get right. Everybody can do marketing, and as a result, the market at any one moment is entirely saturated with content – far more content that your potential leads can consume. Despite this, it’s still easier than the other steps – and most Architects stop at point 1, and never pull the other levers with equal force.
2. Convert more leads into paying clients.
Far more effective than just marketing alone – Architects can improve their business by turning the same number of inquiries into more clients.
We do this by fundamentally changing how we approach our fee proposals and pre-engagement steps.
If we focus on a fee proposal, we focus on money. And if we focus on money, we compete on money – with every other Architect out there.
The Architects who thrive in this particular lever are those who focus on emotion – desire, prestige, ethics, or their own particular flavour of Architecture. There is so much we can do here to re-frame the conversations we have with clients, and it’s a constant process of renewal to find a better way.
3. Get more money per client.
What would you prefer? 100 low paying clients, or 10 fantastic clients?
All architects inherently know that low-paying clients are also the hardest to work with – everything is nickel and dime, and the quality of design suffers as a result. And right now in Melbourne and Australia-wide, we’re experiencing a minor recession that puts pressure on our fee proposals. The less we charge, the less design we do. The less we charge, the worse the client. It’s a downhill spiral.
We can constantly apply pressure on this business lever by refocusing on what it means to get more money per client.
- Is it by getting more disciplined about variations?
- Is it about providing options for paid scope increases?
- Is it about providing more value?
There are endless ways that Architecture firms can improve overall fee per client. And usually it’s a mix of several methodologies – not just cranking up fees at the fee proposal stage.
4. Improve Delivery
Of course, every large business knows that efficiency is king in protecting your profit margins. But Australian Architects are at odds with this, as going too fast can ultimately result in rubbish designs, and a lack of prestige.
Therefore when we look at improving our margins, we’re actually looking at the antagonist-pair of requirements: improve designs while also reducing costs.
We do this by changing our design process.
- Reduce non-key deliverables.
- Focus on the mainline design, and keep explorations simpler until they’re approved.
- Spend more time on briefing and ideation to get client approvals prior to heavy Revit and Enscape explorations.
- Set up proper processes and checklists.
Apart from being a business coach, I also spend 2 days per week as a fractional practice manager for various Melbourne Architectural firms. This allows me to keep my registration and CPD flowing, and stops my business coaching from losing touch in a rapidly changing environment.
And I can say with certainty, that your practice manager can do wonders in this business lever – there is so much to be gained not in creating more speed – but in figuring out what creates great design and stripping back the extraneous work that we’re all so keen on doing.
5. Get more referrals
In the Architecture firms I work with, I always ask – do you have a list of previous clients, and when was the last time you saw them in person?
The answer is usually – ‘I haven’t seen them since the photo shoot’.
That’s ok – some clients really aren’t worth our time and energy, and it’s cathartic to send that final invoice and never speak again. But for all the other 70%, inviting them to events, and keeping the connection strong can be the key between one project, and an entire group of projects coming from their extended network.
Your strongest ally is a past client – they have your product – they love it – and they want to brag about it! Pulling on this lever is all about leveraging this relationship to get more clients, and renewing the process all over again.
But the Business levers aren’t enough…
Just doing great business in Architecture isn’t enough. We also need to love what we do. So the ‘Volkman 5 + 2’ levers can’t be complete without two more.
+1. Build a Great Culture.
When we love what we do, all of this becomes so much easier to implement. Staff-engagement multiplies our efforts, and propels the entire machine that is your Architecture business.
Going for barefoot bowls once a month with the team isn’t optional. Building the work culture you want is as necessary as hitting our billings targets. Better culture means you retain the better staff. Better staff means the other levers naturally improve.
Better work culture means you’ll enjoy being at work – and that means you’ll actually work on the levers.
+2. Reduce Director Stress
And lastly, there’s not point doing anything in life if ‘number 1’ isn’t looked after. And money is only one of the pillars of a successful life. You also need satisfaction, security, health, and happiness.
Everything we do should also involve an element of reducing the stress on the director – spreading the load evenly amongst as many people as possible.
Because a stressed director is a paralysed director. And a paralysed director creates a paralysed business. Joy is the fundamental underpinning of building a strong Architecture firm.
As an Architect-Director, You need help.
As a former CEO, and now Architectural Business coach, I work with businesses in Melbourne and as far away as Malaysia. And I can tell you one thing. When you’re in the business, you can’t keep your focus on the 5+2 levers. It’s mentally impossible. You’ve got a client who’s annoyed about a planning delay. You need to review your insurances. Autodesk just pumped up their pricing… again.
The moment you have enough space in business to pay yourself a decent salary, you need to look for external help to keep you focused on the business levers. And the best help you can get is an Architect who specializes in business. When the time is right, get in touch, and let’s see your business thrive together.
