focus, and that has cost us quite dearly. So that's the first one architect practices typically aren't that profitable. Number two, overwhelmed stress and fatigue, are quite common in the business, no financial literacy. There. Again, as I was saying, there's no focus on profit, financial reporting is missing. Perhaps it happens once every six months, once every quarter. With the bookkeeper. I often speak to bookkeepers of architecture practices. And it's not uncommon for them to tell me that they're preparing these quite the you know, important reports that the practice owners end up just completely ignoring, not understanding or haven't delved into so no financial literacy, which is then meaning that the businesses end up being unprofitable, which ultimately ends up in a business being overwhelmed, stressed out, business owners being fatigued, team members being fatigued. So the third thing that I'll often see in businesses is that they're very poorly organized. So the classic poor organization would look like the Architect at the top and then a flat hierarchy underneath. This causes a lot of issues because we will end up inevitably getting to the bottleneck, ie that all decisions end up having to go through the person at the top. The reason for this, interestingly, as an architect, is not uncommon for architects to run a business and then hire less experienced people around them. Therefore, they become the most experienced person in the business. Therefore, they are going to be pulled into every problem that the organization has or every project issue that the business has, because they're the only ones have the technical ability to be able to resolve it. If we look at a skilled entrepreneur. And interestingly, when I see architectural businesses or design businesses that have been set up by non architects, they often work very well because the person at the top has surrounded themselves with brilliant people or people who at least are more competent than they are at doing the work. Therefore, they have a team that can do and deliver the services. Whereas they have inherently they built themselves a position where they can go off and do more partner types activities from winning work to perhaps top down or very high level strategic concept work to actually the supporting the work types of activities, from HR, to business systems, to profit levers, for example, financial optics, that whole world of supporting the business is quite important and is often neglected. So the organizational structure of a business, when it's not working, will put a stranglehold, if you like, on to the profit in the business reducing the profitability of an organization. The fourth problem that I often see in a business is that we've got the practice owner or the organization itself trying to be everything to everyone. all at one time, what this might look like is the inability to say no to certain types of projects, the inability to say no, to clients are not knowing where to articulate and drive or draw out boundaries for the way that you communicate with somebody. Again, this means that your resources ultimately become limited because there's no hierarchy. There's no priority, in what should be answered. What sorts of projects should you be saying yes to? And most importantly, what you should be saying no to there's a great Steve Jobs, quote, where he's talking about this art of saying, No, I think it was Johnny Ives, the designer at Apple, who was talking about how ruthlessly focused Steve Jobs was where Steve Jobs knew, he had to say no to a lot of things. And he knew that you'd have to say no to a lot of things, even if they were great ideas, even if they were great ideas that had the potential to make a lot of profit, and a lot of money for a business. Once you've said yes to the right thing than it meant saying no to lots of other things that were also the right things. So the possibility that I'd like to create for an architectural practices, number one, that we're running an organization that the very least, is hitting a 20% consistent profit margin. And for the high performance businesses, we're looking at 30%. And beyond number two, the business has a sense of freedom and ease. There's financial fluency inside of the organization. There's eyes on how money is operating, there's transparency throughout the organization. And then you've got things like Project architects, and project managers are acutely aware of how much of the fee that they're burning through part of their KPI is making sure and directing projects so that they remain profitable. So we've got overall financial optics and a financial eye and understanding to have a business that's profitable, and one that has a certain degree of freedom, ease and more fulfillment, we're looking to try and find a well organized business. So this is one that has a clear hierarchy involved. Leadership Teams are very useful here, or using a studio unit type of structure. Where you as the business owner are not the bottleneck, there may be two other senior people that the rest of the team reports to before they end up asking every single question from you. Also, we're looking at finding businesses that have been structured with a lot of expertise that the business owner is hiring people who are more competent than they are to be able to do the work. And then we have businesses that are focused. So they're not trying to be everything to everyone all in one go. But they've actually got a very good understanding of what they need to be saying no to, and what is the priority for their organization. So we're going to look at a number of different types of business models here different ways that you can structure and organize your business to make it much more profitable. And for it to work really well. So the first one I'm going to talk about is what we call the digital micro practice. So this is a business that has got perhaps no office, it's very low overhead. You might be doing everything remotely. You're certainly taking advantage of what we call geo arbitrage. This is what we see happening a lot at the moment where people are using outsourced teams perhaps in India. We've got a business here, business architecture based in Delhi called City wise, and what they do is they have a specialist team of Revit drafters and it's relatively easy for them to expand with capacity there being a lot more trained and skilled talent there and And this office ultimately becomes like a plugin office to a business in the US or in the UK. So much more sophisticated than just say CAD drafters who are outsourcing, one of the things that we find that works really well with this, with this is having somebody at the helm, who understands both local working practices and how to give instruction to people that might be on in India, for example, as well as understanding the business practices in the design culture of somewhere like the US or in the UK. So having that kind of intermediary person who understands both is very, very key. So we have a client actually, who has an office here in the US in Washington, DC, and they also have a office in Chile. So the one of the partners is originally from Chile, so has a very good understanding of local talent, their understanding the design culture speaks the language, obviously. And they found a lot of success in being able to outsource or not even outsource but just have a lot of their production work actually be delivered in Chile. And it means that they can have a kind of very efficient core business that is working in the US. So we're seeing this more and more, it does take a little bit of practice to get it working. And I certainly think there were loads of really fantastic organizations these days well teams is a brilliant platform that has, you know, all sorts of talent that you can get from across Latin America, you'd be quite amazed at the sorts of experience that you can find using these sorts of platforms, certainly a lot better than something like Fiverr, I wouldn't necessarily use Fiverr for architectural talent. Up work, you might find a little bit of, you know, it's not my favorite go to for sure. But something like well, teams, you've got very specific architectural talent there. And the operators there will be able to put you in contact with what kind of people that you need. So taking advantage of geo arbitrage, certainly from a small organization, you'll often find that the rates that you might be paying somebody in Latin America or in India, will be going going to be quite different to what you're going to be paying in the US plus, you don't have to have the additional cost of health care and benefits. And these people will be contracting with you typically. So they're running their own organizations, you'd be paying them per project, in many cases or by the hour, you don't have to have a new seat for them in the office, you don't have to have CAD licenses. So it can be a really lightweight and efficient way of doing it. Also, the experience that some of these people have got from other places is fantastic. And we've also seen this actually been a quite a nice way of, you know, kind of contract workers in different countries who have got the longer term goal, for example of coming to the US or the UK, we've seen it before where those businesses then have sponsored those people to come over to the region that they're actually practicing in. And they can get a kind of, you know, their visas sorted out. And it can be very beneficial for both parties. I think that's a really, you know, if you're not outsourcing at the moment, that's definitely something that you should be looking at. And we see these digital micro practices, getting very good at being able to do that. Even if you're doing it domestically in the same country. It can be very, very useful. Certainly, with things like 3d rendering, that's a no brainer, people are already usually doing that kind of service. But for other parts of the design process, I think it can be very, very useful. We've had people say that, Oh, you can't do project management, or you can't do site work with people who are in different countries. See how far you can push it. We've got one client at the moment, Business of Architecture, who is operating in Florida. And then they've got another team people who were doing a lot of contract administration work and they're doing it from the other side of the country. Now I use that as, as an example. This person who's out there in California, understands what's going on in in on the East Coast and has been involved in those kinds of projects in the past. But I thought it was very impressive to actually see somebody operating remotely on the other side of the country, doing work like contract administration. So the technology is evolving. The potential is there. We also see these digital micro practices set themselves up in a way where they can be a more of a light touch service. And I think this is a really underrated way of structuring your business. So many businesses end up losing money in some sort of in one of the stages of work that they're not that good at. And I know architects we've always got this idea of can have a continuous golden thread that goes through a project. But it doesn't mean that with Hata maintain that thread all the way through a project doesn't always mean that we have to be doing a full architectural service, we've seen businesses that have focused purely on construction documentation or CA works. For example, we've seen businesses that have focused purely on concept work feasibility work, front end design stages, and then have become some form of design guardian. So they become the kind of protectors of the original concept and idea. And then let's say you're working with a developer, and they've got a much larger architectural team that they typically work with, then you become the Guardian that's protecting that idea. And then you liaise and collaborate with the larger architectural team, this can be a really powerful business model, I've done this myself as well, where I just focused on front end stages of work, this stuff is also a lot easier for you to outsource, and to take advantage of geo arbitrage and things like that. And you can get a really powerful, kind of very efficiently a very profitable business setup like this. And again, if you mark itself well, you know, working with clients who, you know, they a lot of a lot of clients are developers don't necessarily see the value as easily in the latter stages of a project, but they do recognize the value in further upfront on the front end stages. Fantastic, you can create a kind of consulting type of business or more advisory kind of design business, or one that's much more light touch in terms of how much work you're actually delivering. And the value is there. And you can get paid a lot more if you're doing it well and doing it efficient, and you're marketing yourself very efficiently. Number two, is the single sector practice, as we were saying, at the beginning of this podcast, it's very common for architects to try and be everything to everybody. And this causes a lot of problems because you end up getting been perceived as a generalist. When you're perceived as a generalist, it's very difficult for you to be able to create a large amount of value and a large amount of profit in your practice, because you're just simply perceived. As a generalist, you're simply perceived as a lower value.