So low pay is definitely as a result of low fees, low fees as a result of poor perceived value from the prospect. Poor perceived value from the prospect is a direct result of architects being crappy at selling and marketing. Hello, and welcome Ryan Willard here host of the Business of Architecture. And I've got a little episode that we're going to do today, where I'm going to be looking at a recent article that was published in the architects journal in the UK. And I'm gonna respond a little bit to some of my own thoughts. There was an interesting conversation that I ended up having on LinkedIn, and you know, one of those kinds of quasi argumentative, respectable professional conversations that you get into. And I thought there was a lot of interesting points raised indeed, you know, this is always a very highly contested subject, and everyone has got a lot of thoughts and opinions on it. I feel from our side at Business of Architecture, we're in quite a unique position where both myself and Enoch are, you know, we're trained architects, we've had a career in architecture, we've run our own architectural businesses, and we've unplugged ourselves from the architecture industry a little bit in the sense that we're not currently practicing as architects. And I do believe that that little bit of unplugging has given, I certainly feel like it gives me a different perspective and paradigm on the architectural industry. And of course, now we're, we're in a very privileged position of being able to assist, you know, at the moment, over 80 different clients around the world in the UK, in the US with raising their fees with becoming more profitable, with making more money in their practices. And we've studied and trained from sales trainers, to leadership trainers, to entrepreneurs, business people, marketing consultants, sales consultants, financial consultants, CPAs, you know, we've, we've spent the last decade really amassing this body of knowledge about how to run an architectural practice, and make it harm and make it work. And that's what we that's what I do. That's what I spend my entire every single working day is thinking about this, doing this and talking with clients and having them do things that they haven't done before, to make more money and to get more profitable, more fulfilling, better, higher quality projects. And this is my mission. I'm very, very passionate about this. And this is the that really excites me. So I like reading these kinds of articles. The article was in the AJ it's called When will architects learn to value themselves properly. It's by a guy called Tim Callahan, who is one of the founding directors of a London based architecture firm called Nim Tim architects they do really beautiful work in the London area, lots of kinds of design worthy photographs that they get of their beautiful extension projects to things in houses, terraced houses in London and they do a lot of kind of very thoughtful social work and community projects. And you can just have a little look on their website just to get a sense of how vibrant and colorful they are as a practice very big practice. But I just gauging from the photograph feels like there's about 12 people there. Have
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is talking about Tim's kind of laying out a question like Why have salaries and fees stagnated? And while other professions, whilst the professional responsibilities have actually increased, so if we kind of start to lay out some of the problems here that he goes through, he talks about a particular story at the beginning of last year where they were hiring for a part one, they put the salary out of 26,000 pounds, which was a living wage in London, but they got pushback about it. And I you know, first of all, I commend them for putting the number out there because there's a lot of practices, you're not putting the numbers out there. And I think this is a really important thing to be doing is actually being transparent of how much you know how much you're going to be paying somebody this is part of the marketing for the job role in the first place. And so, you know, commend and acknowledge them for for doing that. However, it came to had bite them in. And they were kind of, you know, there was a lot of pushback on practices other other architects can, you know, tell him this is, you know, this is unethical. This is not a living wage in London, and you're probably right. I mean, they're 27,000 pounds as a part one is, it's not a lot of money when you consider, you know, probably rent is gonna be a small room and he puts a small room in a shared house and his own two starts at 750 quid, that's half of your money gone already, you know, and we see recommendations for how much you should be spending on rent from your monthly wage. And it's between 10 and 25%. And it's just undiscussed almost impossible on a salary of 26,000. So they got nipped in the bud for that. And you know, they've done a good amount of work to, you know, I think they raise the raise the salary there, but it did start to prompt this conversation of like, well, let's just look at the architecture fees and how pathetic they are. I've said this many, many times, we look at the Riba Fee Scales, we look at the salary guides, and they are woefully pitifully low, we consider the enormous investment that you put into becoming an architect, you know, seven to 10 years at max, you're going to have a load of debt anywhere between 10,000 to 50,000 pounds or, or more. If you're studying in London, good luck. And then you're coming out on a salary, which is barely livable in the major metropolis in the city. Now, he goes on and compares this to other professions. And, you know, I mean, I was always amazed my brother worked, works in finance. And when I was a young architects, I remember telling him, my, at the time, this is about 1415 years ago, I was on 28,000 pounds as a as a relatively newly qualified architect. I told my brother this, and he was like, wow, we at UBS bank, he was working out, he was like, we pay our graduates about 45k. And they've just come fresh out of university. And I remember just feeling robbed, absolutely robbed, and thinking, Whoa, first of all, how did I not consider this as a reality of the of the architectural profession, I don't think I would have been that fussed about the poor pay. If I absolutely adored being an architect, and loved it. In the end, being in an office and I went to some great practices, don't get me wrong, I really did enjoy my time there. But it, it wasn't what I'd been sold. And I, you know, I feel like a lot of university students kind of go through this very long, unnecessary, protracted process of becoming an architect to the natural reality of being an architect is something quite quite different. And there's all sorts of issues with the way that the current education system is, is set up. And it's really, you know, we like to compare ourselves to these other professions. I come from a family of accountants, and I've often sat there with my parents and tried to explain to them how wildly different the world of education is in academic architecture, compared to practice. And they'll often kind of have rebuttals and be like, well, you know, it's the same. My mother was used to teach accountancy at kind of at colleges. And she'd always say, Well, you know, it's always very different that what you teach in university, or what you teach in a college course, to what actually is happening in real life. That is true. And the truth, the same would be true for medicine and for law, I'm sure. However, what happens in architectural education is unrecognizable, to what you would do in practice. Okay, it's nearly unrecognizable. I look at my own kind of architectural career. Again, I thoroughly enjoyed my architectural education. And I appreciate the benefits and the virtues of it. And there's another conversation here about the power of architectural thinking, and kind of the way that you can analyze and look at problems and synthesize and be creative and all this kind of stuff. I'm just not entirely convinced that this long, protracted indulgent education is that well suited for being a practicing architect. Hence the kind of big the big kind of cliff that you fall off when you come out of university go into practice getting paid, not a lot of money, and you've got very little practical real life skills in to be used in architecture office. Now. We're gonna talk about salaries here. And the training that you get from university. Okay, is part and parcel why your fee is so low, or why your salary is low as a young architect because you don't know anything about practice. So you're not that valuable to an architecture firm. On a side note here, you might I find that your architectural skills, your CGI skills, your creative synthesizing skills, they might very well be better renumerated. In another industry, if you go look at someone like Arca out of architecture, with Jake and Aaron, they're kind of consulting agency where they're taking architects out of architecture, and putting them into other industries, we're seeing incredible things where architects are very highly prized and valued in different industries, particularly in Tech Tech, just not tech as the kind of a major driver of capitalism at the moment, you're going to find, in many cases, a much better salary, using your architectural skills, it's not a structured path, which is why it's more difficult, and there's more risk involved in it. And you need to be a little bit courageous with your career choices to go off and do that. But I think that's very, that's fascinating. And as there's a there's a lot of value there. And in, in the architecture, education, however, when it comes to actually being a part one student, and in an architecture practice,
a business owner struggles with the part one because they've got to train them so heavily. So my advice to a lot of smaller practices is don't hire part ones, just don't do it. Because you're on the surface of it, yes, you can pay them a small amount of money, but you're gonna have to spend a year, maybe two years training them, get them to be able to do the things that you want to do. There's a big mindset shift of kind of being an individualist when you're architecture school and the projects being about you and your kind of creative impetus that you want to follow through to then working in a team and having professional standards and regulations and code and then kind of construction details, which tends to be you know, a lot of that gets missed out at universities that people don't come into practice, actually, you know, a young architect doesn't really know that much about how buildings are put together, in many cases, you know, and the university academics are very happy to say, well, you just picked up on the job. Our, our job is to change the way that you think, Okay, fair enough. And then there's, there's a lot of validity in that as well. It's just what do students realize this, the students know this. So you know, part of the low salary of the architect particularly at these early stages is because it's it's economically valued, lowly. Okay, it's economically lowly valued lowly. Now, your, your, as a young architect, you know, there's a big impetus on yourself to uplevel your skills and do whatever training you need to do. You know, the whole working from home thing I think, at the moment for for younger architects is just a massively bad idea. I can't stress enough how much career development you will miss out by working in your bedroom. For the kind of, you know, for the short term, for short term preference and comfort, I would be very, very wary of that. We see it, you know, I've rarely met many architecture practices. I'm not saying you can't do it, and, you know, Business of Architecture, we're a fully remote operation. And I know the the difficulties with running a remote operation, it's not for everybody. And a lot of practices that have traditionally been in the studio based and now have moved into remote working and are kind of compromising with their team members, I've seen a definite dip in productivity. And it's very difficult to be an architect in a bedroom, and lead and manage people and to be able to negotiate and to be able to do all these things. So we've got to be very, very careful here as a young architect, like to protect your career trajectory. And also, you know, just recognize the reality of the skills that are needed in a practice, you're often going to be missing them as a part one student, hence, your salary reflects that, that may or may not be controversial. Now that they go back to this article of Tim's he's kind of comparing the pay disparity to other professions and also the kind of modern architect is having evermore liability and responsibility. And yet our fees are stagnating. I am a little bit weary of architects continually comparing ourselves to other professions. There's some major differences with say medicine and law, just in the way that they're positioned. You know, the architect is not viewed as an immediate need, right? So law and certainly medicine, we can see it much more distinctly in medicine, where a doctor is a you know, it's a need, it's a need. Now you go to a doctor you are you're literally in physical pain, or you're sick and you need to be cured. Okay, so there is a there's a pain in the world of marketing and sales. This is what we're interested in, in getting at okay, so sophisticated good sales. person understands the pains and the current problems that their client is in now. Okay, so professionalized medicine, okay, people are coming to you, your patients are coming to you, they are in physical pain, okay? And the often the kind of way that we talk about salesmanship and how to sell is not dissimilar to the diagnostic process that a doctor will go through with a patient. Okay, but the difference here is that we're in, in medicine, with surgery, with all these kinds of jobs, there's a strong pain, okay, it's a, it's perceived as a need right now, law is also very similar in this sense, where the kind of, you know, it's, it doesn't bear thinking about, you know, particularly in that say, corporate law, okay, the amount of money that can be lost by not hiring a lawyer or you recognize the value that a lawyer can do, or you go to a lawyer, because you've got a real problem on your hands right now, okay, you're being sued, or, you know, there's a contract that you need to negotiate, that's absolutely critical, or you're gonna lose a whole load of money, there's often a sense of urgency. So both of these professionals have a kind of inbuilt sense of urgency, and pain. And I think that's really important just to make that as a distinction, where because architects, we don't have public perception, isn't that, okay, so that as that's our responsibility as salespeople to bring a bit of urgency, and a bit of pain, okay, and when we're able to when we're getting quite skilled at being able to do that, okay, and we've got to understand what the client's pain is not our pains. Okay. This is a kind of deeper conversation about communicating value. Going back to this article, Tim kind of points out here, the low pay how miserable it is for people. He does kind of point towards some of the campaign groups such as future architect front and the section architecture workers, some of these unions that are happening here in the UK, how they've ushered a new conversation around pay and the kind of exploitation that often happens in successful or perceived architecturally successful practices. And I think that's quite an interesting. Personally, I think there's a definite place in the profession for unions, and they're not necessarily they're not a bad thing. But I don't believe that they are going to be the massive change the profession needs, because at the end of the day, and Tim kind of points to this, in his article, what underpins low pay is ultimately low fees. Okay. Now, there's a union will work in terms of it will, you know, it will start to force architects and architectural practices to be paying people a higher level of wage, the problem of that is going to be there's simply going to be 100 practices that simply can't, and then they're going to they're going to cease to remain, basically, which again, was not necessarily a bad thing, the kind of pressure that that that the unions put on the on a practice is good, but, but the solution to higher fees is salesmanship. Okay? So low pay is definitely as a result of low fees, low fees, as a result of poor perceived value from the prospect. Poor perceived value from the prospect is a direct result of architects being crap at selling and marketing. Okay, now, it was interesting, because there was a little, little Tete a Tete on the comments page that I got involved in here. I thoroughly enjoyed it. And I appreciate and thank everybody's kind of contributions and the conversations I had here, there's a lot of people who really want a top down solution. Okay, again, there's a place for top down solution. So there was one architect here, who was talking about how the UK must prevent those with without the relevant qualifications from designing buildings. Okay. And this is not a bad this is not a bad thing. I'm, I'm fully for having more protection of function for the architect. I'm just not entirely convinced that it's going to solve all of the problems that we want in terms of having higher fees, winning work, because at the end of the day, we're still businesses, and we're still operating in a capitalistic system, where we need to be able to be fully tooled up and conversant in negotiations, in sales, in positioning, being able to identify what the client's real pain points are, what their problems are, where they're struggling, help them quantify the value of the problems that they're experiencing. And that's quite a sophisticated and refined conversation that I don't see happening very often in the architecture world. Okay, we often kind of dismissed sales and you You know, if you're there as being something that's someone's got the gift of the gab or they're naturally charismatic, or in the architecture industry, we're very lazy with our selling, we just kind of rely heavily on portfolios. And we do the dog and pony show. And then we're very lazy with our proposals, where it's a kind of hope and quote, and when I say lazy, what I mean by lazy is that it's, you know, it's, it's email negotiation, it's sending out a price, there's not much thought about the psychology of how your fee is being presented to somebody, oh, and then guess what happens? When you lose out to somebody, you've put together a poorly thought out proposal, you haven't negotiated, you haven't determined what the pain points are of the client, you're not doing any of this face to face, okay? You send out a proposal with your fee on it, clients kind of forgotten about the experience, maybe you might have had an emotional connection that might stand you in a bit of good ground. Okay, but then lo and behold, guess what happens, somebody else comes in, a client can't tell the difference between your proposal and a proposal from another organization, which is offering quite a different service, and they go with the other person. Okay, so that's an experience that architects are having, okay, that's something that we need to train ourselves for, and prepare for. And in the world of marketing and sales, that's what marketing sales is about, learning how to negotiate learning how to walk the client through things, learning how to educate the client with an ecosystem of marketing, collateral, and thought leadership, being able to present certain things as offers all of this, again, it's not a it's not a quick, easy fix. And there's no shortage of consultants right now, at the moment, you know, business architecture are one of them, where we're where we're spending a lot of time with practices, helping them develop the right marketing collateral and the right sales systems, the right prospecting systems, an intelligent, thoughtful strategy for going after work, how to start those kinds of conversations, and not just being reactive with our sales and marketing, or, or even just reactive to the kind of RF peas that come our way or competition entries. All of this just puts us in, when we're reactive like that, that just puts us in a very weak position to be able to negotiate higher fees and to be able to
win work against other unqualified I think that was one of the big complaints here in the in the comment sections was that we're losing out a lot of work to under qualified architects, or architectural technologists or people who just aren't even qualified in any kind of architecture whatsoever. I think that was one of the real complaints. So the kind of argument there was the top down, need for more regulation, to ensure that all, you know, every sort of building project must have an architect involved. I'm, again, that would be lovely. I mean, we work with loads of practices in countries where there is that kind of regulation in in place, and they still, the industry still struggles with low fees and competition and all sorts of other financial problems. You know, I like I like this article that Tim wrote in, it's definitely, you know, he kind of ends it with this rallying cry, if you like that, we need to start recognizing the value that we bring and setting our fees accordingly. And, absolutely, we need to do that. I don't think though architects don't realize their value. It's just that the business skills, the marketing, the selling, the negotiation skills have been totally ignored. Or worse, if you think, you know, we think we are good salespeople. And that that's really the engine here of being able to set higher fees. So I thought I'd just kind of give a few ideas as well of how we can start to recognize our value and how we can start to set our fees accordingly. And again, at Business of Architecture, we do a year long program called the Smart practice method, where we go in very deep into all of these topics. So in the space of this podcast, I'm only going to scratch the surface really, on the sorts of strategies that are that are needed. But let's have a look. So the first thing I would advise to raising your fees is simply to start raising your fees to start raising them. Okay, that scares the living bejesus out of a lot of people. Okay, we're going to talk about being accurate with your fees and understanding the financial metrics and optics that you need to have in your business so that you can set your fees accurately and you can understand what's going into them and you can predict them you know, if you're not doing timekeeping and that kind of stuff, time tracking and doing it accurately and having team members distinguish between direct labor and indirect labor mean just going to be Hard life is going to be hard. Okay, but the first thing that we can all do is simply stop just by raising your fees. And we want to be raising our fees in line with inflation in each year, at least. Okay? Now, the pushback I will always hear from this is, you know, all our market can't sustain that it's going to be impossible. Great, okay, if you're charging what you're worth, you are going to get some friction. And we need to learn to be okay with losing a client because you're charging what you're worth. And when you're charging, what you're what you're worth, you're gonna get a little bit of friction involved in it. That's where becoming a good negotiator, a good salesperson, a good conversationalist, a good orator, being able to do these things face to face, this is where these skills massively massively come into play. In a lot of businesses outside of architecture, the business development or the salesperson is often the person whose salary can be asymmetrically rewarded to their output. Okay, because they're so valuable, a really good salesperson is absolutely essential to any business, when you look at a lot of great CEOs. A lot of really good CEOs, they've, they've cut their teeth, if you like being having some kind of sales experience, okay, so the selling is super, super important in running a business and capitalism can't undermine it. can't underestimate it. And as an architect, I hate to tell it to you, but you are selling all the time. Okay, literally the first common communication you have with that client, right until you hand over the keys or they walk into the building, you are selling them on something all the way through. So it makes a lot of sense to become masterful in this in the skill sets of, of selling. The problem of selling is that most of us have experienced terrible salespeople in every walk of life from buying a car to buying a computer to going into a retail store. And we're tarnished with the with these kinds of horrific experiences and being taken advantage of and, you know, the vast majority of salespeople are not salespeople, in my opinion, they've just fallen into that kind of line of work and are trying to talk you into something. And a sophisticated salesperson is in, in part an educator that is in part therapy, in part performance. And you're an amazing listener, and you're an advisor, okay, and you're able to understand very deeply what is happening at the root of a client's problem. Okay, so there's a wonderful book called never split the difference by a guy called Chris Voss, who was a FBI negotiator. If, if I recommend one sales book to get people started on read that, because it really goes into the beautiful, linguistic conversational tactics that the FBI had developed in negotiating with terrorists and you know, kind of life and death situations with people who are armed robbers and things like that. And they had to develop a system that worked. Otherwise, people would lose their lives. And Chris Foster's was one of the head negotiators in the FBI. And he kind of outlines the strategic processes that that they use their for talking to these kinds of high pressure criminals, situations, and the underlying psychology of it is really well, we need to be mastering in architecture firms. Otherwise, we're going to we're going to struggle. So first thing is simply start by raising raising your fees. We want to get into the practice and getting and just get used to raising our fees annually, the IRB has got no problem of raising their fees on you. Lawyers don't have any problem raising their fees. There's no reason why architects shouldn't be collectively raising our fees, okay? And yes, if you're going to be losing projects, to people who are undercutting you, you've got to start taking some responsibility for that. You've got to start taking responsibility for the fact that your sales process and your business marketing and operations haven't aren't good enough. They're not good enough to communicate the value that you're offering. You don't understand the pain points of the of the client well enough, okay. Or you're just in the wrong market. Why? You know, sometimes I speak to a lot of architects and we kind of do an analysis and audit of the sorts of projects that they're going after, and we're just like, why are you? Why are you dicking around and after these crappy jobs. Why are you fighting here? Like, why? That's just a hard life. It's a hard life. Okay. So part of it is positioning. Part of it is sales, sales skills. There's going to be you know, there are certain types of clients that you're not going to be able to charge a massive fee for, for doing their for doing their rear extension. All right. So you've got to start being strategic with the kinds of people that you want to be getting in front of and and get very clear on who it is, that would be your target market where they've got a lot of money. And they can they can do work that's fulfilling for you, and start getting very clear on what a tear a project looks like in your business. So that'll be number two would be get very clear with what a tear a project looks like, okay, what are the attributes? Who is it that you're after that you're going that you're going after? Okay, so number one was simply practice, start raising your fees, be prepared
to get some pushback, realize, understand that the next part of, of developing and raising your fees is going to be in marketing skills, communication skills, understanding the client's perception of value, and their pain points. Once we can have grown up mature conversations around that, great, now we're starting to get into a position where we can raise our fees. The next thing I would say, as well with raising fees is just learn to negotiate face to face, I recommended that book just now, very useful. It's talking about kind of conversational tactics that you can use. And I think one of the biggest problems that I see with architects is that they're negotiating via email, they're just sending out a proposal, there's no psychology based in the proposal. Again, there's loads of consultants out there, I'm going to highly recommend blue turtle, if you want to learn how to really up level your proposal writing and kind of, you know, deeply embedded with a lot of psychology. You know, if you do that, and you've got kind of really solid proposals, where you're waiting, perhaps you're using a kind of a tiered pricing system, and you're negotiating face to face. Fantastic, fantastic, but the negotiating face to face is really, really important. And it's one of these things that again, you really need to see it to believe it as well. I've been very blessed to be able to kind of work with some incredible sales trainers and incredible negotiators and, and be involved in those negotiations with them. And when you see someone doing it, at that kind of masterful level, it's beautiful to watch. And it's not the kind of second hand salesperson or a dog and pony show. It's more like a therapeutic, emotional conversation where, where real honesty is happening between two people, and you're getting really real about it. And you're laying out a very clear conversational structure from the beginning. And you're leading the conversation, you know, where you're going, you've got you've got ideas, you've rehearsed, you've practiced different objections, you're masterful in being able to ask questions. I think if there's one thing, one kind of defining factor of being a good negotiator face to face, is you got to be good with asking questions, you got to be good at being able to turn a question that's orientated to you back into a question for the for the client for the prospect. Okay, that's a technique that we call reversing. So that's really important is learning to negotiate face to face, if you're not negotiating face to face, and you're not skilled in in that, then we've got a problem. The next in idea, if you'd like to raising our fees is that well, our fees need to be based on the value that we're providing to the client. Okay, and this conversation of communicating value, normally what I see architects say, we need to learn how to communicate our value better. What that means is that we go off on to these long rants about, you know, how important it is to have an architect. In these situations, how to, you know, we talk about sustainability, we talk about the wider context of buildings quality, that's all great. It's just not the immediate pain of most of our clients. So this is where the asking questions is super, super important, and why in many cases, like a diagnostic service. So the really sophisticated architects they go out and they've got diagnostic services that proactive with their with the client base, they researching trends, you listen to the hundreds of interviews have gotten Business of Architecture, where, you know, you've hear again, and again and again, these these architects who have got, you know, massively profitable businesses, they are up, they're proactive with their business development. They're going to, you know, if they work with developers, they go to seminars of developers, they understand the developer industry, they understand the language that they speak, they understand the pain points, they understand the current trends that are emerging, they go deep into understanding the field of their desired client, and they learn what the what what's value perceived to them. The sales conversation then becomes is a kind of series of questions where they are helping the prospect discover for themselves afresh these kinds of pains, and they're able to articulate them very, very well. Right. So, again, I'm just a little example of this, you know, for a developer, one of the pain points I've seen one of our clients do this very, very well. A common pain point for developer is the timing of finance that they're getting from their investors, they often don't have that much money for the soft costs upfront in a project. Hence, you know, this is why architects get themselves into problems with doing for free work, and but the architect only kind of half negotiates there, because they're doing free work with the hope of just winning the project. You know, that's not really very good negotiating. We had a client recently, who would negotiate, they understood that the front end part of financing for the developer client was was quite painful. They went into a long conversation about how many kind of planning delays it costs them, cost the developer a lot of money, and they were very skilled in being able to get the developer to share these kinds of these problems. Okay, again, the skilled negotiator is someone who is able to have the other person share these intimate problems and go deep into it. Okay, again, this is all part and parcel those conversational skills, which you can, you can learn and you can you can train, our client was very good at kind of pulling out these pain points understood that there was problems with the front end, finance, negotiated a deal where I was like, Okay, well, you pay me a base level.
And then you can pay me on the approvals when we get approvals. And actually, what we'll do is for every unit that I get approved on to the site, why don't we do a little bonus structure, okay, now, if you're running a good business that's got good cash flow, that solid, you can start to be more creative with these kinds of deals and take more risks in the way that you're negotiating. And they negotiated a number of kind of bonuses per unit that gets on the site, and hey, presto, same amount of work. And they're collecting, you know, somewhere between two and a half, three times the amount of money that they would have done if they just charged for it in a in a regular way. Okay, so just understanding and we listened to the podcast with Joe Cowen years ago. You know, that's what she was so sophisticated and so brilliant at doing, she understood the pains of her client, and she adapted her fees and her offer specifically to help the client solve those kinds of problems, where lots of other architects weren't, were oblivious to it. Okay, so just a bit of financial literacy here. This is, again, the kind of business skills, the financial skills, you know, the more kind of competent you become in talking about business, the more you have at your disposal to be able to negotiate with the kind of better insight that you have in being able to pinpoint and go deep with a kind of clients set of pains and problems. The other thing I would, I would kind of say, as well is to get a handle on your multipliers. Okay, so this is now a kind of bit of Accounting and Financial Literacy that's really needed with architects, so many architects are just kind of licking their fingers, putting it in the air and pulling out a number of what their fees are. If you're not doing time tracking, and not doing it regularly and not doing it accurately. That's the first thing. Just Just get it set up. Okay, just tomorrow, immediately, as soon as you get off listening to this podcast, go and get time tracking tools. If you've got that already set up and people haven't aren't doing it, then you just got to however you do it, whether you do with incentives, or you do it with with punitive measures, you've got to get everyone in the team. And that includes you doing accurate and and up to date timekeeping, because that's golden. Okay, because that starts to give you a lot of data and a lot of information about the past performance on projects, how much hours were actually being used, which is going to help you put together realistic fee proposals. Now a good negotiator, when you put together your fee proposals will negotiate in space to renegotiate your fees. All right. Now, that's something that kind of sounds a lot of, for those of you who are who are skilled negotiators, that's almost kind of very obvious. For people who are not skilled negotiators and like to hide behind an email just punt out a proposal and just hope for the best and never want to talk about it again. This is something to really kind of think about, okay, because if you negotiate at the beginning periods to renegotiate the project, fantastic. Okay, now you're kind of starting to communicate with the with the client that this is a moving target. It's not a product as much as they wish it was a product. It's not A product is a complex, it's a complex service that's moving around. And part of your negotiations needs to accommodate that. And to put in mechanisms that are very clearly laid out on how you're going to deal with scope, creep, or renegotiate fees, okay? Again, a business architecture will spend about three months going into a whole load of different strategies and training people in how to actually do that. But first up, know your multipliers. So know what your hourly billing rate for each individual employee. Okay, so that means each hour that you're billing out a team member, there's 30% profit, or at least 20% profit that's already baked into that hour. Okay, now, there's lots of kind of hourly billing calculators that are there available, we've got some Business of Architecture, this stuff is absolutely critical for you to know what the hourly billing rate for each of your employees needs to be where you've baked in at least 20%. Okay, and if you've got that, then that becomes the basic building block of working out your fees, then you can use something like a project fee budget calculator. So everybody should have some kind of spreadsheet. If you look at Steve winter PTP system. There's some kind of real good industry standard project fee calculators that are out there available. Again, we have them here at Business of Architecture. But having those kinds of tools where you've got an hourly billing calculator, you understand what your breakeven multiplier is, you understand what your overhead multiplier is, and your your profit multipliers, and then your net profit multiplier. Again, I'm not gonna go into what those terms are here, Google them, when you get off this, this podcast, kind of familiarize yourself with what those numbers mean, essentially, they're, they're factors by which you're going to multiply what you're paying someone to do the work that their client then pays you to pays you so that you can cover your costs, and you can make your profit, right. So there's, it's not complicated. It's not complicated mathematically. But we do need to be aware of it. And we do need to be building up our fees with some kind of logic. And we need to be able to negotiate some flexibility into your fees. So if you're a practice that's charging on a percentage of construction, I quite like this actually, as a way of billing of billing your clients is charging on a percentage of construction, but you've got to be shit hot at negotiating and explaining and educating the client all the way through about what the formula is that you're using to work out your fees. And you've got to eliminate the element of surprise, okay, you've got to eliminate surprise with all of this stuff with your with your client. So again, your upfront negotiations are so so key, getting the mechanics, right, knowing your multipliers, knowing your financial literacy, having good data to make sure that it's accurate. Good, we're starting to get into some good shape here. And again, I'm just gonna reiterate the point the sales conversation. So much happens in that sales conversation. And normally, it's it's just left out for most architects, hence why the rest of the project is so flipping difficult. Okay, you can solve and prevent so many problems with good solid negotiations. Okay, you can start every single project off with an expectations review, or an expectations meeting, where you sit down at the very least sit down with the client and just go point out elements of the contract that they've just agreed to, that are really, really important for them to understand. Don't be afraid to repeat this information again. And again, and again. We can automate this repetition with videos and explainers and things like that, but nothing works as well as actually sitting down with somebody face to face. Having them explain you explain them, give them an opportunity for them to ask questions. And for them to acknowledge and accept what it is that their responsibilities are a conversation like that, at the beginning of a project can save an architecture practice 1000s and 1000s of pounds, okay. And it's all part and parcel of being a responsible, sophisticated, refined negotiator, salesperson, and marked here. That's all for now. Go and check out that article by Tim Callahan in the AJ and I look forward to talking to you guys very shortly. And
that's a wrap. Oh, yeah, one more thing. If you haven't already, head on over to iTunes and leave a review. We'd love to read your name out here on the show. Have you ever been frustrated with our contextual photographers who aren't reliable or don't capture your projects the way that you'd hoped? Visit taupe and davies.com or buhay photos.com to book renowned architectural photographer Tobin Davies to photograph your next project. Tobin Davies travels to your location and specializes in architectural photography for modern design focused architecture. Again, visit Tobin davies.com or be away photos.com To get more information or book your shoot today and tell him you heard about him here on the podcast for a complimentary package upgrade. The views expressed on the show by my guests do not represent those of the hosts and I make no representation, promise guarantee, pledge, warranty, contract, bond or commitment except to help you conquer the world. Carpe Diem.
