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7 Tips for Starting an Architecture Firm - Tip 03: Get Advice

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This post is part of the How to Start an Architecture Firm series.

In February 2006, the three of us went to work on forming our own architecture firm. The following is tip number three of seven in our start-up strategy.

Tip 03: Get Advice

Architects get advice

photo credit

 

After nearly four years in business, I can say with great certainty that we wouldn't have survived more than a year without getting great advice from some key people. 

Asking for advice is easy. People love to give advice and share their success stories.

Our advice came from the following four groups:

1. Family

Aside from getting your family on board with the idea of you going out on your own, you should also get their advice. There's a good chance that at least one person in your family has started their own business.

2. Friends

While we received great business advice from many of our friends, there are two in particular that stand out:

Sam

Sam is an entrepreneur. The three of us went to USC with Sam. And while we were drawing and building models over in architecture school, Sam was in business school learning to be an entrepreneur. Actually, Sam had always been an entrepreneur. It's in his blood. There's a rumor that as a child, he outsourced his chores to other kids in the neighborhood, maintaining a cut for himself. When his Mom found out, she was too proud to punish him.

architects entrepreneurship advice Sam will likely kill me for profiling him on our blog.

By the time we formed Modative, Sam was on his third business start-up. He advised us to be cheap (see Tip 01)  and to do much of the start-up work ourselves (see Tip 02), such as forming our own corporation. Sam also got us started on internet advertising years before the bulk of the architecture industry caught on.

The fact that Sam is not an architect was actually an asset. He taught us to question norms within the industry. Sam continues to push us today. 


Jon

Jon is another good friend from USC. Jon is a lawyer. He lives in Northern California.

While in Tip 02: DIY, I recommended to avoid hiring a lawyer, as our business grew, we found ourselves needing legal advice on contracts and other minor items. Instead of hiring an attorney, we've asked Jon for advice. In return for his help, he always has a place to stay when he frequently visits Los Angeles. And when the time comes for Jon to build his own house, he'll cash in all those favors.

If you'd like Jon to be your lawyer, he can be found here - Tingley Piontkowski LLP

Jon will probably also be less than pleased that I've profiled him on our blog. Now we'll need a new lawyer friend to defend us in a lawsuit from our first lawyer friend.

 

architects advice friends

3. Network

Guessing and gut instinct are not good business strategies. Finding an expert or someone who's been there before will dramatically increase your rate of success. Beyond your family and close friends, there's a network of people that can help you with just about anything.

Need advice on web design? Chances are you know, or your friends know, someone that is a master web designer.

4. Competitors

Overall, I would say that the architecture industry is pretty amicable. Advice flows freely. We used this to our advantage early on, meeting with established architects that would later become our competitors. The idea was not to steal from them, but to learn from them.

Since then, we've met with numerous younger professionals trying to start their own firms. We share with them (and now you) like other firms shared with us, knowing full well that they might become our competitors in the future. A full circle of idea sharing.


Stay tuned over the next several weeks as we fill in the last four tips of our 7 Tips for Starting an Architecture Firm.

los angeles modern architecture firm

7 Tips for Starting an Architecture Firm

00 architect firm

00 Bootstrapping

Not a tip, but a critical theme in our start-up adventure.

posted 12.03.09

01 architect firm

01 Be Cheap

posted 12.08.09

02 architect firm

02 DIY (Do It Yourself)

posted 12.18.09 

 
03 architect firm

03 Get Advice

posted 12.22.09

04 architect firm

04 Learn from the Bad

posted 01.22.10  

05 architect firm

05 Start and Stay Small

posted 03.03.10 

06 architect firm

06 ___________________________

07 architect firm

07 ___________________________

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Comments

Great job guys! perhaps we can be a resource if you need somebody in Florida.
Posted @ Friday, December 25, 2009 9:32 AM by Carlos
I co-founded an architectural firm in 1984, merged it in 1985 and sold it in 1999.  
 
The most important tool when starting a business (particularly if you have partners) is a transition plan. Having been involved in two previous architectural firms, I learned that the most important document for a new business next to a business plan is the Buy-Sell Agreement. 
 
My three partners and I spent two years researching and writing our Buy-Sell Agreement -- 15 years later when it was implemented, it made life easier, but not problem free.  
 
We made one mistake in our buy-sell agreement that caused me to take legal action against my former business associates. The mistake was not identifying the funding source for an internal buyout.  
 
If I had to do it again I would clearly spell out that a stock buyout that should be funded through a third party. That allows the departing stockholder to move on with his/her life and allows the business to focus on business rather than spend valuable time and money in expensive litigation. 
 
So my advice, for a new architectural firm is to have a Buy-Sell Agreement in addition to a Business Plan.  
 
Also knowing what I know today, I would not start a traditional architectural services firm. As an architect I think it is better to use our design abilities to design & build and sell a product rather than design services. 
Posted @ Friday, December 25, 2009 5:52 PM by Carlos Ruiz
Carlos, 
 
Great advice! At Modative we did set up a Buy-Sell Agreement when we started our firm. I actually touched on this in Tip 2 - DIY in this series. 
 
However, it's probably not a bad idea to revisit that Buy-Sell Agreement from time to time to see if everyone still agrees with its parameters. 
 
-Derek...
Posted @ Thursday, January 07, 2010 1:03 PM by Derek Leavitt
Hi Derek, 
 
From personal experience having negotiated and executed a Buy-Sell Agreement, I would not suggest to anyone to modify a BSA once it is ratified by the stockholders. That will set a precedence that could lead to conflict and the loss of the firm and everyone's investment when someone wants to transact their shares.  
 
 
 
However you should annually establish a new share price based on a stock price formula contained in the BSA. In our case it was based on the mid-fiscal year--we would establish a new value of the shares. If anyone transacted during the next 12 months, that would be the value of the shares.  
 
 
 
There is no perfect way of establishing the value of a service organization for internal transactions. So whatever is agreed by shareholders, that is the formula.  
 
 
 
A BSA that is negotiated when no one is thinking of transacting shares does not have a unique agenda. Points of view will change with personal conditions and that usually leads to conflicts in a business. The purpose of a BSA is to preserve the business and allow a stockholder to leave while minimizing the impact to the remaining firm.
Posted @ Friday, January 08, 2010 5:42 AM by Carlos Ruiz
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