Looking forward: Hidden Sources of Income

Following is a list of services for any office to generate additional sources of revenue. I started generating this list a few years ago and have brought it up in different ways at previous firms I worked for. These ideas might be helpful for any architectural firm.

Specifications

A good spec service costs about $15,000, most of the time this is contracted by the client although sometimes it's a part of the architectural contract. Even wen paid directly by the client, in addition to the direct cost to the client, architects have to spend a substantial amount of time coordinating with the spec writer. I've estimated this cost at about $5,000. By writing the specs in house an architect can capture the profit of writing the specs as well as the cost of the coordination. There are good internet-based spec writing services that costs about $3,000 per year, these offer unlimited spec writing ability and ensure that all references are coordinated, including testing standards. It also checks on a continual basis that all products specified are up to date. The spec writing can be handled by a project manager or a very good job captain. Estimated labor cost to an office is 40 hrs x 120/hr (estimated billable rate for a PM) = $4,800 + 10 hrs x 185/hr (estimated billable rate for a principal or senior associate to review the work) = $1,850 for a total of $6,650 resulting in a profit of approximately $8,000 per set of specifications.

It should be noted that the 40 hours is estimated for someone with only a very basic idea about specification writing. A second set of specs should take half the time.

Interior Design

The interior design services are often contracted separately by the owner, but like specifications they require a substantial amount of coordination by the architect. By offering interior design services the architect collects the fees and pockets the portion of labor that goes for coordination.

Marketing Graphics

Same as interior design and specifications.

Tenant Improvement for downsizing

As companies downsize in this economy they look for firms to handle tenant improvement in their reduced spaces. In many cases these firms relocate to more affordable parts of town. In some cases they do downsize. In some its both. Architects have the capability to handle this job for them, including not just space planning but interior design as well. If architects want to expand their services they could offer a turn-key option including coordinating the entire move or downsize event.

LEED and Green Building consulting

As more clients become aware that going green saves green, architects can offer ways of cost reduction for utilities that also have the side-benefit of increasing productivity of their staff.

Smart Apartments (see my other blog posting about this)

Borrowing the name from the European Smart Cars, the objective is to offer developer clients innovative compact and intelligent Smart apartments that occupy a small footprint while giving the appearance of larger areas. These apartments will encompass green principles and should be designed to easily meet the requirements of LEED Gold Certification.

Innovation

We can, but don't have to, reinvent the wheel. There are plenty of little products or methods of construction that architects could be helping design better. How many times have we heard out in the construction site or from the drafting room "someone should invent a way to..."? We should become that someone. I read about a small firm in Barcelona, Spain, that "has only three completed buildings to its name but holds nine patents for building technology", according to an article in Hanley Woods' Modern Materials supplement. With all the creative talent most architectural firms have, why aren't we innovators? Why don't we lead instead of follow? Why do it? not only does this get us notoriety but also residuals. We don't actually have to physically invent a material like the ETFE that clads the Water Cube of the Beijing Olympics, it can but doesn't have to be that forward-looking, but we can write about methods to simplify existing technology. We can also be innovators in the sense that we can be the first, or one of the first, to apply an innovative technology; then we milk the heck out of the publicity.

A firm is born

It's been a little over three months since I was laid off from WMA on June 30, 2009

When I was first informed, three weeks prior to that date, I braced myself for an adjustment, although "brace" is probably too strong of a word in this instance. I'd been preparing myself for almost a year. I knew that it was only a matter of time, and I had told this to my peers on various occasions. There was no way that WMA could survive with it's upper management team intact and at least two senior associates would have to go, and it was natural (as I saw it) that the two most junior associates (myself included) would be chosen.

When the time came to pack up and leave I had it all planned out and I wasn't in any way depressed or upset. I'd created the concept for three businesses only marginally architecture related that I wanted to start up if I wasn't successful at finding a job. Understanding that the search for a job would take a while and that starting up even the most realistic of my business ventures would also not come quickly, I fancied myself putting in at the very least a couple of months of leisurely bike rides, catching up on a backlog of reading, and completing a long list of DIY things around the house.

As it turns out, that leisure lasted about a week. Immediately an old client whom I'd brought into WMA gave me a small project, followed by one of my former WMA clients who dropped a big project on my lap with the promise of others. One job offer and an interview offer also came my way, both unrequested. In addition, I received leads on various other small projects ranging from painting a house for a famous political figure to designing a bicycling museum. So many choices when I didn't expect any, and there went my plans for my businesses.

I've now made the decision that if there is work to be had in this economic climate then there will certainly be plenty of work when the economy picks up; I've officially started my architecture practice. For now it's called Ovalle & Associates, although that name is subject to change. This is a great opportunity to put into practice all the ideas that I had for WMA and for previous firms. I will have no excuses not to implement the ideas and I will have no one to blame if they fail.