Executive Summary
Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.
The point of your Executive Summary is to get the reader’s attention quickly. Tell them what kind of architecture firm you run and what its status is. For example, are you a new business, do you have an architecture firm that you want to grow, or do you run an architecture firm in more than one market?
Next, give an overview of each part of your plan that follows. For example, you could give a brief summary of the architecture business. Talk about the kind of architecture firm you run. Detail your direct competitors. Tell us about your ideal customers. Give a brief overview of your marketing plan. Find the important people on your team. And explain what your financial plan is.
Company Analysis
In your company analysis, you will describe the type of architecture firm you are running.
For instance, you might run one of the following types of architecture firms:
- Residential architecture: This kind of architecture firm will focus on designing and building homes. These architects work with homeowners, builders, and developers to design different types of houses.
- Commercial architecture is a type of architecture that focuses on projects for businesses. The most common non-residential building projects are office buildings, but hospitals are a close second.
- Municipal and Historical Architecture: This type of architecture firm works on local government buildings or focuses on restoring old buildings.
In the section of your business plan called “Company Analysis,” you need to say what kind of architecture firm you will run and give some background on the business.
Include answers to questions such as:
- When and why did you start this business?
- What milestones have you reached so far? Milestones could be things like the number of buildings designed, the number of positive reviews, the number of projects finished, etc.
- Your legal structure. Are you organized as an S-Corp? An LLC? A sole owner? Explain your legal structure here.
Industry Analysis
In your industry analysis, you need to give an overview of the architecture business.
Even though this may seem pointless, it has more than one use.
First, learning about the architecture business gives you knowledge. It gives you a better idea of the market you are in.
Second, market research can help you make your strategy better, especially if it shows you market trends.
The third reason to do market research is to show your readers that you know a lot about your field. You do just that by doing the research and putting it in your plan.
In the industry analysis section of your architecture business plan, you should answer the following questions:
- How much money does the architecture industry make?
- Is the market going down or up?
- Who are your main rivals in the market?
- Who are the main market suppliers?
- What changes are happening in the field?
- How fast is the industry expected to grow in the next 5–10 years?
- How big is the market that matters? That is, how big is your architecture firm’s potential market? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the population in your area.
Customer Analysis
In the section of your architecture business plan called “Customer Analysis,” you must describe the customers you serve or hope to serve.
Homeowners, governments, businesses, contractors, developers, etc. are all examples of customer segments.
As you might guess, the type of architecture firm you run will depend a lot on the customer segment(s) you choose. Obviously, a homeowner would react differently to marketing campaigns than, say, a local government.
Try to figure out who your ideal customers are based on how they look and how they think. In terms of demographics, talk about the ages, genders, locations, and income levels of the people you want to serve. Most architecture firms mostly work with people in their own city or town, so it’s easy to find demographic information on government websites.
Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to get customers and keep them coming back.
Competitive Analysis
In your competitive analysis, you should list your business’s direct and indirect competitors and then focus on the direct ones.
Other architecture firms are their main competitors.
Indirect competitors are other places where customers can buy things that aren’t direct competitors. This includes interior designers, home builders, and people in charge of construction. You should also talk about this competition.
In terms of direct competition, you need to describe the other architecture firms with which you compete. Most likely, the architects closest to you will be your direct competitors.
Give an overview of each of these competitors’ businesses and list their strengths and weaknesses. Unless you’ve worked at one of your competitors’ companies, you won’t know everything about them. But you should be able to find out key facts about them, such as:
- What kind of clients do they work with?
- What kinds of buildings do they focus on?
- How much do they charge (high, low, etc.)?
- What can they do well?
- What do they do wrong?
For the last two questions, try to answer them from the customers’ point of view. And don’t be afraid to ask the customers of your competitors what they like and dislike about them.
The last part of your competitive analysis section is to list the ways you are better than your competitors. As an example:
- Will you offer more choices when it comes to architecture?
- Will you give customers special deals or perks?
- Will you treat your customers better?
- Will you price things better?
Think about how you will do better than your competitors and write them down in this part of your plan.
Marketing Plan
Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. Your marketing plan for an architecture business plan should include the following:
Product: In the product section, you should repeat the type of architecture company that you wrote about in the Company Analysis section. Then, give specifics about the products you’ll be selling. For example, do you offer services like interior design consultations or landscape planning in addition to architecture?
Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In your marketing plan, the product and price sections are basically where you list the services you offer and how much they cost.
Place: This is where your architecture business is located. Write down where you are and how that will affect your success. For example, is your architecture firm in a busy business area, a fancy office building, etc.? Talk about why your location could be the best for your customers.
The last part of your marketing plan for your architecture business is the section on promotions. Here, you’ll write down how you’ll get people to your location (s). Here are some ways you could promote your business:
- Putting ads in newspapers and magazines in your area
- Contacting local websites
- Flyers
- Social media marketing
- Local radio advertising
Operations Plan
In the other parts of your business plan, you talked about your goals. In your operations plan, you talk about how you will reach those goals. Your plan for operations should have two separate parts.
Everyday short-term processes include all of the tasks that go into running your architecture firm, such as marketing your business, working on current projects, preparing for upcoming projects, and overseeing the whole project.
Long-term goals are the goals you want to reach in the future. These could be dates like when you want to design your 100th building or when you want to make $X. It could also be when you want to expand your architecture firm to a new city.
Management Team
A strong management team is essential to show that your architecture firm can be successful. Showcase the backgrounds of your key players, focusing on the skills and experiences that prove they can help a company grow.
You and/or the people on your team should have direct experience in architecture. If so, talk about your experience and skills. But also highlight any experience you think will help your business succeed.
If your team is missing something, you might want to put together an advisory board. A two-to-eight-person advisory board would help your business in the same way that a mentor would. They would help answer questions and give advice on how to plan. If you need to, look for advisory board members who have managed construction projects or had their own architecture or engineering businesses that were successful.
Financial Plan
Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.
A more common name for an income statement is a Profit and Loss statement, or P&L. It shows your income and then takes away your expenses to show if you made a profit.
You need to make assumptions in order to make your income statement. For instance, will you work on one project at a time, or will you be in charge of more than one at once? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.
Balance sheets show both your assets and your debts. Balance sheets can have a lot of information, but try to boil them down to the most important parts. For example, if you spend $50,000 to build up your architecture business, you won’t make money right away. Instead, it is an asset that you can use to make money for years to come. Likewise, if a bank gives you a check for $50,000, you don’t have to pay it back right away. Instead, you will have to pay that back over time.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realize that you can make money but still go bankrupt if you run out of money.
When making your Income Statement and Balance Sheet, be sure to include some of the most important costs of starting or growing an architecture firm:
- Location build-out, which includes construction, design fees, etc.
- Cost of supplies and equipment
- Payroll or wages given to employees Business insurance
- Taxes and licenses:
- Legal expenses
