The Passion, The Process and Problems of Running a Design/Build Architecture Firm

Do you want more control? More money? More happy clients? More architecture with better design? Is design/build the answer to our professions problems? Will building your own projects be the solution to success for your small firm? What does it take to run a successful design build firm?

This week on EntreArchitect Podcast, Mark speaks with Jim Zack and Declan Keefe about The Passion, The Process and Problems of Running a Design/Build Architecture Firm.

About Jim and Declan

Jim Zack is based in San Francisco, California as the co-founder and partner at his design build firm, Zack de Vito: Design + Build. He visited EntreArchitect Podcast on EA102: Risks and Rewards with Architect Developer Jim Zack. He’s a current facilitator at EntreArchitect Academy’s Design/Build Mastermind Group.

Declan Keefe is a founder and owner at Placetailor and a three-time guest at EntreArchitect Podcast: EA130: How to Build a Successful Architecture Firm That Works with Architect Declan Keefe, EA141: How to Build a Brand that Resonates with Your Most Valuable Clients, EA134: How to Get Started as an Architect Developer.

How are your design/build firms structured?

Jim has been involved in building things for a long time and he’s been in business for 25 years. He began working construction when he was 15 and was trained in carpentry long before he was an architect. Zack de Vito is organized as two different companies: one a construction company and one architecture firm. They’ve found that a lot of liability and contractual details organize themselves well in those two separate businesses.

Conceptually, they try to make it feel like one company. Architects come to the office and sit and draw, and construction workers go to the site and build. As hard as they try to integrate the two day in and day out, it may not always be as seamless of a process.

Zack de Vito has a project manager, estimator, a partner at the construction company, 6-10 carpenters, and 5-8 people in the office ranging from an interior designer to Jim’s wife, who performs office management and marketing for the firm.

Placetailor is set up similarly although technically their architecture and construction companies are formally one business, where their development entity is a separate business. As far as scale, Placetailor has almost the same team setup as Zack de Vito.

Their business came from a true design/build model where they weren’t doing any design for any other firms, and all their projects were able to be completed internally. In the last few years, they’ve switched to provide architecture for other builders as well. Even though they’re one business, they functionally work as architecture, construction and real estate development. Development is separated because it has a much higher level of risk involved.

Was there a point where you went from a traditional architecture firm to an architecture design/build firm?

For Jim, it’s been an evolution. He’s entrepreneurial by spirit, and did a design/build project with his dad when he was 23 years old to design and build two house and each have one. Eventually he went to architecture school, bought a house and remodeled it. When he opened an office and started making things, his knowledge led him here. He wanted to be a cool designing architect who wanted to get his hands dirty.

A lot of their work has been self-motivated projects where they design and build buildings that they owned. The more they did it, the more they realized they needed to start doing that for their clients as well.

Declan’s business was started as a design/build firm. They saw a split between architects and builders in the industry that was leading to lower quality buildings and design, and they decided to do something about it. As they began to create higher quality buildings, they quickly got into high performance, energy efficient models, which launched them into the energy efficient design side that they’re working in now.

The development side came from their desire to create consistent work; they decided to take the risk and create their own projects. They wanted to create a demonstration to other developers: if they could prove the business model to other developers, they would hire Placetailor to do the design/build work they wanted to be doing. Now they’re even doing development consulting where they share how they do things and find success doing it.

Declan, how does your employee-owned business work?

When someone becomes an owner, they are an equal part owner: they have an equal equity stake and a equal vote. Anyone who comes into Placetailor who sticks around for three years and meets a certain line of criterion, then they can become an owner too. Right now, there’s five owners and a sixth coming in at the new year. There are five more people in the company who, if they’re around in a few years, may also have an opportunity to become an owner.

The ownership decisions are defined really clearly, and everyone has to be on board for a decision to move forward. As an ownership, they’ve decided what percentage of profits are evenly distributed among the owners.

What advice would you give to someone looking into design/build?

It depends on the market and the person. Jim is a “maker”, and the motivation to build is what got him to this place. You have to make a decision on the front end: are you a builder or a manager contractor? There are a lot of design companies who want to start managing constructing but are effectively managing owner builder projects. They’re set up so the client takes all the risk and they just kind of assist through the process.

If you’re a young architect doing it on your own, and you’re doing it to have control, you’re doing it for the wrong reasons already. Declan believes you need to learn how to communicate, facilitate and manage. Do it because it’s the business model you believe in and it’s the way in which you want to work. If you want to be able to actually manage things, you need to do the work to gain the knowledge of what’s hard, what things cost, why to make one decision over another. If it’s possible and you’re willing, find someone who’s willing to take you under your wing and learn the skills you need to know.

First, figure out why you’re doing this. If you’re looking for control over the project, you may be looking for more of an architect as developer role.

What are some risks of being a design/build architect?

Figuring out how to profit from construction is a huge challenge. There can be a naive attitude that the contractor figures out the price, puts a markup at the bottom and walks out with a bonus at the end. It’s taken them a lot of time to work out how to best manage their finances. The “huge markup” turns into nothing if you don’t manage it well.

To build a building verses design it, there’s a lot more people involved. When you deal with more people, you have the risk of dealing with all the things that could happen with all the people that are involved. These things can happen in any business, but the more people the greater the risk. It makes things difficult on the hiring side; how do you know if someone is good at their skill until you get them in the field with your team? Every little decision affects your bottom line.

A big part of being a design/builder is trusting that you have the right people in place who can do their jobs. If you can’t let go, you won’t be able to do the job with all the moving pieces that go into it. The skillset of an architect is set up to think creatively about the business side, but often we see people falling into the same, easy business model. You can do your business differently if you want.

What would you say is the best part of being a design/build architect?

Jim enjoys going by the job site, seeing the development, the framing, the foundation, the finishing, and the final product. He loves being involved in the day to day construction.

Declan loves having the team, those who are doing the job in the field, in the office, and on the investment end. There’s a wide range of amazing people they get to put together to make amazing things for their clients.

Connect with Declan Keefe online at Placetailor.com and on Twitter @placetailor & Instagram.

Connect with Jim Zack online at ZackdeVito.com or on Facebook.

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