This book is a practical guide for students or those already running or thinking of running a small practice on how to set up and run a small architectural practice and how to run multiple small projects efficiently. It is split into three distinct sections: Part 1 begins with the practicalities of setting up a small architectural business; Part 2 goes into detail on how to run your small practice, including valuable advice on business planning and cash flow; and Part 3 follows with guidance on running multiple small projects. Structured around the RIBA Plan of Work, this section has plenty of examples of the kinds of projects - both domestic and non-domestic - that the small practice might take on, and finishing with 10 illustrated case studies of domestic and commercial projects from £50, 000–£750, 000.
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The RIBA defines small practices as those that employ between 6 and 10 people, and micropractices as those that employ between 2 and 5 people. A huge number of practices fall into this category, and the range of projects on which they work is extensive.
This book will mainly focus on the very small or micropractice, as well as the sole practitioner architect operating from a home office and taking on relatively small projects. As well as architects, structural engineers, quantity surveyors, VAT consultants and party wall surveyors can all work successfully as sole practitioners.
Company structure
Once you have decided whether you are going to work on your own or with others, how many people you would like to employ, where you will be based, the type and size of project you prefer, the turnover you hope to achieve, and how much capital you can access, you can then decide what type of company structure is best suited to your needs, taking into account the advantages and disadvantages of the different options. For more detail on company structure, see pages 33–35.
Management structure
The sole practitioner architect will do everything in the office – from tasks requiring skill and experience such as bringing in work, running projects, IT, and managing finances, to the simplest of tasks such as changing the ink in the photocopier, going to the post office or ordering stationery. For this reason a sole practitioner must be organised and efficient to avoid spending a disproportionate amount of time on admin, which would negatively affect the practice income.
THE SOLE PRACTITIONER WHO RUNS A SMALL HOME OFFICE WILL HAVE A DIFFERENT WORKING DAY FROM A PARTNER IN A LARGER PRACTICE. SOME ARCHITECTS MIGHT PERFORM BRILLIANTLY IN A LARGE PRACTICE BUT FIND THE CHALLENGES OF A SMALL PRACTICE IMPOSSIBLE TO MANAGE, AND VICE VERSA.
Architects choose to operate at a small scale for a variety of reasons, including being able to work from a home office, or they might simply enjoy working on small projects with domestic clients. If a small practice is well set up and professionally run, the practice should be able to grow to five or more members with ease if growth is an objective.
With four or five people in the office a more formal management structure and office accommodation will be necessary, but there is also more scope for employing staff with a range of qualifications, experience and skill. Apart from one or two senior architects, the office might employ a Part I or Part II architect, an architectural assistant, an office manager or an interior designer.
Turnover
A sole practitioner with low overheads and working from a home office might only have to do between £600k–£1m worth of construction work, spread over a number of projects, to generate sufficient turnover to run the practice successfully and earn a reasonable salary (comparable to what an architect would earn in a larger practice). With, say, five staff a practice can take on a wider range of projects and larger projects but would have much higher overheads, including the cost of renting office premises, so would have to bring in significantly more fee income per architect than the sole practitioner working from a home office.
A small practice might decide to run three or four projects rather than one project of the necessary value, for less risk in terms of turnover and cashflow. However, jobs that are too small may not be viable, so it is important to establish what size and type of job is right for your practice and only take on larger or smaller projects after careful consideration.
Profit
The profit made by the practice will depend on bringing in enough work, charging the right fee for each project, the overheads, and how much employees are paid. In cities like London there is a lot of work that can be done by small offices and sole practitioners, and the fees are likely to be higher than elsewhere in the UK, but overheads and the cost of living are also higher.
Whatever the size of the practice – whether one person or five, whether in your attic or in commercial premises in Central London – to be successful it must be set up and run as a business with appropriate management structure, systems and procedures to deliver a professional service. Every practice must achieve a balance between fee income and company overheads and generate a profit in order to survive and thrive.
Small practice projects
Projects for private domestic clients are the main but not the only source of work for sole practitioners and small practices. Within the domestic category projects will vary significantly in value, and there are numerous sub-categories, some of which will require specialist skills – such as the skills of a conservation architect.
Examples of small practice projects
Residential Work
works to privately-owned Grade I-listed houses
works to privately-owned Grade II-listed houses or apartments in conservation areas, including extensions, refurbishment and alterations
works to existing privately-owned houses and apartments
new private houses.
Commercial Work
alterations and extensions to existing commercial buildings
small housing developments
doctors’ surgeries
shops
private schools
stables and farm buildings
restaurants
galleries
offices and studios
interiors
exhibition stands
buy-to-let properties or domestic rental properties
housing Association projects
work on existing churches including Grade I - or II - listed churches
work as a subconsultant to another firm of architects for a specific project
work for a developer.
Larger projects
Working on large commercial projects, government projects, and Housing Association and local authority projects is possible, but might not be right for the sole practitioner or small practice unless it is set up to do this type of work. There is a risk associated with taking on one large project rather than a few smaller ones: the big job might fall through, and any late payment of fees could cause cashflow problems. You might also have to do some preliminary work for no fee and no guarantee that you will be appointed for the whole project. The methods used for the procurement of consultants usually rule out very small practices on the grounds that they will not have the relevant experience or enough professional indemnity cover, even though a small practice will often have the ability, the resources and the technical skill to do the project.
Work from outside the UK
Working outside the UK is becoming more common, with the increase in digital communication and collaboration, but a small practice should carefully consider whether such a project will be financially viable, especially if there will be a lot of time spent on site. The logistics of building far away from the office become more difficult to manage the smaller the project is. Construction law, and Planning and Building Regulations also vary from one country to another – even between Scotland and England. A good rule of thumb is that the smaller the project, the closer to the office it should be, unless the fee has been carefully calculated to ensure that travel time and any other expenses are covered. Additional professional indemnity (PI) insurance may also be required to cover a project outside the UK.
Other work
Work that can also bring in income and provide an important source of new contacts includes the following:
teaching at architecture schools
lecturing to Part III students
speaking at conferences
principal designer duties under the CDM Regulations (in detail in Part 3).
