On my next birthday, I will celebrate 49 successful years of surviving my yearly journey around a 1.392 million kilometer ball of hot plasma that burns at a temperature exceeding 10,340°F … more commonly known as the sun. In addition, I have been out of college and in the field of architecture for 24 years, 6 months, and 14 days, and a licensed architect for 14 years, 2 months and 3 days … and this weekend, for the first time ever, I worked on determining the utilization rate of my employees and billing efficiency of the projects that those same employees work on day in and day out.
Can you tell I’ve got numbers on my mind?
So. All weekend working on accounting. I did not like it … but I didn’t hate it either. When I graduated from college with my 5-year professional degree in architecture, I only had three goals, (for the full version, go here – very inspirational) but for those who don’t want to sort through all that, here is the abridged version of those oh-so-important life goals:
It’s been over twenty years since I graduated from UT and if you had asked me then where I thought I would be in twenty years, I don’t think I would have had an answer for you. I only had three goals when I graduated; the first was that I wanted to make $100,000 a year. I chose that number because it seemed outrageous to me at the time, but also because I thought it represented success, which somehow meant that I’d made it. My salary upon graduation turned out to be disappointing $22,000 that year but luckily, things have improved for me in the last two decades. The second goal I had for myself was that I wanted to have a project that I had designed make it into an architectural history book – that’s a lofty goal. In the years after graduating, I amended that goal to simply getting my work published. My third goal was that I wanted to buy a jet ski.
I never did buy that jet ski … in fact, I’ve actually never ridden a jet ski and looking back, I’m not sure why I made that goal. I was able to achieve the other two goals, turns out they weren’t as difficult as I had originally imagined.
So why did I include that previous paragraph? Because “accounting” was not one of my goals. Nowhere in my future did I ever foresee spending my weekend reading financial books and pouring through tax returns and bank statements. I can barely tolerate addition and subtraction so sorting through all the financial data my firm has collected and trying to make sense of it was literally like death from a thousand papercuts. But, I can’t help but acknowledge its importance. This is something that I need to get a handle on and based on my current level of accounting knowledge, I am running an intellectual deficit.
The good news is that we have all the data I need to evaluate where we are and how we can make sure that we are making smart decisions moving forward. When I was coming out of school, I didn’t think owning a firm or running a business … it literally never crossed my mind. Now, those things occupy a large portion of my time. Staffing, cash flow, savings, bonuses, new computers, software license fees … it’s almost paralyzing and it’s easy to either a) ignore it altogether, or b) spend an unhealthy amount of time focused on it. I say “unhealthy” because I don’t really want to be doing it at all and I didn’t go to architecture school to run a business, but here I am.
I like to tell myself that one of the things I am really good at is asking questions. I have collected stacks and stacks of financial data, timesheets, reimbursable expense reports, monthly bank statements, and payroll slips. I have read and reviewed. And then I reviewed and I reread. After waking up from my boredom induced nap, I highlighted figures in yellow, circled entries in red ink, paper-clipped this month of “x” with that month of “y”. After hours and hours of data entry and creating umpteen thousands of excel spreadsheets, I formulated my first question:
“Michelle! Can you come here and help me, please?!”
Which, of course, was the best first question I could have asked because my wife is a lot smarter than I am … and has advanced degrees in Mathematics. Her brain is perfectly optimized to process and organize financial data, so I asked her to help me sort through everything. Within a ridiculously short period of time, she had most of it analyzed and organized … explaining to me what she was doing was the hard part.
But that’s okay. I will get a handle on this because that’s what I do, I learn new stuff and try to make things better. In this case, it’s not design work, and it’s not anything related to the practice of architecture; it’s completely new and unchartered waters for me. My business partner has been at this for almost 25 years and he knows how to do all sorts of financial things that I don’t – but he doesn’t want to do them even more than I don’t want to do them. On the day when he does the billing, everyone in the office hunkers down just a bit lower at their desk and we try to stay out of his way.
Then = Published Architect, enjoying his $100,000+ salary while riding a jet ski.
Now = Part-time accountant/Human Resource and Part-time architect.
Didn’t see that coming … I should have taken some accounting classes.
Today was the 22nd installment of #ArchiTalks – a blogging event with other architects where I provide a word or concept and let them interpret it however they want. The topic was “Then and Now” and the idea was that I wanted all these different architects to tell their story of what they thought they were going to be doing when they graduated versus what they are actually doing – along with all the twists and turns the journey has presented to them. It should make for some interesting reading and give you an idea just how varied the profession of architecture can actually be. If you would like to jump down into this Rabbit’s Hole and read how other architects responded to today’s theme of “Then and Now”, just follow the links below.
Michele Grace Hottel – Michele Grace Hottel, Architect (@mghottel)
then and now
Mark Stephens – Mark Stephens Architects (@architectmark)
#Architalks 22 – Then and now
Matthew Stanfield – FiELD9: architecture (@FiELD9arch)
Where It All Went Right
Marica McKeel – Studio MM (@ArchitectMM)
From Then to Now…Residential Architect
Jeff Echols – Architect Of The Internet (@Jeff_Echols)
Well, How Did I Get Here
Lee Calisti, AIA – Think Architect (@LeeCalisti)
then and now
Mark R. LePage – EntreArchitect (@EntreArchitect)
The Biggest Surprise of My Life as an Architect
Lora Teagarden – L² Design, LLC (@L2DesignLLC)
Then & Now…and the middle
Nicholas Renard – Renard Architecture (@dig-arch)
15 Years of Architecture
Jeremiah Russell, AIA – ROGUE Architecture (@rogue_architect)
then and now: #architalks
Eric T. Faulkner – Rock Talk (@wishingrockhome)
Then-Now: A Schematic Story
Stephen Ramos – BUILDINGS ARE COOL (@sramos_BAC)
Big Ass Buildings
brady ernst – Soapbox Architect (@bradyernstAIA)
Pens & Fizzy Drinks: Or How to Set Measurable Career Goals
Brian Paletz – The Emerging Architect (@bpaletz)
How did I get here?
Michael LaValley – Evolving Architect (@archivalley)
Reflection on My Wonderful, Unexpected Career
Daniel Beck – The Architect’s Checklist (@archchecklist)
Jarod Hall – di’velept (@divelept)
The Joys of Being an Architect
Anthony Richardson – That Architecture Student (@thatarchstudent)
Then and Now
Kyu Young Kim – Palo Alto Design Studio (@sokokyu)
Career Path: Follow Your Heart
Nisha Kandiah – TCDS (@SKRIBBLES_INC)
Then & Now : Still Chasing the Dream
Jim Mehaffey – Yeoman Architect (@jamesmehaffey)
The Reluctant Code Guru
Tim Ung – Journey of an Architect (@timothy_ung)
10 Lessons Learned from a Young Architect
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[…] Bob Borson – Life of An Architect (@bobborson) Then and Now – Architectural Design or Accounting […]
In the firm that I work at my utilization rate is constantly 90% to 95%, any lower and I’m chastised for not being efficient.
Great article Bob. I realize that I must read your website too much because I already knew of your jet ski dream. I have a feeling you will check that box some day also. My firm is big on utilization rates. Everyone in the company has a goal set for them and we have a neat little app that allows us to track it in real time. The numbers can definitely suck the fun out of the job some times. But like Mark LePage says: “Profit than Art!”
Let’s hear it for the smarter better halves – yup that’s me too. I wouldn’t be where I am if it wasn’t for my much smarter (and prettier) partner in business and life.
let’s not leave “tolerant” off that list.
Yup, very, very tolerant 🙂
It’s understandable that during an architecture student’s time in college, they’re usually too busy to take some business classes, but since (and I don’t have time to look the number up right now) a majority of firms fall under the ‘small business’ classification, it really would be beneficial to understand how a business operates. Most smaller firms don’t have the overhead to hire someone to be strictly a business manager/accountant/etc, and that’s why people like Bob have to wear so many hats. At AIA Columbus, we started a “Mastering the Business of Architecture” series last year attempting to shed some light on a lot of these topics for practicing architects and emerging leaders. We’re in our second year of offering it and I think it’s getting more focused, so hopefully, fewer principals and managers feel so overwhelmed by trying to understand the operations side of the firm if we can continue to open this sort of discussion up to more people.
yes we have a CFO and that is indispensable with a firm our size. I had no business classes in school yet somehow seem to be able to grasp the principles. the short of it is if you cannot make money you cannot properly serve your clients. Oh, and stay in business too.
maybe it’s time for you and me to have another lunch …
cool. I will contact you to set up something in December.
Back when I had more time to hang out with TSA, I remember some gripe-er, jam sessions, where we pondered just what was _in_ the nearly 200 credit hours an architecture degree represents.
Was mor than a small amount of consensus that we all should have been pushed, by elective, or by stricture of curriculum into at least a couple Small Business classes. Most of the PE’s I know feel similarly–and those worthies are pushed out into the cold with no blanket and a broken plate even earlier than we in Architecture.
I had a boss who fulminated (he was good at fulmination, and well-practiced at the art, too) that “An Architect Who Cannot Estimate Is Nothing But A Decorator!” Mind, there probably a lesson in how CRSS organised their firm and put a lawyer at the helm and let the Architects architect. (Allthough that’s subject to some review.)
Being a small business owner is no easy task, I can tell you from personal experience. Made me wonder if I should have just gotten an Accounting degree instead. Sometimes. But, for those who can, then six-figure salaries can be expected.
Our firm is almost successful in spite of itself. Nobody took any business courses so this has all been trial by fire. The good news is that my partner – the one who has been at this for a long time – doesn’t make many stupid mistakes. What we are missing out on is the lose revenue that would be available if we put ourselves in a position to recognize those opportunities and then act upon them.
I think that’s the real trick to finding financial success.
1. Weld Coxe ‘Managing Architectural and Engineering Practice’ – long out of print but available for next to nothing on Amazon. 2. Buy and implement a Management Information System – many available to suit small practice. 3. Have a Partner’s Management Meeting once a month to see how you are tracking. For one day a month stop being architects, be business owners instead.
I’ll check that book out – add it to my “growing” collection. I recently bought “Financial Management for the Design Professional” and found it painful, but helpful, to read.
It seems pretty reasonable to be “business owners” at least one day a month.
Cheers
Great topic. Many years ago, I wasn’t much interested in “bean counting” either. However once I had a real stake in my company, I seemed to start enjoying that side of things more and more. I’m on the construction side, not an architect, but every 6 months or so I seem to get obsessed with every facet of how my company works, drilling down deep into adding up every receipt, every hour, every mile, every thought process, in order to get a clear picture of what each job actually costs. At first, the results were quite disturbing, but over time that database of knowledge gets larger and larger, and my ability to find weaknesses in the bottom line gets better and better. The result of all that optimizing can result in money found for a new tool, or a new computer, or maybe one months facility rent, or maybe over time a new work vehicle, or even enough to hire another worker.
That seems to be the catalyst for many people – once they have a stake in the company. I suppose that would account for so many “employee owned” companies doing so well – everybody cares about the bottom line.
This seems to be the consensus among people who have an opinion. You have to have some skill at business side of things if you really want to take advantage of the design side of things. It’s been a while since I checked the curriculum at my alma mater so maybe things have changed, but business courses (beyond the typical professional practice course that seems so ubiquitous these days) should be encouraged.
Bob, loved the post. Do you think that as you’ve gained more experience over your career that you’ve been naturally pushed toward the ‘business’ side of the practice? Or do you think that it just comes with the territory of owning a business in general?
There’s no question that I’ve gained experience over time if by no other reason than I’ve been around the conversations. Now that it has a direct impact on me, I can’t be passive about it anymore. It’s a necessary evolution to the practice of architecture if you are somehow associated with a small practice.
As an architect and an owner representative for a large government organization – I routinely find that Architects are notoriously bad at sending us their progress billing. For my org predicting project cash-flow accurately is important and architects have to be routinely reminded to bill us!! Engineers are significantly better at this, though also far from perfect. I understand that Architecture schools are not where you go to learn the practise of architectural business. but considering most architects usually want to someday start their own firm… that is rather self defeating for the profession. its not something an intern will learn at their jobs, since the finances are always guarded secretly (perhaps with good reason). what are your thoughts? Should the practise of business not be part of architecture schooling or internship in some formalized way??
it should definitely be included – I doubt you would ever hear something to the contrary from someone who is actually in practice. In my office, we don’t have an issue with billing, and I’m not sure that my partner would think that we are doing a poor job of financial management. What we struggle is that we don’t really do anything will the mountains of information we have available to us and as a result, we can be slow to react to how things are evolving in the office. Things like utilization and the realized cost/benefits of some of the things we offer are not studied. We don’t ask people to work overtime, we pay for just about everything (AIA, conventions, charitable causes, etc.) without ever really evaluating the true impact to the firm’s resources. Our motto is that we try to do what we think is right without considering if it’s actually the financially responsible thing to do. So far everything has worked out, but the firm is growing and we need to make sure that we are prepared for what’s to come.
So, with this newfound knowledge – do you think business courses should be required for architecture degrees?
even without this newfound knowledge, I thought business courses should be included in our curriculum. Considering the statistics that supports that most practicing architects will be in small architectural firms, this seems like an imperative for our industry’s preservation.