Financial Management Terminology for Architects For many design professionals the subject of Financial Management is complex and can become problematic if the terminology used in the discussion or writing of this subject are not precise. For clarity, the term, Financial Management, refers to the accrual-basis accounting process of a professional design firm. Accrual-basis accounting is primarily used to determine true profitability and the metrics, or key financial performance indicators … [Read more...]
Three Financial Basics
How To Fix Your Profitability Problem as a Small Firm Architect
Why Architects Miss Their Profitability Targets For all professional design firms there are two different, yet interrelated levels of profitability – a firm’s overall profitability and the profitability of each completed project. Historically, the profitability of professional design firms is, on average, in the range of 8-12%. While many firms achieve profitability exceeding 12%, the majority struggle to achieve their targeted profitability on every project, every year. In spite of the … [Read more...]
Five Fundamentals I Wish I Knew Before Launching My Architecture Firm
When Annmarie and I launched Fivecat Studio, we were "young and dumb". We were optimistic and enthusiastic, but we didn’t know what we didn’t know. We were 29 years old, had a dream of starting our own firm and jumped. I always knew I would own my own firm. I’m a born entrepreneur. What I did not know though, was how hard business would be. Blessed with friends who needed architectural services for their new restaurant, we signed a contract and thought we were on our way. We thought that was … [Read more...]
Financial Statements for Architects
Without any education in business basics, architects rarely understand the fundamentals of business success. Some months we have money left over and other months we struggle to pay each bill. For years, I ran my business with no real understanding of how to end each month with a profit. Seven years into owning our own small firm, Annmarie and I decided to make some changes. It was during that year when I committed to a business program offered by Westchester Community College titled the … [Read more...]