Wednesday, November 10, 2010

Cash Flow- Invoices

Cash flow is  very critical to the financial health of any business. Make sure you collect payments from your clients promptly.
  • Your invoices to client should be simple and easy to understand.
  • Call them right after you send out the invoices to make sure they have received it.  
  • You should start charging a late fee if you don't receieve the payment within  7 days, 2 weeks or 30 days after sending out the invoices. The amount of late fee should be stipulated on your original contract. 
  • You should charge a fee for all returned checks.
  • All work should stop until clients are current with their payments.
  • Put a lien on your client's project if he/she still refuse to pay.     

Wednesday, October 13, 2010

Consultant's fee Mark Up

For any project, if you carry a consultant, you need to mark up at least 10% to 20% of the consultant's fee. There are administrative cost and risk to carry any consultants so make sure you get compensated.

If your clients  require you to coodinate with their consultants. You need to charged them a flat or hourly fee to deal with them . Personaly I will charge by hour or a flat fee for not to exceed a certain # of meeting.

Sunday, August 08, 2010


Whenever your hear your clients say "EVERYTHING", right away you need to write down  your "EVERYTHING" list  and compare with theirs.

When your consultants or employee say "EVERYTHING" is done you need to do the same thing.

Anything that is not well defined should not be in the "EVERYTHING" list. Toss it out to avoid misunderstanding.

Friday, August 06, 2010

Anti Trust Laws

Anti trust laws forbid architects to compare or discuss fees.
So the design fees are all over the spectrum. From patheticaly low to astronomical high. 
99 % of the clients are walking around shopping  for the cheapest architects.
Regardless of their skills, architecture services are reduced to commodity.
Clients have all the numbers and architects are in a fog, reducing or increasing fees on a whim without a clear understanding of profit and loss.
That is one reason architecture is not  a profitable enterprise.
We don't know the real cost of doing business anymore.
The clients are holding all the cards.


How much can you trust the information on any AS BUILT drawings or documents your clients handed to you for reference ? It could be 99 % or  0.9  % accurate. How about all the things that cannot be seen ? Things hiddened under the slab, ceiling or walls. Do you have a fee structure to deal with all those unknown issues ? Have you explained them to your clients ?
How much time do you need to verify without taking down wall , opening up floor slab or move 10 tons of  boxes?
Ok the bottom line is you need to know how to charge and deal with all the unknowns before you start the project . You need to let your clients agreed to all these potential charges before you sign the contract with the clients. Or you should just walk away.

Wednesday, August 04, 2010

Good Deals-Discounts

Can you really afford to give your client a discount ? Selling a service is not like selling a car or a chair where most of the costs of products are known. A service is almost open ended, unless you can specify very tighly in your contract/proposal. I think we should only give discount to a well defined scope. In order to get the discount the client needs to play a part like for example paying cash ahead of the project . 

For Example:

Scope:  Preliminary Planning Research for a restaurant

Senior architect: 6 hours @ $120 per hour 
Junior Architect: 2 hours @ $80 per hour
Adminstration: 2 hours @$60 per hour.

Drafting: To be determined if required.  Drafting @ $40 per hour
Printing to be billed at cost if paid within 7 days

Proposed Time : 10 hours
Total: $1000 
10% discount if all are paid up front.

So if the client wants to save $100. Ask them to pay up front. If not , break down into 2 payments the most for a small scope like this one.

A discount is not free. It should be in exchange of something that is valuable to your firm.

Sunday, August 01, 2010

Other People's Business

Architecture practices in general are about other people's business. We wait for other people  to call us when they need a new house, a new mall, or a new township. I think we should not rely on other people to sort out our business and future. We should be a builder/banker/ developer/architect all in one.

Friday, July 16, 2010

Negotiation with clients

  • Average architects typically are not  negotiating from position of  strength.
  • If you have too much to lose, walk away from the negotiating table.
  • Don't agree to anything that seems good currently. Always think long term.
  • If you agree too fast ,too soon, you will look weak to the client. Don't be desperate.

Thursday, June 10, 2010

Scope of works

If the architect and the client are both very experience, the scope of works can be defined in detail without much  explaining.
If the client is not very experience in the total scope and its various ramifications, the architect needs to take the time to explain to avoid misunderstandings.
If the architect has not enough experience, he/she needs to tell the client  to look for another architect  or bring in additional experienced consultants to help.  

Sunday, May 30, 2010

Wealth Guide

Phil Ruffin ( not an architect of course) turned  $20 million  to $1.2 Billion.

Dennis Felix's Wealth Guide

Thursday, May 27, 2010

Architect Vs Client

What makes a project successful ? The architect’s ( + his/her consultant team) skill, judgement and experience is 50% of it . The other 50% is the client's  project experience, intellect and budget.


Thursday, May 13, 2010

Dr Garry's insights into the profession

Interesting insights into the professoin and the training/conditioning of architects.

Thursday, February 18, 2010

Bad Clients

It took a few projects to teach me to stay away from bad clients.
So before signing up any project , I advise you to spend a few minutes, hours or days  talking to your potential clients and get to know them .If you see the following signs you might want  not to work with them.

These are the few bad signs:
1-Bargaining dollars and cents with you right from the beginning.
2-No experience in dealing with architects, contractors or building projects.
3-Unrealistic schedule.
4-Unrealistic budgets.
5-Very high expectation. Expecting perfection,but has no real budget to support it.
6-Cannot really define what they want or expect.
7-Mentally unstable, easily stressed out.
8-Check or call you every 30 minutes.
10-Ask you for discount. Tell you there will be future projects.
11-Bad mouth about other architects.
12-Bad credit ( yes you need to check their credit histroy)
13-Expect you to guarantee the work.
14-Playing good cop and bad cop games with you.
15-Knows someone in City Hall who can expedite things.
17-Don't trust your judgement

If you have any bad client stories , please share.

Thursday, February 11, 2010

Architect As Developer

I think the best way for architect to gain control over design, reponsibility and making profits is by a being a developer/builder. Without it all we ended up with is a set of documents which the clients wants to pay zero for it and their lawyers can find all kinds of issues with it. 
There are many successful and rich architect/builders. The top 4 that came to mind over here at USA are :
John Portman (
David Hovey
Jonathan Segal.
Isadore Sharp ( Canadian)