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1.  Funding Architecture Firm Startup

Posted 10 days ago
I teach professional practice at the Boston Architectural College.  Many students aspire to starting their own firm.  A student recently asked me if I could suggest sources who / which might fund a new architecture firm.  My experience has been that the principal(s) starting a firm self-fund.

I would appreciate any information or experience that anyone might share that I could pass on to my students.

Thank you.

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Donald Hunsicker AIA
Dean, School of Design Studies
Boston Architectural College
Boston MA
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2.  RE: Funding Architecture Firm Startup

Posted 8 days ago

My husband and I founded our firm 18 years ago; we are now 26 people in three states.  My advice to a student wanting to start a firm would be to find a successful firm, for this smaller might be better because you get more exposure much more quickly, then learn what they do well, why they are successful. Learn the things school does not teach you: codes, handicap, technical detailing, permitting processes, client interface, liability issues, insurance requirements, contracts. Decide what you want to do. Most people starting out cannot design and document houses to apartments, museums and hospitals. Decide what your focus will be and get the knowledge and skills you need. My husband and I met at a firm that happened to specialize in multi-family. We primarily learned a very specific product type and made numerous contacts within our area of expertise which has helped us to this day. This is important because we have always found word of mouth and our built projects are our best advertising. Starting a firm without any contacts, whatever one's area of focus would be difficult. 

We left the small firm and went to a very successful large national firm to discover what they did differently than a small firm. From them we learned to have more structure in the overall project process but also leaned that most fundamentally what they did differently was having a razor sharp focus on contracts and billing. At that time the firm had more accountants than licensed architects!

While there we decided to start our own firm. We took two years, added to existing savings  and in our free time  set up an LLC, worked on a logo, marketing material and a website so that when we decided to leave we would be ready to hit the ground running. In our specific case we were going after projects that started with budgets around $15 million so we knew we had to have an office and at least one employee since who would trust a project of that size to two people working out of their home?

Ultimately we had three sources of funding: savings, a loan from parents and an SBA loan. We had a good chunk of saving and hoped that would be enough but paying overhead and a salary burned through our savings quickly. We could not find a bank that would finance our venture though one recommended the SBA to us. We applied for and received a $50k loan from them which was a godsend. My memory is that they required a business plan, which we had not put together for ourselves and fortunately this requirement forced us to take the time to do this. This loan carried us until we landed our first big project; however, in multifamily payments can come slowly and we took a loan out from my parents to bridge the gap from having a great project to work on and actually getting paid for the work. 

It takes a certain personality to start a firm and weather the many ups and downs. I remember at one point being nearly unable to sleep, each night calculating if we failed how long on a regular salary it would take to repay our debt. My husband finally sat me down and told me failure was not an option so I needed to focus my mental energy on what we needed to do to succeed rather than exit strategies. He was right but the first few years are scary, especially when both spouses are connected to the same start up.

From my experience I would advise students who are serious about owning a successful firm need to be strategic and understand it is a bit of a long game. Most people cannot leave school and go directly into private practice, all issues of licensing aside (which I realize is a huge aside!) even if they just want to do houses and additions. That being said for all the stress, fear, long hours and work it has been, starting our own firm was the best professional decision I have ever made!



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Nea Poole
Principal
Poole & Poole Architecture, LLC
Midlothian VA
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3.  RE: Funding Architecture Firm Startup

Posted 5 days ago
Please accept my thanks to you, all, for taking the time to respond to my question.  I will respond to each of you individually.  But since a number of you have made the point about students not being ready to start a firm, I wanted to respond generally about that.  The students' interest in this should not be taken to suggest they think they are ready to start a firm.

Nevertheless, at the BAC, we have what we call a 'concurrent model' of education which requires students to work and study simultaneously.  To graduate from both our B Arch and M Arch program, students are required to have the minimum number of work hours required for NCARB AXP..  Many of our graduates though have several years of experience, some as many as ten plus years - which is not to say that they are ready to start their own firms.

We also have a low-residency / online-distance M Arch program.  Many of the students in this program have reasonably senior level positions in firms but are not licensed because they do not have NAAB accredited professional degrees.  Completing our M Arch online-distance track degree will allow them to sit for the ARE.

We are also participating in the NCARB IPAL (Integrated Path to Architectural Licensure) pilot program, which provides students the opportunity to complete requirements for licensure while earning their degree.

Regardless though of the level of professional experience they have, providing students with appropriate information about the business of architecture while they are in school alerts them to the realities of the profession.  So your thoughtful comments are very much appreciated.

Thank you.



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Donald Hunsicker AIA
Dean, School of Design Studies
Boston Architectural College
Boston MA
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4.  RE: Funding Architecture Firm Startup

Posted 8 days ago
Unless I am missing something, whatever happened to mentoring, internship, learning the profession before striking out on your own?  Isn't it required to do an IDP before sitting for the exam and getting licensed?
Maybe I am "old timer" but starting a firm without adequate experience is a recipe for disaster, and I know, I for one, would not fund such a venture.

Brian 

Brian E. Boyle






5.  RE: Funding Architecture Firm Startup

Posted 8 days ago
You might want to steer your student toward Charette Venture Group.   www.chrettevg,com  They sponsor the Annual Business Plan Competition ($10K first prize to be used as start-up costs for new office!).  They also invest in existing firms helping them grow their practices.  

--
Edward J. Shannon, Architect
T.515-779-9050





6.  RE: Funding Architecture Firm Startup

Posted 8 days ago

If you polled the architectural community I think you will find that most individuals started their firms with a project in hand.

 

I suppose evidence of a strong commitment, along with a good list of prospects, might inspire someone with money to invest in a startup, but would be surprised.

 

Francis Pisani, AIA

4419 Fulton Avenue #9

Sherman Oaks, CA 91423

 

E-mail: fpisani@roadrunner.com

Tel: 646-239-7065

 






7.  RE: Funding Architecture Firm Startup

Posted 7 days ago
When I started my firm I obtained a small loan from a local organization called Northern Initiatives. They are a CDFI, community development financial institution. Their purpose is to help businesses start or expand. As that is their purpose they were very receptive to financing a new business. As part of the process they require a solid business plan and financial projection, which they can offer assistance with. It was a very positive experience for me and gave me the funding I needed for software, office equipment, etc. to get started.

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Richard Uren AIA
Northern Design Works
Negaunee MI
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8.  RE: Funding Architecture Firm Startup

Posted 5 days ago
  |   view attached
It is possible today to establish an Architectural Firm with no capital outlay...what-so-ever.

​It has been 6 1/2 years now since I had the notion that you could establish a national Architectural practice with zero fixed overhead and with no start up funding.  There is no place, no employees and no equipment.  We have been operating in this manner ever since 2011...currently with 6 teams, 5 of whom are headed by a mid-career project manager living in 4 different states and 5 different cities...all solopreneurs.  We currently have projects in over 30 states.

If you would like to know more, here is the link to the NCARB blog they posted on the Virtual Architectural Practice model:
https://www.ncarb.org/blog/business-cloud-building-a-virtual-architectural-firm

Also, PSMJ just featured the firm model in their 2017 August newsletter...Page 4...see attached

I will be lecturing on Virtual Architectural Practice at the Chicago Architecture Biennial on Thursday, November 9 at the WeWork Event Space - 17th Floor 5:00 PM...please come and join in the discussion.

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Peter Macrae AIA
Macrae Architecture LLC
Worthington OH
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9.  RE: Funding Architecture Firm Startup

Posted 6 days ago
A few others have stated this as well, but the first thing they need to do is get experience.  They have no idea what they don't know, and the only way to learn that is by working in a good firm that provides excellent mentoring.  They are required to do that if they want to get their license, and it is the only way they will ever learn what they need to know in order have a successful architectural firm.

Having said that, one of the things that ALL new startup firms need to do is acknowledge where they got their experience.  They will be able to build a resume of work while at a firm, but that work is NOT their own.  Their web site and any other marketing they do that includes projects they did while employed with a different firm, MUST note that.  It is unethical to claim that work as your own, even if you were the lead architect.  There are a lot of other ethical issues that need to be considered as well, but that is for another discussion.

As far as funding goes, a small business loan is a great option.  That will require a business plan, but they should put one together regardless.  It will help them realize all of the things they need to consider in order to have a successful business.  Most architects are not great business people.  We tend to be service minded designers who often forget about the bottom line.  Owning a firm means running a business, monitoring overhead, paying bills including consultants, marketing, expenses, contracts, liability, insurance, profit margin, etc.  It is not just about being a great designer.

Regards,
Brad A McKenzie, AIA
Assistant Director of Business Operations
Project Architect
SAPP DESIGN ASSOCIATES ARCHITECTS
3750 S. Fremont Springfield, MO 65804
P417-877-9600 (ext. 228)  F417-877-9696  E: mckenzie@sdaarchitects.com
www.sdaarchitects.com | Facebook Twitter | CONFIDENTIALITY NOTICE





10.  RE: Funding Architecture Firm Startup

Posted 2 days ago

Donald Hunsicker - Funding Architecture Firm Startup

The question posed by your student provides an opportunity to introduce two resources for emerging professionals: the Small Business Administration (SBA) and AIA Trust.

The SBA guaranteed business loans originated by private lenders and offers considerable assistance under the heading Start and Grow Your Business .  You might want to take advantage of the Business Resources and Services offered by the SBA Boston District Office

Senior Officials at the district office often make themselves available to provide a presentation on the SBA resources and the list of the top rated SBA business lenders, which can be helpful in establishing contact with local business lenders. There are other SBA loan products that emerging practitioners should be familiar: 1) CAPLines: Builders Line, financing for small general contractors or builders to construct or renovate a residential or commercial property; 2) Disaster assistance.

Emerging and Young AIA Professionals will also appreciate being introduced to AIA Trust.  AIA Trust offers information and resources for
New Design Professionals-Starting Out  and Architects Starting a Firm – New in Practice 

You might develop an assignment to encourage your students to conduct their own independent research of the topic of funding an architecture firm startup – the opportunities and risk.



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Muriel Watkins
Vice President at Cross Creek Strategies, LLC
Potomac MD
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