A gratifying part of my business is helping design professionals start their own practices. I usually have a gut feeling about who is going to make it, and who may decide that being an employee wasn’t so bad after all. Upon reflection, I realize it isn’t a gut feeling, but I see a certain set of characteristics in successful entrepreneurs. Here’s my version of “Do You Have What It Takes?”
First, some absolutes about design professionals: Job security is increasingly vulnerable to the vagaries of the economy; given such tight profit margins, design professional firms simply don’t carry employees while waiting for work to come in the door. Design professionals really, really love what they do – the substance of what they do– as for the business part of the practice, usually not so much. Finally, the words architect, engineer and well-capitalized rarely appear together.
Those who have long-term success in their own businesses often talk about their longtime dream of “running my own shop,” or offer some variant on their understanding of and desire for independence. Some people start their own businesses because a job search has been difficult or, for whatever reason, they feel they have no other choice. Starting a business reluctantly is not going to work. There are too many personal demands, monetary demands, client demands that will cause you to lose sleep. If you aren’t going to lose this sleep joyfully and enthusiastically with the utmost confidence in your business model, look for employment with someone else.
My cousin recently bought a store and he drove to work every morning worrying the employees wouldn’t show up (sometimes they didn’t), he found himself refereeing employee disputes and one morning the police came in to arrest one of his employees. All of this within the first couple of weeks. The point is a lot of your problems as the owner and leader of the business will have nothing to do with the practice itself. You have to be prepared for these unexpected challenges, embrace the problem-solving and have confidence in your solutions.
As the leader of a business, you must approach each new day with the thought that this is going to be the best day ever. If you are not able to communicate constantly with pride and enthusiasm about your endeavor, no matter what adversity befell the business yesterday or even an hour ago, how are you going to attract clients that have confidence in you? How are you going to convince employees that your business is a great place to work? How are you going to persuade your spouse to forego the predictability of two paychecks a month? On a related note, you are probably the first marketing employee of your new firm; if sales is not your thing, you better have a failsafe plan in place for attracting clients.
Last summer, Quartz published a much-discussed article that argued the number one predictor of success for entrepreneurs is access to capital. Those who have a lasting business have money set aside or access to loans in order to get through the typically-dry start-up period and have a long-term ability to access funds for operations or growth, as needed. I cannot overemphasize the need for a realistic budget for the first twelve months of the practice with an assumption that not one dollar is coming in the door for the first six months.
Like any job, there are aspects of the business you will enjoy and tasks that you will avoid like the plague. You need to recognize and make time for the important things. Getting clients in the door is important; contemplating what shade of indigo to use in your logo may not be an optimal use of eight hours. Those who set a schedule and stick to it get more of their necessary and important work done because they are not putting off the less desirable tasks as they decide what to do “in the moment.” I strongly suggest getting some specialized help, even if you are starting lean, so you can optimize the use of your own time. Hire a college student to help with administrative tasks; hire a part-time bookkeeper to work on the books and the billing.
Having your own business can be really rewarding or it can be a disastrous drain on you,your wallet and those around you. Taking a realistic look at who you are, how you like to spend your time and why you are thinking of starting your own practice is a good first step to success.
Originally published in the New York Real Estate Journal on April 5, 2016
The Benefit Corporation is considered a hybrid of a for-profit corporation and a not-for-profit in that the directors do not run the corporation solely to maximize corporate value for its shareholders.
Design professionals all over the world have taken to heart the words famously crooned by Frank Sinatra, "I want to be a part of it, New York, New York."
Starting a business and forming an entity are two different things.
I am seeing a lot of action on the Design Professional Service Corporation (DPC) front. The DPC is the only entity in which New York permits non-licensed owners of architecture, engineering and other design professional firms.
Architects and their practices are highly regulated because of their charge to safeguard life, health, property and the public welfare.
Many of my clients and potential clients are in the process of setting up their own design firms.
Starting an architectural firm is a big decision. One of the next big decisions for the architectural entrepreneur is deciding what form of business entity will be appropriate for your current practice as well as your future practice.
When a client comes to us to form a New York business, the first step we take is to evaluate the proposed name of the entity.