Aside from salaries and benefits to its employees, the largest investments that a firm makes are on its physical office space and the tools it needs to get the job done. Choosing the best and most appropriate setting for a practice can be daunting. So can pouring tens of thousands of dollars into software. But with the right considerations, firms can help ensure that their investments pay off.
It might seem like you’d need a crystal ball to pick the right amount of space for your practice. Given the fluctuations in the market—let alone catastrophic economic meltdowns—it’s almost impossible to predict if your firm will double or dwindle. All you can do is make the most educated guess about the near future. President of the consultancy AEC Management Solutions Herbert M. Cannon suggests negotiating your lease to provide a way out if things change dramatically. “I would be willing to pay a little bit more per square foot or per month in exchange for an option of getting out of the lease early if need be,” he says.
Tip 2: Rent or Buy
Sometimes it might make more sense to buy office space than to rent it. This is especially true if your firm and its practice area are already well established. But Cannon notes that if you decide to buy, you will need to budget for greater costs up front. “Generally, if you own the building, your short-term rent expense is going to be higher,” he says. Renters typically pay about 5 percent of their net revenues on basics like rent and utilities, while owners can expect to pay 7 to 7.5 percent.
Tip 3: Show Your Skills
Architects should use their own offices as examples of the work they can do and as displays of the firm’s skills and principles, according to Lisa Henry, CEO of the strategy consulting firm Greenway Group. “Linking their space to the value of their design is imperative,” she says. But it doesn’t have to—and probably shouldn’t—be an expensive design. “What it has to be is suitable and effective for that business, and to demonstrate for the clients that are coming to see them that they know what they’re doing.” Cannon agrees that the physical look of the firm is important, but advises weighing functionality against a desire to impress. “One of the big mistakes that firms make is investing too much money in interior fit-outs and doing built-ins,” he says. “You’re probably better off doing either a minimalistic approach or using some sort of pre-fab products that you can break down and take with you if you need to move somewhere else.”
Tip 4: Get the Right Tools
Investing in hardware and software should be a staple of your business plan. Most major software programs offer annual license fees, and keeping up with the licenses ensures everyone is using the latest version of the program. Henry tells her clients to think before they license, to ensure that the biggest and best programs are necessary. “You really need to budget that it’s going to be completely replaced every three years,” Cannon says. That may seem drastic, but it’s the cost of doing business—and investing in the future.
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