ARCH591

BUSINESS MANAGEMENT
APPLICATION FOR
ARCHITECTURE 1
Ar. Francisco P. Epe, mba
Introduction.
I ‘m an Architect, and like most Architect I’m
not a businessman by nature.
So why am I teaching ARCH591? My answer is
simple. I want to share my experiences to new
and future Architects who are starting their
niche in the business of Architecture.
I want to impart the basic knowledge in starting
a business I did 20 years back and provide the
insights in the government-mandated
reportorial requirements. These are based on
the new Tax Reform for Acceleration and
Inclusion (or TRAIN) Law.
My motivation is for awareness of our basic
responsibility when doing business especially
in the practice of Architecture.
It’s important for us to be honest in all our
business ventures because God will bless us
even more if we are faithful to our clients and
to our government.
Apart from being a registered and licensed
Architect, I took up and finished Master’s degree
in Business Administration in 2013 to further
equip my design & build business I founded in
2002.
Through the years, we have over a hundred
projects ranging from residential, commercial,
industrial, interior fit-outs, etc.
Gained accreditation from companies such as
LBC Express, Triumph International, Pru Life UK,
Phinma Properties, PNB, Multi-line Structures
among others.
Most of newbies working life was spent in a
conventional 8am – 5pm most often.

Work for an Architect and rewarded for loyalty

every two weeks with a paycheck. It felt like a
stable existence.
Still, you may long for something different and
wanted your own practice.
But that was an idea reserved for an
indeterminate time far in the future, a time
when there was plenty of work and when you
are ready.
An idea that is kept secret as it will require time
and involved risk.
Of course, the next year would arrive, salary may
be slightly higher, my children would be one year
closer to college, and I’d be committed to
another design project in the office that I’d want
to see finished.
Does this sound familiar? Are you this architect
or designer?
In early 2000, my dream job designing high-end
homes & buildings was facing uncertain times.
My employer had cut office salaries by 20% and
gave us the choice of pursuing outside work.
I knew this was my chance to get started building
something I could call my own and a business
capable of supporting my family.
The process of designing architecture, working
with clients and building buildings, that was
familiar territory.
I knew I could do the work, but at the time I knew
next to nothing about operating a business.
So I read. I began with the UAP (United
Architects of the Philippines) “The Handbook
for Professional Practice.”
But they seemed to describe a historic past.
I was looking for a handbook I could reference
when I had a question.
I turned to online resources, blogs, forums and
articles and found a group of young professionals
grappling with the same problems.
The information I discovered there was timely and
based on real experiences.
These were individuals designing practices like I was
– from nothing – and succeeding.
I read case studies, listened to podcasts,
corresponded with pros who made the leap
before me, studied business plans, made lists,
sketched out weighted average decision matrices,
pondered, and researched some more.
Every time I found new information I felt as
though I had just scraped the surface of what was
available.
I had so much more to learn.
Reading and researching about how to open a design
practice is a necessary part of the process.
Following others who have built successful
businesses too.
But as I look back, I can tell you that there’s just no
substitute for that important first leap.
Reading about it can be reassuring, but
stepping out is required.
One can’t possibly know all the questions one
needs to ask when sitting in the relative
comfort of a salaried job.
The experience of sole practice has taught me what
no amount of research ever could have.
The truth is there’s nothing you can do to escape the
labor in front of you when you set out on your own.
Building a business is hard work.
You’re investing in an unknown asset, giving it
form; shaping it from nothing.
Crafting a brand and a business to support
you will probably count among the most
difficult things you’ve done in your life; it will
also be one of the most rewarding.
Opening your own practice offers more job security
than any other job could ever provide.
This might seem counterintuitive, but remember
your current job is subject to change at any
moment.
If your employer told you that your salary has
been reduced by 20% effective tomorrow,
would you have any say?
Your own business, by contrast, is something
no one can ever take from you.
It’s yours, you own it, and you chart the
course.
When you work for someone else they control
your time and your future, the type of work you’ll
do, and what you’ll be paid in exchange for that
work.
It comes at a cost though; hard work, persistence,
and much anxiety.
In the early stages accepting these as part of doing
business will be challenging.
You’ll be excited to begin designing, everything will
be new and shiny and as your excitement is peaking
no one else will be listening (except your close
friends and family).
There are many ways to practice your craft today;
begin to think like an entrepreneur and you’ll see
opportunity everywhere.
It’s possible to build a life and practice that rewards
your individual talents and skills.
If you choose, it can be a life that doesn’t trade time
or hours worked for Pesos.
There are simple barriers can be cleverly used
as an excuse - a red light - for not progressing.
Opening your design practice doesn’t require
all the lights to be green.
It all starts with action.
1| Mindset

“If you really want to do something, you'll find a

way. If you don't, you'll find an excuse.”– Jim
Rohn
Starting your own design practice is like this too.
As is often the case, many simple steps taken
together coalesce into a great deal of work.
Do you need to own the firm to enjoy practicing
architecture or interior design?
Maybe not.
To determine whether you’re mentally ready
for the work ahead, establishing the proper
mindset is your first task.
CEO and Architect.
Deciding to open your own design practice requires
a fundamental shift in attitude toward the making
of architecture.
You’re a business owner first.
To survive in the long-term a business’ expenses
must be lower than their assets.
It’s that simple.
You must prioritize learning to be a
businessperson over being an architect.
This is especially crucial when you’re staking
your claim and building your reputation.
This isn’t to say that everything you love about
architecture has to be packed up and traded away
when you assume the role as CEO of your business.
It just means that design will have a different place
in your operations and occasionally, it may even
defer to your business decisions.
Not long after opening my practice I was
approached by a potential client.
Like me, he had a young family, he wanted a small
home and of course he had an even smaller
budget.
I could relate to his position, I had been in that
exact spot a few years earlier.
I wanted to help him design his home; it was an
interesting project and small is what I do well.
But it quickly became clear that he was approaching
many architects for a chance at an extremely small fee.
I quoted him a price and proposed a fee that would’ve
allowed me to remain profitable and I suggested that
given his budget he needed me even more.
I never heard from him again.
Just because I love designing small homes doesn’t
mean I can do it for free and small projects with
small budgets are just as much, if not more, work
than the larger ones.
In that situation I prioritized business over
design and I’m glad I did, because it left room
on my boards for the next project, one more
aligned with the value that I offer.
And there’s always a next project.
I won’t always accept jobs based on profitability but
I want the flexibility to be selective.
Imagine if every project I accepted had a razor thin
margin of profitability.
It’s the worst possible position to be in, always
behind, always struggling, with no room for error.
Prioritizing profitability builds in flexibility to your
operations.
It allows you to carefully consider and accept only
those unprofitable projects that have the most
impact -- in your community, in your business --
wherever you decide.
This is the kind of mindset you’ll have to adopt if
you’re to take seriously the step of starting your
design practice.
Amateur versus Professional.
I started my business moonlighting while working
at another firm.
Like many other architects, I treated this work
more as a hobby than a business.
I was a professional treating my side work as an
amateur and consequently, there was very little
financially at stake.
If a client put a project on hold indefinitely it
only meant that some of my discretionary
income went down; it didn’t mean I couldn’t
afford my utility bill.
There’s an important distinction between
practicing your craft as an amateur and doing it as
a professional.
Because there’s nothing at stake, the amateur isn’t
committed to long-term success, only short-term
gains.
Professionals are invested in success and have a
long-term plan for making it happen. Perhaps
most importantly, the professional realizes that
every action has real, legal implications.
It’s an intimidating thought but your professional
reputation is built on the each one of these
actions.
When you’re an amateur, the grey areas of practice
will consistently challenge you.
The amateur treats earnings from a moonlighting
job as “spending money” ignoring the quarterly tax
due.
Clients will ask that you look the other way and
ignore the building code offering, “no one will
know.”
Grey areas are for amateurs; the professional
is unflinching and decisive in their
commitment to always follow the rules.
Which reputation would you prefer to have?
You can’t afford to do favors or look the other
way; it’s your professional reputation and our
profession at stake.
You have a legal professional obligation to uphold.
It’s one that you agreed to when you became a
licensed professional.
You have a duty to serve and protect the public.
If you encounter situations where these things are
required of you simply walk away.
Being a pro also requires committing the necessary
time and effort to running your business
professionally.
There’s a lot more to running a design practice than
design.
You’ll probably spend fewer hours designing than
ever before when you open your own business.
There’s marketing, invoicing, closing deals,
clients to meet, contractors asking questions,
consultants to coordinate, site visits, phone
calls to take and make, e-mails to answer, and
letters to write.
These things take time and usually that’s time
taken away from design duties.
Unfortunately, assuming a professional role means
that the time spent designing architecture is more
limited.
If you’re the kind of person who needs large doses of
daily design time, opening your own business isn’t the
best way to get your fix.
You’re probably better off working as an employee
in a firm that prioritizes design and can secure the
projects you’ll design.
You’ll be busy running the business first: invoicing,
marketing, paying bills, doing taxes, ordering office
supplies, finishing the drawings for your current
project, writing meeting notes.
Professional status carries with it a
responsibility to represent all architects well.
Serve your client’s needs, orchestrate solutions,
seek adequate compensation for the value you
bring and do good work.
You owe it to your colleagues to uphold the high
standards of the profession.
When you’re working for someone else they
carry that mantle – when you step out on
your own, you carry it.
When you can commit to being a professional
rather than an amateur, you’re ready to tackle
the next mindset problem.