Learning about business learning about leadership, learning about management, taking it on and taking on responsibility for your performance and for your business, I think is the most powerful thing that we can do. Hello, and welcome to the Business of Architecture. I'm your host, Ryan Willard, and today, I've got basically I'm gonna have another one of Ryan's rants, I think around look at one of these opinion pieces that I found on the architects journal. This one written by David Greene, it's actually a very good article, called architects firms are in financial danger. Where is the Riba? This podcast is produced by Business of Architecture, a leading business consultancy for architects and design professionals. This episode is sponsored by Smart practice, business of architectures flagship program to help you structure your firm for freedom, fulfillment, and financial profit. If you want access for our free training on how to do this, please visit smart practice method.com. Or if you want to speak directly to one of our advisors about how he might be able to help you please follow the link in the information. He starts off by articulating very well, the current problems facing the architecture profession, I'm going to echo that this is not just in the UK, but this is applicable for basically the entire global architecture. industry. I think in the UK, we do suffer from some, you know, some there are some things which are a little bit different in the UK, like we don't have any kind of protection of function whatsoever. In the US there is not protection of functions so much, but there is certainly you do need for certain types of buildings to have them stamped by an architect, okay, so when the building is of a certain size and a certain typology, then architects do need to be involved. But I would say that the if you look at the economics of architects salaries in different countries, you know, a lot of it is governed by the kind of GDP, the economic power of that country. But the US or the UK is, you know, we're not without loads and loads of problems here. So let's have a look. So if the if the RBA is there to service members, and urgently needs to address the financial health of the profession, argues David Greene, who is a practice leader, I believe it's of Belsize architects. And he's very knowledgeable. He was a former regulator and standard setter for professional services, and providers at the FRC and the FA FSA, and the Bank of England. So someone who knows what they're what they're talking about. And he goes in to really outline in, you know, the past history of what guilds and you know, trade guilds used to do, how they would protect the quality and standards of that kind of profession. And they would also be there to, you know, ensure the financial viability of some of these businesses. Sometimes historically, this might be through restricting entry to the profession or even setting prices. Now, this is something that the RBA does not do, and has not been involved in doing this for a long time in the US. We had the situation where the AIA was actually sued, I believe it was by the Department of Justice for basically being a kind of monopoly. That was kind of price fixing, if you like, and this has meant that and certainly the AIA, they just backed away from doing any kind of, you know, fee rates, fee tables, or that kind of stuff. And in the UK, we see that the RBA really doesn't do a lot when it comes to the setting of fees. Now, this article was is kind of, you know, again, outlining lots of issues with the architecture profession and how poor financial performances we can go and look at the RBA benchmarking numbers just to get a grasp of that we know it's diabolical. There's criticism here that the RBA does a lot promote its own Awards, which is a kind of indirect way of promoting other architectural firms if you like but he asked a very good question. Well, that's great for the firms that get nominated for these awards. What about those practices that don't the RBA? Not so long ago, I seem to recall did do a kind of advertising campaign for directed towards homeowners and the benefits of what architects can do. You know, I would argue here that work kind of looking in the wrong place. And the RBA actually does quite a lot. And I'm, you know, this is interesting. I'm not even an RBA member. And I think I was an RBA member for two weeks when I first got qualified as an architect. And at the time, the practice I was working at, for various reasons, it was just after 2008 2010, that, that sort of era, they weren't paying for certain people's registrations and chartered RBA things. So I withdrew it as a young architect and want to pay the money to be a member, and have never become a member since. Now, that's a very personal decision. And I've often, again, personally have invested my money into other things, such as learning about sales, learning about negotiation, learning about marketing, working with business consultants. And I've always felt that that was a far better use of my resources than being a member of the RFP. That is, for me, personally, I think the r&b does do a lot of wonderful things, one of the things that they do do is there is a lot of business education that they provide. And I think it gets a little bit lost. Because the RBA is doing so many different things, that people and its members don't always recognize or know the sorts of things that they're doing the guerrilla tactics, which I spoke at recently, I thought was a very good orchestrated event, giving some more practices a deep dive into different ways of making practices more profitable. However, I really don't think that the that we need to be or we should be looking towards the Riba to be saving us. As architects, I think this is on us. And you, as an architectural business owner have a responsibility to be making money and to be bringing in the profit, if the business is in financial danger, then there are some, we had to have a we have to have a serious hard look at what's happening. And how we've been functioning and performing. You know, this is just have a look at the why architects start businesses in the first place. Alright, so number one, that probably, you know, it's one of two things, either you've been let off, or you've been let go, or you've been fired. And then you need to bring some money in and you just decide, right, that's it, I'm going to go to start my own firm, fine. That's done. That's one way. Or it's the kind of entrepreneurial seizure to quote a, a term coined by Michael Gerber, I believe in the E Myth, where he talks about how specialists are working for somebody else. And they believe they could do it better. They're unhappy at their current position. So they had the great idea, I'm going to set up my own business. And that's very much what happens in architecture is that people have a vision, they think they could do it better. They're frustrated, how the current business that they're working at is being organized, I think I can do it better. I'm going to set up my own business. And then this causes an enormous amount of problems. So one of the issues that we actually see is that we have so many small businesses in the world of architecture. And I would say that actually running, running a practice and I've done this myself, so I can attest to the truth of it is that being a sole practitioner, is one of the hardest things that you can possibly imagine doing. I was interviewed on a podcast not too long ago by Christian geodyna, who is a CEO of a company called Manzini, Duffy, here in New York. And he were talking about, you know, what kind of advice would you give yourself, your younger self. And it was interesting, because the advice I would give to somebody about setting up a business or my observation, if you like, on setting up an architectural practice, how to do it the easiest, quickest way is actually number one. I'd like to hear this do a little bit later on in life. Okay, I know for me personally, I was just chomping at the bits and wanted freedom and all sorts of disappointment with what the industry was compared to what education was. But actually, if I was to advise somebody, getting some experience and leaving it later on in life, I would say probably in your early 40s is the ideal time to set up a business because you've got you know, so 20 years of mastering your craft as an architect. It just makes that easier. There isn't the kind of learning curve of your of learning how to deliver small residential projects, for example, which I went through,
you know, I was working on airports and competitions for museums and you distilleries and all these kinds of glamorous projects, and then suddenly was working on rare extensions. And it was very apparent of my lack of knowledge in construction, which all riff made it very, very difficult, let alone my lack of knowledge around around the sort of intricacies of running a business at that at that time. So, I think, you know, doing it by yourself as a sole practitioner is very difficult. I see practices when there's three people, or even two people, or three people, or four or more, who set up practice, and there are all kinds of partners, this can work really well, actually, because you, you share the load, you share the kind of pain of running a business, and everyone's kind of in it together. And everyone's willing to work in late nights, and they've all got that kind of drive. And it doesn't take much as well, for one person to kind of, you know, they've got the skills of winning work, and someone's got technical details and someone's got, you know, business knowledge and systems and numbers. Great. Now you've got team going have complementary skills. And we often often see those kinds of businesses, they can succeed very rapidly and very quickly, because they're sharing the pain. Okay, the sole practitioner, I believe, is very, it's a very difficult scenario to find yourself in, and I wouldn't recommend it. Okay. But there we go. There's, according to the survey of the RBA, there's over 1000 solo practitioners, I'm sure there's even more than that, though, there was 1000 that was surveyed. So there you go. There's definitely more more than that. Okay. Another way I've seen businesses set up that works really well as they start a little bit later on in life. And they have worked at a bigger practice, for example, like your Rogers or your Foster's, or Grimshaw, and hmm, or something. And they move out of that practice, and they take a couple of clients with them. Fantastic, because now you can, now you can work on kind of decent sized projects straight off the bat, you don't have to go straight into rear end extensions, and kind of claw your way up like that, which can be quite difficult. So taking projects like that, and then also pinching the team, and pinching the business systems from them, and everyone's already worked together. So it's almost like the larger practice has given birth to a smaller practice that can be very successful for the smaller practice. And a very quick way of, of doing it. So that's the one of the first things right is that is often that many architects practices that are in financial danger have started off on the wrong foot. And it's been a very defensive reactive, you know, chlorine out of being a sole practitioner, and then hiring younger team members who are inexperienced, who you have to train up, and then you spend ages training them up, and then they leave and then you're back into that cycle of now having to rehire. And again, this kind of cycle just kind of goes on and on and on and can be very difficult to get out of, okay. The RBA, mean, what what do we expect the RBA to be to do with that? Okay, there's like poor foundations from the very beginning. I could go on and rant about university and how university doesn't prepare us for running an architecture business and how actually fine I speak to lots of academics and they say, well, actually, maybe the purpose of architectural education isn't to prepare people for the profession, okay, fine, make that clear to the students who are coming in. And so that they, they know that they're not being prepared for profession. I do feel that the negation of talking about business at university is deeply harmful from a cultural aspect and ends up having us take on very unhealthy belief systems that can make it very difficult to learn about business and run a practice later on. But looking towards the RBA to save us, I think is a difficult scenario. If you're running a business and it's not working out, then we need to get radically honest with ourselves and get help. Okay, get some help. The RBA, again, they provide bits and bobs, but I would recommend working with a business consultant and to start learning about marketing, sales, negotiation, setting your fees, managing profit, bits of leadership, building a team and just Just totally immerse yourself in the world of business education.
Working with a business consultant that specializes with architects like we do at business, architecture, brilliant, I know loads of architects who have specialized with, who have worked with business consultants from different fields, brilliant, whoever it is, that kind of knowledge and expertise and mentorship and guidance, and you take in it on to learn about the different aspects of business, learn about the communication that's needed for negotiating fees, and how to position yourself powerfully into a new market. These are the things that really helped us elevate our, our business. I think I've said previously, that, you know, sometimes many architects will say, Well, what do we need to do to stand out, and I'll often respond with actually just learning a bit about business will make you stand out, becoming commercially aware, will make you stand out, or help you ask better questions of your clients, you know, when you going and talking to another client, and you genuinely understand their business agendas, their business problems, the sorts of things that they're struggling with, and you can articulate those pains and problems very well. Your value elevates, often when I will talk to an architect, and I'll say, you know, what are the pains and problems of the of the client and their say, Oh, well, they haven't been or they're struggling to get a good construction documentation set. No, they're not. That's not their problem. That's not what they're worried about late at night, their problems are going to be what the results are of the building. You know, perhaps their problem right now today is the fact that say that they're an organization is that they're losing revenue, because nobody is coming into to their retail park, for example, because it's been so poorly designed, or they've got, you know, developers have got projects that have spent months and months and months in planning approvals. And they haven't put the you know, they haven't put the right architect on the on the job or the right team. And their projects are getting delayed, they're losing money. Or you might have a homeowner whose current issue is that they're, their kids have just left home. And they're kind of got they've got too much space, and they're feeling pretty lonely, and they want to completely change the way that they're living. So these are more the pains of the clients of what they're experiencing right now. And getting really masterful in that. I think, again, this is one of these things that's going to help us elevate our financial performance in a business. I've thoroughly enjoyed speaking to architects who are savvy negotiators, or who are savvy marketers, and really position themselves as advocates or allies, to their clients. And what this means is that they become very committed to a particular industry, for example, and they do a lot of research about that industry. They attend trade events, they read the trade journals, they understand what sorts of problems that businesses facing, when it's times of economic downturn, they're not the kind of architects who suddenly worry about themselves and, you know, let go of the industry, they've been working with that to suddenly just sort of scramble off over somewhere else and just do take on loads of projects that aren't a fit for them. The smart ones, go deeper into their particular niches and start recognizing that their clients are going to be having economic problems, troubles, worries, concerns as well, and position themselves as what can we do to help? Okay, what are you actually dealing with right now? You know, for the for the future, I'm often reminded of the story of the practice in in Texas, who during COVID, there was specialists in hospitality, and during COVID, everything shut down. And they said that so many architects in the hospitality sector abandoned hospitality altogether, understandably, okay, they had to had to, you know, in many cases, lost business and I'm not that well run. So, you know, that industry disappears, you have to let go. You've got to make sure that your people are getting fed and that you can get some money into the business. These guys were very committed to hospitality and to hotels, recognize that these captains of industry of hospitality, we're gonna go into some deep strategic planning about, you know, what to do when inevitably COVID would end and they wanted to be allies, advocates, partners, and actually position themselves in a very strong position. When the COVID ended or when the travel restrictions started to come to an end, hospitality starts to open back up, and they had picked up all these new clients that had been abandoned by their other architectural teams. Slightly slight sniff of economic downturn. So going deep into our target market are industries that we're serving, becoming allies and advocates to our clients. These are the things that can make a big difference to ourselves financially. Okay, learning again, we said learning to negotiate, learning to sell, I did a podcast a little while back about the different stages, that you can take somebody through in a conversational framework as a sales structure, to increase the likelihood of you being able to close more consistently and more on a more regular basis. Learning how to market yourself how to create offers, how to use language effectively on your website, again, the more intimate knowledge that you have of your client base, all provides a much more detailed picture of how you can be doing this. So learning about business, learning about leadership, learning about management, taking it on and taking on responsibility, for your performance, and for your business, I think is the most powerful thing that we can do. In terms of kind of, you know, what we're what businesses are doing, if they're in financial danger, I think what's more scary, if you like, is lots of businesses who are in financial danger and who have just become used to it. Okay. This happens quite often, we'll see lots of business owners who are getting paid less than some of their senior staff, or they're getting paid less than some of their junior staff, even. This is not, this is surprisingly, not that uncommon. And they get used to it. Having no retirement fund in place, having no savings becomes very usual. Constantly being on this feast or famine cycle. And the architecture industry often go kind of justify it and be like, well, that's the profession. That's what it's like, it's always been like this, and it always will be like this. But now it's getting to a much more critical, critical stage where it's becoming unlivable. The tension and the pain is building up too much. And if that's the situation that you find yourself in, you need to you need to get her help. I also suggest and a lot of our clients that we work with, are already top performers. Now, isn't that interesting? Isn't that interesting? And I often think about it like this. So sometimes people think working with a coach or a consultant is something you only do when you're in trouble. And actually, I found that an our preference as well is to work with high performing businesses. You know, it's not really that fun, working with organizations that are, you know, sick, if there's mindset and leadership issues and all this kind of this kind of stuff, or who are really struggling, okay, there's a lot of work that's involved in that. And normally, they don't have the resources in the finest amount of pay for the consulting. But often, businesses that are already high performing, are looking for consultants, they're looking for coaches, kind of like a sports person. I remember hearing about Harry Kane, who striker England used to be spurs now by Bayern Munich. He had lots of different coaches for different aspects of his game, he had a nutritional coach, he had a cardio fitness coach, he had a striking coach, he had a passing coach, all these different types of coaches, had a mindset coach, okay, all these different coaches for different aspects of his game, to help him be the best that he could possibly be and maintain him there. So think of it like that as being a high performing elite sports person. You get interested in consulting and coaching and finding support and finding different ways to improve your business. So great article, David Green in the AJ thoroughly recommend he does articulate very well. The kind of issues that the industry is facing at the moment
it does talk a little bit about AI. And really what I would say to all of this and when we come To the question of fees, and raising our fees, then we're going to learn a little bit about our business, we got to learn about sales, positioning marketing. We cannot, there isn't enough time to wait for the RBA or the ARB or any other organization to come and save us. Okay, that's not going to happen. We need to take this ourselves, take responsibility, go and get help. Pull together with friends. It's totally possible. Resources like us the Business of Architecture, we are here we are the allies of the architecture industry. Thanks very much. And that's a wrap. And one more thing. If you haven't already, please do head on over to iTunes or Spotify. And leave us a review. We'd love to read your name out here on the show. And we'd love to get your feedback. And we'd love to hear what it is that you'd like to see more of and what you love about the show already. This episode is sponsored by Smart practice, business of architectures flagship program to help you structure your firm for freedom, fulfillment, and financial profit. If you want access for our free training on how to do this, please visit smart practice method.com Or if you want to speak directly to one of our advisors about how we might be able to help you please follow the link in the information. The views expressed on this show by my guests do not represent those of the host and I make no representation, promise guarantee, pledge warranty, contract, bond or commitment except to help you the unstoppable
