Specializing in a particular sector or building typology is a good way for new firms to get a foothold in a crowded marketplace. But being too focused can be dangerous. To hedge the fluctuations of the economy, niche firms can add expertise to their practice.
Spread the Wealth
Based in Venice, Calif., and Hobe Sound, Fla., Hughesumbanhowar Architects founding principal Scott Hughes, AIA, says diversifying locations was an "unexpected business plan." After doing post-graduate work in the 1990s at the Southern California Institute of Architecture in Los Angeles, most of his professional network was contained locally. When family connections created the opportunity to design high-end residential projects in Florida in the early 2000s, Hughes left his comfort zone. With few resources in his new state, Hughes turned back to the L.A. architects he knew to form a remote office to help him handle the workload.
Eventually, Hughes was able to build up his Florida office, which left room for his L.A. colleagues to explore new territory, "[allowing] us to spread our wings in a broader arena than we would have been able to otherwise," he says. The L.A. office is now pursuing public sector and institutional projects in the West, leaving most of the residential work and East Coast projects to the Florida office. "We're able to stretch ourselves and not get caught up in that specialty field that we would have if I did not have the luxury of the West Coast office," he says.
Find a New Partner
A few years after Joshua Zinder, AIA, opened his Princeton, N.J.–based firm, Joshua Zinder Architecture + Design (JZA+D), in 2006, he realized he had gotten himself into an unhealthy business cycle. "We would get busy and then we wouldn't have a lot of work, then I'd scramble to get work, then we'd have a lot of work," he says. "That cycle was stressful, overly challenging, and it wore down not only myself, but even the employees."
In 2010, he took a long-delayed look at his business plan and decided that his firm was too reliant on its work in the hospitality sector. "At that point, the number one thing on my business plan was to find a partner," he says. "Somebody who could share the load and had sympathetic experience, but at the same time could bring in another sector of business that we didn't have."
He found that partner in Marlyn Zucosky, Assoc. AIA, who was leading an interiors department at a larger firm, Trenton, N.J.–based Clarke Caton Hintz (CCH). "Who we marketed to [at CCH] was very different, so I was able to bring a whole new client base to JZA+D," Zucosky says. Now, instead of relying on larger hospitality and residential projects that may come in waves, the firm can bank on more consistent work doing interior fit outs. "It balances out the other work we have," Zinder says.
Global architecture firm DLR Group recently broadened its reach by merging with Washington, D.C.–based Sorg Architects. Griff Davenport, DLR Group's CEO, says Sorg offered an entry into the federal sector and the D.C. market—or more broadly, the eastern seaboard. Even for a firm as large as DLR Group, it made more sense to join a local expert firm than trying to wedge into an unfamiliar market.
Davenport says the merger will be mutually beneficial to both firms, offering them the opportunity to reach into new sectors and geographic regions. "It's much more difficult to go and find a firm that just does more of what you do," he says. "When you can inject each other with the DNA of each other's firms, then you find real growth opportunities not only for the firms but for the professionals who work there."
And though merging can be a quick way to pick up new expertise and access to different markets, Davenport acknowledges that the cultures of the two firms won't automatically blend, and it will take time for things to smooth out. "You have to be patient," he says. "In the case of an acquisition or merger, finding the right partner is so important. It's not a transaction. It's a marriage."