At EntreArchitect, we talk a lot about building better businesses. But what does “better” really mean? For many of us, it means building something lasting—something valuable. Something we might someday pass on, sell, or step away from without it all falling apart. In a recent episode of the EntreArchitect Podcast, I sat down with Brad Farris of Anchor Advisors to talk about exactly that: what it takes to grow and sell a successful architecture firm.
Brad’s been working with agency and expert firm owners for decades—guiding them beyond the $1 million mark and helping them build businesses that are not only profitable but prepared for exit. Whether you’re a young firm owner just getting started or a seasoned architect starting to wonder what comes next, this conversation is packed with valuable insights.
Here are my biggest takeaways—and why I think every architect should be building their firm like they plan to sell it, even if they never do.
🎧 Be sure to listen to the full episode at https://entrearchitect.com/602
You Are Likely the Bottleneck
One of the first things Brad said hit me hard: “The thing that’s most likely stopping your firm’s growth… is you.”
As architects, many of us love the work. We want to stay close to the design, the details, the drawings. But when the firm owner is doing the technical work, we’re not doing the higher-value work—like finding clients, building systems, or leading a team.
If you want to grow, you have to let go.
You don’t have to abandon design forever. In fact, Brad pointed out that one path is to build the firm so well that you can come back to design later—on YOUR terms. But you can’t scale a business if you’re also its primary technician. That’s the truth.
What Makes a Firm Valuable?
Spoiler: It’s not your awards, your beautiful portfolio, or even your reputation—unless that reputation is driving consistent inbound leads.
Buyers look for one thing above all: cash flow. If you want a sellable firm, you need to show that the business can generate reliable, consistent income—without you at the center of it.
Here are the key factors that increase value:
- Recurring clients (especially B2B)
- Strong operating margins (Brad recommends 20–30%)
- Systems and processes that make the firm scalable
- Team members who can manage and lead without you
- A client acquisition system that turns money into leads
If your firm relies on your personal design aesthetic or one-off residential clients, it’s much harder to sell. But if you’ve built a machine—a system that creates value with or without you—you’re on the right track.
There Are Three Levers in Every Exit
When you sell a firm, Brad says you get to pick one of these three to optimize:
- Maximum value
- Perfect timing
- Lasting legacy
Choose wisely. Because each requires a different strategy.
Want the most money? Sell to a strategic buyer (often a competitor) who can absorb your firm and its revenue. But they buy on their schedule, not yours.
Want to protect your legacy? An internal sale to employees or partners might be your path. That means training leaders early, developing business skills—not just design skills—and planning financing options like phantom equity.
Want to leave on your timeline? Then, you may need to settle for a lower valuation or arrange a gradual exit—like a 5-year earnout.
Every architect should be asking: Which of these three matters most to me?
Phantom Equity: A Smart Path for Internal Sales
One of the biggest challenges with selling to your team is financing the deal. Most employees aren’t sitting on the cash to buy your firm outright. Enter: phantom equity.
Brad described phantom equity as a way to reward team members for growth without giving them legal ownership (yet). They earn “phantom” shares based on business performance, which they can eventually convert into real equity—or use as a down payment when they buy the firm.
It’s like dating before getting married. And it protects both sides from the risks of jumping into full partnership too soon.
Timing is a Trap—Plan Early
Too many architects wait until they’re 60 to think about an exit. That’s a mistake.
If you want to sell at 60, you need to start the process at 50—or earlier. Why? Because the best exits take time. Relationships need to be nurtured. Leaders need to be developed. Systems need to mature.
And most importantly? You want to sell while you’re still energized. If burnout sneaks in, your business will start to slide—and so will its value.
Start with a Longer Time Horizon
In the early days, we’re all just trying to survive the month. But as Brad pointed out, real growth comes when you start thinking years ahead—not just weeks.
- Where is the market headed?
- What systems need to be in place?
- Who are the future leaders on your team?
- How can you get out of the weeds?
That’s how you build a firm that doesn’t need you—and therefore has value to someone else.
The Biggest Mistake? Not Planning at All
The sad truth is that most architects don’t sell their firms. They simply shut the lights off and walk away.
But you don’t have to be most architects.
Build your firm like it’s an asset. Like it has value beyond your name. Put the systems in place. Train your team. Build relationships with potential buyers. Think bigger.
You may never sell. That’s fine. But the process of building a sellable firm will give you freedom, flexibility, and financial strength—whether you sell or not.
Brad’s Final Thought: Lead from Your Best Self
Before we wrapped up the podcast, I asked Brad the one thing small firm architects can do today to build a better business tomorrow. His answer?
Start by leading yourself.
So many of us spend our days reacting—putting out fires, racing through emails, handling crises. We need to slow down and build practices that let us respond with clarity, composure, and purpose.
Take breaks. Create space. Be intentional. When you lead yourself well, you can lead others better. And that’s how great firms are built.
If this conversation inspired you—or if you’re ready to start planning your firm’s future—I encourage you to take Brad’s free assessment at anchoradvisors.com/growth-phase. It’s a quick way to see where you are in your growth journey—and what to work on next.
And don’t miss the full podcast episode. This one’s a game-changer.
🎧 Listen now at https://entrearchitect.com/602
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