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"THE CREDENTIAL"
October 2022
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Resiliency For Architecture Firms
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Going virtual has been a consistent theme of the past two-and-a-half years. However, Peter S. Macrae, AIA, NCARB, Principal of Macrae ARCHitecture, LLC has been executing and perfecting a virtual architectural practice model since 2011. As we enter a tenuous market with interest rates rising, recession looming and the potential for building projects to be sharply reined in, he describes how his model is resilient in good and bad economic times. |
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I own a national architectural practice near Columbus, Ohio. We're located just inside the beltway, within the northern suburban City of Worthington. I'm going to introduce you to the origin and current manifestation of my virtual architectual practice model.
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Our firm is a thriving, high-production design firm that delivers architecture, interior and graphic design, as well as project management and 3 D modeling services to clients in commercial, residential, and institutional markets. And I remain its only employee.
After the Great Recession, I had a thought:
If necessity is the mother of invention, this model may just be its offspring. |
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My career path was relatively traditional for 30-plus years. That all changed in 2011, when to start my own practice, I parted ways with my previous company (where I had served as President and Partner) after it was ravaged by the Great Recession. My goal was to start a firm without any seed cash. I thought it possible to have a full-service, national architecture practice with zero fixed overhead...No rent. No equipment. No payroll. Just a laptop, with everything located in the cloud. And it has worked like a charm. |
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I was 58 years old when I had the idea of practicing architecture virtually, but even in 2011, I suspected that all of the tools necessary to work in this fashion were readily available for free online, such as Go-To-Meeting, Skype, Dropbox, WeTransfer, ShareFile, etc...and now the hero of the COVID-19 crisis, Zoom. |
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The first thing I did was talk to my attorney and accountant. Having 38 state licenses through my NCARB Certification certainly was a huge asset. After establishing the legal and financial foundation, I then set out to collect a flexible and talented staff. So, I set up a small office in my home with a laptop and wi-fi connection. |
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In building my firm, of independent consultants, I had a ready-made talent pool composed of good employees that my firm had laid off as it dwindled after the recession, from approximately 20 people down to 6 people (4 partners and only 2 staff, which was totally unsustainable). Two years after starting the practice the pool of potential participants increased with the passing of the Affordable Care Act, lifting the worry of high healthcare premiums for our contractors |
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The entire practice is cloud-based; therefore, we do not have to buy and maintain servers, expensive programs, or equipment. Its' all paperless, stored and retrieved virtually. I can complete most of my work with a cellphone or laptop, and we use a local print shop to process, sign/seal, and overnight ship drawings. |
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Identifying skills for a virtual project team |
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But the virtual architectural practice model is much more than "working remotely," my collaborators are all independent consultants. The architectural project team selection is driven by the project's unique requirements for talent in design, project management, CADD, etc. I treated virtual architectual practice as a design problem and began to think of the firm model as being drammatically similar to the World Wide Web, with its many nodes and uber-connectivity. And because I had led large corportate practices in the past, I had led large corporate practices in the past, I treated my virtual firm the same, only now my available collaborative talent was limitless. |
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Surprisingly, the new company only took one full week to establish. Everyone knows that in today's world, the most important first step is to acquire the domain name for the firm. In my case, an inexpensive visit to Go-Daddy. Then it was on my attorney to set up the company with the state and to secure a federal tax ID number. We chose a Limited Liability Company, an LLC structure. A quick call to my insurance carrier got the firm covered for errors and omissions as well as liability. Not knowing how well the nearly "no fixed overhead idea" was going to work, it was off to the bank to deposit start-up funds (which, by the way, I have never touched. Why? Because we were profitable from day one). |
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Then the stop I most dreaded, the accountant: not because he isn't a talented, great guy, but because I have never been the Accounting Principal responsible for bookkeeping in any or my previous companies. He smiled at me and asked, "Can you maintain Excel spreadsheets for deposits and expenses?" I said, "Sure." So he asked me to just print a .pdf file snapshot of each of these spreadsheets at the end of every quarter and he would shoot me the necessary paperwork for quarterly tax filing. And finally, the zinger: he told me to buy QuickBooks As I shivered and asked why, he laughed and said merely to be able to create a professional-looking invoice---and amazingly, the accounting for my firm has worked just that simple for over nine years. |
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Creating a stable cash flow |
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As with all businesses, cash flow is king. Most successful businesses find ways to establish a constant, reliable influx of income and I wanted to discern ways to achieve this in a national architectural practice. So, what might be "architectural cash flow work?" Well in our case, it ended up being a combination of retail and & restaurant/prototype roll-out work as well as design/build tenant improvements--all work that required little marketing and principal management. A stable of dependable cash flow work combined with strong financial discipline allows the company to operate just fine without ever acquiring a line of credit from a bank. |
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Today, our company is composed of six teams, five of which are each headed by a mid-career professional, and these team members are located in four different states and five different cities. |
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- Teams One through Four serve national restaurant accounts.
- Team Five does interior T/I work for corporate regional headquarters on behalf of a large international conglomerate.
- Team Six does one-of-a-kind projects for a variety of clients and building types.
- I personally manage this team. Why? Because I can and it's the fun stuff!
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Flexible work arrangements |
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There are no employees. All collaborators are independent contractors who I have mentored to establish their own businesses, contracted by me, in similar fashion to the engineering consultants. So unintentionally, my virtual architectural practice model has become (as coined by the NCARB about our practice)
"an incubator of solopreneurs." |
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Each participant (project manager, interior designer, CADD technician, etc.) performs the task that they have declared they both do best and enjoy the best and are not placed in positions to perform work for which they are not suited, just because they happen to be "on the payroll". This has proven to be a great benefit to our clients, because they get role-fulfillment experts comprising their teams, and I also get to perform the project and corporate tasks that I personally perform the best and enjoy the best.
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The virtual architectural practice model is ideal for Millennial and Gen Z professionals who prefer flexible work arrangements, allowing for a healthy work-life balance where parents can raise children while working from home and the recreational-minded can go for a hike or a swim in the middle of the day. The model also addresses issues of gender equality and pay equity in that my collaborator's individual fees are negotiated and contracted for on a project-by-project basis. |
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I know that I'm not saying anything new to most of you...but with today's social networking, it's just not that hard to be found, So, by embracing a social media mindset, I do virtual networking and blog posting at flexible times and amazingly, I have not had to do any traditional marketing for nearly a decade since initiating our virtual practice---we've gone "viral." And don't think we are limited to small projects: we have collaborated on projects as large as 30 million dollars. |
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Running a remote practice |
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Soon after establishing the practice, I experimented to see if I could successfully run my virtual practice remotely. My wife and I decided that our 60's were going to be our travel decade. So, we tested the idea by traveling the globe while my wife allowed me to periodically tap into readily available wi-fi, often while vacationing in far-off locales like Cambodia, or Peru. I never told anybody we were going, and no client or consultant ever noticed that we were gone. |
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Two years ago we gave the model its ultimate test by spending the entire month of January 2020 in New Zealand. While there, I responded to inquiries for new work, submitted proposals, and executed agreements securing projects. I was even able to kick them off successfully. While in the southern hemisphere, I was also digitally signing and sealing the permit sets of other projects utilizing newly available, third party verified software (which I now believe is the permit submission mode of the future). And thus, the big test worked beautifully. |
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My virtual architectural practice is now in its tenth year of existence and I am in my 44th year of the profession. The fact that the model is quite amorphous, growing and shrinking with the market economy like an amoeba, takes away the stress and fear that overhead will ever outpace revenue. Especially comforting, now that we may be entering into another deep recession on the heels of the COVID-19 crisis. This one will be the fourth of my career and the first where the firm I am associated with is simply not at risk of failure. Resiliency indeed! If the projects are there, the talent to perform the work is contracted and brought on board. If not, no one is let go, no one is fired, and no one gets angry. There just are no HR issues.
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Recent sixth team projects have included a new, ground-up Buddhist Temple, the conversion of a Jewish Synagogue into a Hindu Temple, and expanded Administrative Offices and main entry feature for a home of mentally disabled males within an early 1900's Jesuit Seminary. In addition, we are about to assign our 120th job number for 2022. It's been quite a year. |
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So, for me, my virtual architectural practice is not about legacy or having a large market valuation formulated for a future sale of the business, the profits have been enjoyed and invested all along the way. My collaborators have learned how to keep their individual firms profitable, utilizing the same techniques that I use, and I am confident that they will be successful long after my firm ceases to exist. So, when it's over, it's over. And once the firm passes, I will personally choose to remain a lifelong collaborator and mentor for the architeccture profession in a capacity and manifestation yet to be determined. |
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Look: I don't believe that the Virtual Architectural Practice model is the only way that we will manage the business of architecture in the future. There will be many new and creative methodologies developed. And that's the point! Your practice is a design problem. So please remember: out of crisis comes opportunity. Study the projected social changes likely to result once the new normal arrives, then create your response...and jump! |
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What a perfect time for "The Credential" to recognize and celebrate a seasoned small business owner and successful enterpreneur - Peter S. Macrae, AIA, NCARB. We encourage you to "jump" as Peter has stated. Check out this resource: Global Entrepreneurship Week, November 14-20, 2022.
No matter what size your A/E/LA/C firm happens to be, due diligence in terms of business ownership and operation is paramount. The Credential follows important issues like this as part of our comprehensive monitoring of challenges affecting the industry. We stay current with modifications to credentialing requirements in more than 50 jurisdictions allowing you and your firm to focus on what you do best -- design, engineering and construction.
Our credentials management services (individual and business) are exclusively developed for A/E/LA professionals. We offer consistent value and expertise providing you time and cost savings that can be effectively converted to billable project hours. Please contact us at 913-608-7880 for a free consultation session, send us a message, or visit AECredentialing.com
for more detailed information. |
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NOW DELIVERING:
Professional legal services for business credentials compliance including:
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Existing corporate credentials registration compliance review
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Corporate credentials quarterly maintenance
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Corporate credentials documents filing
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Your questions and critical issues will be addressed with quality professional service when you call 913-608-7880.
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Architects:
Jurisdiction License Renewal Due
11/2022
Illinois
12/2022
Alabama, Arizona, Louisiana, Michigan, Missouri,
Nebraska - Last Name First Initial A-K, Nevada, New Mexico, Oregon, Wyoming
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Engineers:
Jurisdiction License Renewal Due Date
11/2022
Illinois -SE
12/2022
Arizona, Georgia, Iowa, Mississippi, Missouri,
Nebraska - Last Name
First Initial L-Z,
New Mexico,
North Carolina,
North Dakota,
Oregon - Last Name
First Initial L-R,
Texas,
West Virginia
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Landscape Architects: Jurisdiction License Renewal Due Date
11/2022
None
12/2022
Alabama, Arizona, Colorado, Georgia,
Kansas - Last Name
First Initial A-L,
Missouri,
Nebraska,
Puerto Rico, Wyoming,
British Columbia
Canada
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If your license renews on your date of birth this month, or by state requirement when your license origination occurred, or any other jurisdiction imposed requirement, it's time to renew.
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Contact us to receive a sample custom monthly
credentials report containing:
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Professional affiliation membership types with renewal dates
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Learn more about our innovative and easy-to-use service at: AECredentialing.com.
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Contact Details:
LS Credentialing Services LLC
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P.O. Box 91
Olathe, KS 66051
Lexi@AECredentialing.com
913-608-7880
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Join us in our efforts to go "green".
Think before you print. |
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