How would you start an architecture firm in 2023? What should you consider before starting your own architectural company? If you want to become a successful architect or design professional, then you need to start from scratch. There are several things that you need to take into consideration before starting your own architectural firm. The main thing is that you need to get some experience in the field.
You need to gain knowledge about the field. This way, you can build a strong foundation for your future career. In addition, you also need to develop skills such as communication, leadership, project management, etc. In this article, I have shared some tips and steps that will help you to start your own firm. Here’s a simple guide on how to start an architecture firm.
On this page, you’ll learn about the following:
- What You Need to Start Your Architecture Firm
- How to Start Architecture Firm
- Cost to Start an Architecture Firm
What You Need to Start Your Architecture Firm
If you want to start an architecture firm, you need enough experience and knowledge about the field. This is not something you can do easily. It would be great if you had enough knowledge and experience in architecture before you set up your own company.
You need an architecture license to start your own firm. In some states, you can start your firm even without a license or registration. Please verify with the local and state government the rules before you set up your architecture firm. To start your architecture firm, you need the following things,
Depending on the state license requirements, you must get an Architecture License. If your state does not have this requirement, then you might not need to get it. However, it is good to have it.
A business plan
Before you start your firm, have a business plan. A business plan includes all the details of your business, estimated budget, funding options, future business decisions, and some other information.
Set Your Budget
An estimated budget and cost of the architecture firm. This is very essential. Your cost and budget must be clear from the beginning. Also, you must be prepared for the emergency costs of unplanned incidents.
Get Business Funding
Another important thing is to arrange business funding as soon as your budget is ready. There can be many funding options, such as bank loans, private investors, small creditors, money lenders, etc.
It is the most important thing in this business. In general, networking always brings profit to your architecture business. The best place to increase your networking is at conferences or business meets. You can also use your social media accounts to make more contacts.
Who Will Be Your Potential Customer
For an architecture firm, the most desirable customer is local and state government. Besides, private corporates and construction-related companies are your main targeted customers. Any company or business that needs design work can be a potential customer.
There can be some companies that have multiple small projects. These companies tend to hire more than one architecture firm to finish their multiple projects at the same time. This does not allow any one firm to overtake the market. In this case, it is wise not to work with such companies and focus on government projects from local and state governments.
How to Start Architecture Firm
There are some elaborate steps to start your architecture firm. It is not an easy task always to form an architecture firm. If you’re starting your architecture firm from scratch, then here are the essential steps,
Step 1: Type of Service
The first step to starting your architecture firm is to decide what type of service you will offer. For an architecture firm, there are many services you can provide. For example, interior design, construction design, old-building restoration, sustainable building design, and others. It is required to decide on which service(s) you will provide. Based on that, you can decide on the price structure.
Step 2: Register As an Architect
Before you start your business, you are required to register with the Council of Architecture as an Architect. This is mandatory for every architecture firm to be registered with CoA. This registration is to give the company official recognition of being an Architecture Firm.
The entrepreneur must have a professional Bachelor’s degree in Architecture or B.Tech from a recognized institution. You can have a Master’s degree as well, but that is not mandatory. Once the course is completed, you get your certificate from the University or institution, and you will be able to register with CoA.
Step 3: Get Your Business Registered
As soon as you register with CoA, you must register your firm with the State. Before you register your firm, you must have a business name. You can find and register your business name through the official website of the Secretary of State. You can register your firm as a sole proprietorship, an LLC, a partnership, or a corporation.
It is easy to start an LLC and a sole proprietorship than other types of business. LLCs have less paperwork and have pass-through taxation. Unlike corporations, LLCs do not have double taxation. Hence, it is beneficial to register your architecture firm as an LLC. For a better idea about LLCs, you can explore LLCBuddy.
Step 4: Find Potential Customers
To find your targeted customers, you need to expand your network. It is not always easy to grow your client base. However, it is not difficult either. You have a handful of contacts, they have their own contacts, and their own contacts shall have other contacts – this way, it will be easier to add more people to your circle.
You can also take help from a professional platform like LinkedIn to find similar profiles who are interested or related to the same business. You might get a hundred such profiles. You can personally connect to them and discuss your services.
Apart from this, you can attend conferences, summits, and other business meets to meet people, share your experience and knowledge, give speeches, and discuss your work and services in the public forum.
Step 5: Obtain the Required Licenses and Permits
The architecture business definitely requires specific licenses and permits to operate. You must check with the state and local government for the license requirements. If you require the Architecture license, then you can obtain that in 3 different ways.
- First, you can finish your course on Architecture from a recognized university/institution.
- Second, you can work under an experienced architect as a trainee/intern and get properly trained.
- Third, you can attempt and pass the Architect Registration Exam and get the license.
For other licenses and permits, you must check with the State and local city authorities and apply for the same accordingly.
Step 6: Promote Your Business
After you form your business, you must promote your services. You can do it in person or through social media platforms. Cold outreach, social media posts, interaction with your followers, LinkedIn posts, and other digital content marketing will be effective. On the other hand, you can promote your architectural firm business offline as well.
Step 7: Start Selling
The final step is here. You are almost done with all the important steps to form your Architecture firm. Finally, you can start selling your services to your potential customers. To increase sales and promote your business simultaneously, you can introduce offers and discounts on specific projects.
After Starting Your Architecture Firm
The above-mentioned steps are the basic steps to start your firm. However, there is some more work to be done when it comes to running your business. Following are some of the things you need to consider,
- Business Accounts: Get business bank accounts to separate personal expenses and business expenses. Also, get a separate tax account and other financial accounts.
- Insurance: It is required to protect your company by getting insurance. If your company has employees, you must get coverage for your employees.
- File tax reports/annual reports: The next thing is to file tax and annual reports after a year. All businesses have to pay certain taxes. For example, an LLC in Texas and an LLC in California must pay a yearly Franchise Tax. On the other hand, a Florida LLC does not have to pay a Franchise tax.
- Website: Get a website that can easily be accessible. Share images of your work, service details, and contact details. Also, you must add an online appointment booking on your website to get more customers.
- Create a Brand: Get a unique logo, and create a brand to expand your business further. There are professional service providers who offer these services at an affordable price.
Cost to Start an Architecture Firm
Starting an Architecture firm is not a cheap deal. From registration with CoA to getting an office and website, it costs a lot. The average cost of starting an architecture firm is $5000 if you work from home. There are two types of costs, a one-time set-up cost and an ongoing maintenance cost. Company registration fee, CoA registration fee, Software fee, and such are one-time fees. On the other hand, annual reports, license renewals, taxation, and website maintenance costs are ongoing costs.
Hardware maintenance costs, such as computers, phones, printers, and other tools, need to be maintained as well. If you rent an office, then it will cost around $1500 monthly. The average cost of starting an architecture business is $8000 – $10,000 (approx). This amount is estimated and can be changed.
Revenue From Your Architecture Firm
Architecture firms are specialized businesses. Most of the firms get paid based on either projects or hours. In general, an architecture firm earns $150 (approx) per hour. State government and big private companies mostly pay based on the project they offer.
Overall, an experienced architect earns around 20% profit yearly. Now, depending on the years of experience and client base, the profit amount can be reduced or improved.
If you have a single-member LLC or a sole proprietorship for your architecture firm, you might have to handle everything. If you have a mid-sized business having 10-30 employees, then you can divide all the tasks into separate departments, such as design, print, research, production, marketing, sales, accounts, and business development.
It costs $5000 to $8000 (approx) to start your own architecture firm. If you start from home, it costs less than renting an office.
You can grow your architecture firm as soon as you form it. You can hire people from different fields like design, production, marketing, and accounts and expand your firm. Also, you must check on the initial budget before you expand.
You can make money by offering architectural services, such as designing, consultation, restoration, etc. You must decide on what type of service you will provide to make maximum profit.
Architecture firms are specialized businesses. Hence, you must have knowledge and experience in designing, building restoration, production, and interior design. When you start, initially, you can choose the type you are good at. For example, if you’re good at designing, you must start with offering design. You can also start a consultation.
This article has almost every basic thing about starting an architectural firm. You can follow these essential steps to form your own company. If you have any queries or feedback to share, do let us know. Comment below in the comment box to share your views with us.