Writing a Business Plan for an Architectural Firm
Architecture is no longer just a profession.
With increasing competition, it is vital for an architect to survive as well as win over the market. And thus, I call architecture not just a profession but a professional business! And every business needs a business plan! A business plan is a written document showing you your thoughts on what, where, why, when and how you intend to manage your business. If you are a person with many resources or you are one without any; just like a soldier who enters the battlefield with loaded equipments, you too must put your thoughts, strength, and acquired skills on paper before entering into the field.
Zacharakis, a professor of entrepreneurship at Babson College, explains:
"The business plan helps the entrepreneur shape his/ her original vision into a better opportunity by raising critical questions, researching answers for those questions, and then answering them."
There are many reasons for writing a business plan. You may want to convinve yourself that the new venture is an effort worth pursuing, before making a significant financial and personal commitment. It may be useful to the management team for goal-setting and long-range planning. It may be a tool to attract investors and get financing. It may be used to find partners and associates. It may serve as a guidance to find and retain employees. A business plan can help an entrepreneur to allocate resources appropriately, handle unexpected problems, and make good business decisions.
The first step to business planning is to DREAM. Dream of starting your own firm. And then, backup dreams with actions.
Understand that you will need money, support, guidance, contacts and many more tools. I have tried to bring together a 10-step guide to what you should include in your business plan:
Introduction is an opening statement to communicate with with investors, potential clients, future employees and well wishers. It shall include your mission, vision and values.
2. A brief note about the company’s origin:
Write about the idea behind the company's creation and how you or your business associates came up with the idea to start your business.
3. Your company's goals:
Explain your short and long-term goals for the company in few paragraphs. Address the questions like 'How fast do you think your company will grow?' or 'Who will be your primary customers?'
4. Biographies of the management team:
The management section should include the names and backgrounds of leading members of the management team and their respective responsibilities.
5. The service or product you plan to offer:
A key aspect of this section will be a discussion of how your product or service differs from everything else on the market. Carefully write your USP – Unique Selling Point.
6. SWOT analysis:
Write about your Strength, Weakness, Opportunities and Threats. Be open and honest. It involves specifying the objective of the business venture or project. Identify the internal and external factors that are favorable and unfavorable to achieving that objective
7. The market potential for your services:
With required research and analysis, find out the no of clients, location / region, market size (no of clients) to whom you will be able offer your services. Remember that you have to convince financiers, potential clients and employees about your potential to carry out the services successfully.
8. A marketing strategy:
How do you plan to tell the world that you're open for business? Will you rely exclusively on word of mouth (not a good plan unless you've already got a reputation)? Will you advertise in print, television or on the Web (or all three)? Will you use online services to get your company listed on search engines and advertised on other Web sites? Write about your marketing strategy suitable to the services you plan to offer. Also make a plan about your need vs. capacity to spend on marketing.
9. A two to three years financial projection:
This section should include a summary of your financial forecasts with documents showing the formula you used to derive them. You may require balance sheets, income statements and cash-flow projections for the entire forecast period. The summary in this section shall be able to tell prospective lenders about the amount of money you'd like to borrow. The assumptions that you make in this section will make or break your company's success! Thus, if you're unsure about using this kind of financial modeling then it may be a good idea to consult chartered accountants, seniors, or well wishers who can guide you. It's worth the efforts. You can read and understand more about the basic financial skills an architect require at: Financial Management for Architects
10. An exit plan:
There may be many reasons why you may like to close your business. Financial loss, loss of interest in the practice or other personal reasons may be some of them. You must take this step positively and plan it gracefully. You are into a business and money is in the centre of any business. Thus, you shall plan and indicate how valuable your business is and will it be possible to transfer to other aspirants with goodwill? In case of a loss, write your backup plan for clearing your liabilities when you exit. This step will not frustrate you or discourage you when you say good bye.
“No dream comes true until you wake up and go to work.” If you are an ambitious architect, begin to work upon your dream of starting your own business today. Start drafting your business plan today. I have created a sample business plan for a typical architectural firm. This template will help you get started with your own business plan and customize it for your own needs.
Download this sample business plan with our E-Book: Business Planning for Architects