Architects work notoriously long hours, so much so that when you calculate an hourly rate, it doesn’t go very far. So, what steps could you take to make sure your time is valued by others as much as it is worth to you?

Host Lisa and her guest Dominic Hailey have about 40 years’ experience of the business of architecture between them. Tune in to hear them chat about how to make money as an architect and share their tips on how to identify the right niche for you.

 

For them a crucial step is to identify your market and specialism, and to exploit that to be as niche as possible in a particular sector to ‘line the nest’. For Lisa it’s the Pride Road Franchise model working directly with clients living in the many thousands of 1930s semis in this country.  For Dominic it’s the ‘grey pound’ and later living schemes and understanding how these are underpinned by clients and funds in order to best support the development journey. In both cases, having a steady stream of income from a particular sector helps underpin stability, growth, and profitability for a practice.

Pride Road

The Pride Road Franchise grew out of Founder Lisa Raynes’ refusal to accept that there was only one way for a woman to have an architecture career and a family life.  She built her practice in the domestic sector, and then invested to turn her business into one that other ambitious architects wanting work/life balance can buy into. She had a seat on the RIBA Council (2015-18), was Chair of Women in Property NW and founded Manchester Curious, an urban architecture outreach festival. A franchise can be understood as a business-in-a-box – you are buying the experience, systems and processes of business success and enterprise.

At Pride Road, you are also buying a very clear, tried and tested business model that is all about valuing our time. This is exemplified in our Concept Design Workshops, in which we hand draw our clients options in front of them, and charge for them. That way, the clients can really see the value of the work that we put into our projects.

Dominic Hailey

Dominic Hailey has worked in architectural practice since 2001, designing and delivering architectural projects ranging in value from £1m to £100m. With an approach based on creating and maintaining positive, productive relationships with stakeholders, clients, and the wider project team, his experience in the residential sector, both with private developers and registered social landlords, gives him a broad base of knowledge and expertise in both design and technical areas.

Dominic joined ColladoCollins Architects in 2015, and now leads the teams responsible for later living and care projects, as well as construction and delivery work, alongside sharing the management of the 35 strong practice with four co-directors. Through the practice he developed the Just Living book, co-written with research architect and specialist Carly Dickson, and he has presented the research and findings at a number of sector-specific conferences and events.

How do you value your time?

Dominic explains that our time is worth the cost of living, the cost of running a business, and a markup/ profit. So, demonstrating the value which underpins a reasonable profit is really essential, because that level of profit is equal to the level of skill, specialism and responsibility that you take on. Lisa’s process of sitting down with clients and drawing their options in front of them, in Concept Design Workshops, demonstrates her skills and her level of specialism, and therefore her value, beautifully.

During Lisa’s training, she learned to cost jobs by splitting them into thirds; overheads, your time and staffing, and profits. This structure doesn’t exist in Dominc’s business, however, as the larger the business, the greater the costs, so he calculates that the overheads are around 1.7-1.9 times the cost of the staff’s time. When it comes to judging profit, you have to look at the level of specialism and skill that you’re delivering to your project, and if you can establish a value in a particular niche, it’s reasonable to demand a higher premium to derive a greater profit. When you’re talking about £100 million contracts, small percentage increases in profit can make a huge difference to the lives of your staff or the longevity of the business.

Why should you make the decision to work in a specific field or sector?

If you’re good at it and enjoy it, you can get more out of it in terms of job satisfaction and profit, as you may be able to establish yourself in the sector so you can charge a premium.

Dominic works in the housing for older people sector, which has been seen, for the last 5 or 6 years, as the next boom market for residential development as there are lots of people who raise families in a house which is no longer fit for purpose, and a more appropriate form of housing could be provided. This is one of the last generations with property wealth, and in 10-15 years the sector may change significantly. For now, the opportunity to offer a suitable, adaptable home to someone, that’s suitable for their future needs, rather than an older property with steep steps, higher maintenance costs, and narrow corridors is a good offering for people.

This is separate from the care market, which is end of life, palliative care. Instead, he has worked on a project that opened up 100 appartements for older people, with communal facilities on the ground floor. It’s designed so staff can circulate round the building without having to come into contact with the residents for pandemic safety. At the same time, there are spaces that are designed to be more social, so it isn’t just like living in a matchbox. The sector is being heavily invested into, and it’s a nice sector to work in as an architect as you can see your designs realised, which you don’t often see with commercial developers.

How did you get involved in working in that sector?

Completely by chance, as Dominic worked on a couple of projects that involved housing for older people which interested him. When he joined ColladoCollins, they were looking for an architect who had some experience in that sector, so he serendipitously happened to fit the bill.

Fortunately, his workplace is one of lively discussion and debate around ideas, which ultimately encouraged him to self publish Just Living, which looks at the social, financial and accessibility and design aspects of his sector. To get a free pdf of the book, and possibly a free hard copy, email justliving@colladocollins.com. He wrote this to put himself out there as a serious thinker in his sector, in order to generate interest around his business to increase profitability.

What should you think about when choosing which sector to pursue?

Dominic explains that you should look for a sector that’s currently buoyant and looks sustainable in the medium to long term. You have to look at the affluence of your market- its ability to afford what you’re offering. Ideally, in the Pride Road example, if you can find the next part of town that everyone will move to after all their houses are done up, you can find the next 3-5 years worth of work.

ColladoCollins, the practice that Dominic co-directs, is also involved in build to rent; co-living, which is the step between student housing and full build to rent; and some small education and public sector housing projects. Their focus is on where the residential market is going, so what people can afford. We’re seeing that the retail and the large out of town shopping centres are effectively caving in, so those shopping centres are prime residential development land, and clients always like architects that can come to them with a site.

How does the later living model operate?

The sector is market for sale residential, but the building often includes a lot of services or amenities. Often, in order to qualify for the use class of C2, which is housing with care, a minimum number of hours per week of support is required, which can go from secretarial support to medical care. All the initial sales, in order to appeal to the market, are at a slightly lower profit level than market for sale residential, but, at the end of the customer journey, there is an exit fee, so the building operator assists with the reselling of the property and gets a cut of the resale value. The building operator may be able to resell the property 7 times over 50 years, so they can make a good profit.

These models are well established in the USA, Singapore and Australia, as the quality of life benefits can easily be communicated, but relatively new in the UK, perhaps because we are more cynical. This is reflected in market research that shows that individuals from the above countries prefer for concierges to greet them by time, but British people prefer to be greeted as Sir or Madame.

How do you, at Pride Road, express to your franchisees your value proposition?

We have a tried and tested model that we use as a basis. We only work in domestic residential: single or two storey extensions, loft conversions or basements. We operate at the lower end of the market, an area which is underserved by architects so it’s easy to stand out and to have a USP, and we rely on having a relatively high turnover of clients, so it’s a numbers’ game.

The great thing about a franchise is that we do constantly pool our resources and tweak our business models to suit different areas, while targeting the same niche which is set up to work nationally. However, with the residential market, conversion rates into projects can often be low and, as Dominic comments, it can almost be a full time job keeping on top of your clients. We therefore have a really slick, automated CRM system that takes the pain out of managing clients.

How do people find you?

People find us through a lot of marketing, networking, and our website as we do a lot of SEO work with Google. We help our franchisees to produce regular social media content to attract clients.

Many clients will drop architects once they get to the building regulations stage, so how do you convince them that keeping you through the journey is actually better value for them?

To keep clients, we simplify our offering into three stages: the Concept Design Workshop, planning, and building regulations, and we ensure that the last stage covers the rest of the fees as clients don’t want to pay for anything else afterwards. That set is getting tighter and tighter and that’s it, so they either stop at planning or they commission the building.